The weak sales and same-store sales trend continues for
Bebe Stores Inc.
), as the company posted weaker-than-expected retail sales
results for the second quarter of fiscal 2013 ended December 29,
2012. The company will announce further details with the
second-quarter earnings release on January 31.
Total retail sales of $124.6 million for the quarter declined
11.7% from $141.1 million in the prior-year quarter. Comps
declined 10.5% for the quarter compared with an increase of 9.6%
in the year-ago period. Last quarter, the company's total retail
sales were down 9.4%, while comps declined 8.7%.
Year-to-date, Bebe's total retail sales dipped 10.7% to $229.7
million from $257.1 million reported in the prior-year period.
Moreover, during the period, the company registered a 9.7%
decline in its comps compared with a rise of 8.4% achieved in the
The decline in retail sales and comps were primarily due to 15%
decline in traffic at the company's stores, especially in
December. Additionally, the shift of the New Year's Eve into
fiscal January coupled with the impact of Hurricane Sandy weighed
on the company's same-store sales, inducing a 2% contraction.
As of December 29, 2012, the company registered 27.5% growth in
average inventory per square foot. The increase was mainly due to
the shift of New Year's Eve into the next fiscal quarter, rise in
average unit costs for important products, supplementary spring
returns and other localization plans.
Based on the preliminary sales results, the company now expects
net loss for the quarter to be at or below the lower end of its
former guidance of 1 cent per share, which excludes one-time
expenses related to store impairment and write-off, recruiting
expenses and probable settlement costs.
Bebe competes with other upper segment apparel retailers, such as
). Currently, the company has a Zacks #3 Rank that translates to
a short-term 'Hold' rating.
We are maintaining a long-term 'Neutral' recommendation on the
stock as we believe that the company's sustained focus on the
development of a multi-channel retail format through the
enhancement of its e-commerce capabilities, along with expanding
international business, will certainly help it fight waning
Bebe Stores design, develop and produce a distinctive line of
contemporary women's apparel and accessories. They market their
products under the bebe, bebe moda and bbsp brand names through
their retail stores located in Canada and the United Kingdom.
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