Charming Shoppes lowers outlook

BENSALEM, Pa. Charming Shoppes today announced that it has revised its net sales projections for the second quarter ended Aug. 4 to approximately $765 million, compared to net sales of $763.4 million for the period ended July 29, 2006. Previously, the company had revised its projections for second quarter net sales to a range of $785 to $795 million. The company's current projections for second quarter net sales include a 3% decrease in consolidated comparable-store sales for the company's retail stores segment, compared to a 2% increase in consolidated comparable-store sales in the corresponding period of the prior year.

According to the company, throughout the quarter, Charming Shoppes has experienced downward trending store traffic levels at each of its brands, with accelerating weakness in July, and as a result, the company experienced a lower sell-through of spring and summer merchandise. In response, the company has been more aggressive in clearing seasonal inventory, leading to deeper than planned markdowns and pressure on merchandise margins.

Dorrit Bern, chairman, ceo and president of Charming Shoppes, Inc. commented, "In response to lower than planned performance during our second quarter, we are reducing expenses and managing to lower inventory levels for the second half of the year. Additionally, we have reassessed our capital spending plans, and have decreased our capital budget by approximately $12 - $15 million through the reduction of certain store development and infrastructure projects during the remainder of the year."

For the second quarter ended Aug. 4, the company has revised its projections for diluted earnings per share to a range of 12 cents to 13 cents, compared to diluted earnings per share of 24 cents for the corresponding period ended July 29, 2006. Previously, the company had revised its projections for diluted earnings per share for the second quarter to a range of 18 cents to 20 cents.

For the fiscal year ending Feb. 2, 2008, the company has revised its projections for diluted earnings per share to a range of 65 cents 68 cents, compared to diluted earnings per share of 81 cents for the corresponding period ended Feb. 3. Previously, the company had revised projections for diluted earnings per share for the fiscal year ending Feb. 2, 2008 to a range of 80 cents to 82 cents.

Previously, the company had revised its projections for net sales to a range of $3.15 to $3.20 billion. The company's current projection assumes low single-digit percentage decreases in consolidated comparable-store sales for the company's retail stores segment, compared to a 1% consolidated comparable-store sales increase in the prior year.