Aug 19, 2011
New York & Co dives on weak outlook
Aug 19, 2011
August 19 - New York and Co Inc's second-quarter sales missed analysts' estimates as it had less discounted merchandise to sell, and the women's apparel retailer forecast a weak third quarter, sending its shares down as much as 23 percent.
New York & Company
The New York-based company, which operates 543 stores in 43 states, said it expects comparable store sales for the third quarter to fall this year -- a swing from the 3.6 percent gain it saw last year.
Gross margins too are expected to be weak -- between 24 to 25 percent -- as high product costs and discounts hurt.
For the third quarter last year, gross margins were 27.89 percent.
"The guidance outlook for the third quarter was weaker than anticipated, the gross margin and comparable store sales were below expectations," Avondale Partners analyst Mark Montagna told Reuters.
The company reported second-quarter sales of $228.6 million, missing analysts' estimates of $236.8 million, according to Thomson Reuters I/B/E/S.
Excluding items, the loss was 15 cents a share, in line with estimates.
Comparable sales in the quarter dropped 3.4 percent.
"Weakness in our casual assortment, combined with significantly less clearance merchandise than last year, led to a comparable store sales decline," Chief Executive Gregory Scott said.
Shares of the company fell to a nine-month low of $3.26 in early trade on the New York Stock Exchange.
(Reporting by Chris Jonathan Peters in Bangalore; Editing by Maju Samuel)
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