J. Crew Group Inc. said Thursday that weaker-than-anticipated sales will lead the apparel retailer to report a fourth-quarter loss.
The company now expects a quarterly loss of 24 cents to 29 cents per share. Previously, the company had anticipated a profit of 5 cents to 10 cents per share. This compares with earnings of 39 cents per share in the 2007 quarter.
Analysts surveyed by Thomson Reuters, on average, are expecting J. Crew to report earnings of 7 cents per share.
The revised outlook reflects same-store sales in the negative mid teens, and direct sales in the negative mid-to-high single digit range, the company said. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.
J. Crew also cut its full-year outlook for the second time in three months. The company expects earnings-per-share in a range of 77 cents to 82 cents, down from a prior estimate of $1.11 to $1.16 per share. Analysts forecast fiscal 2008 earnings of $1.13 per share. J. Crew earned $1.52 per share in fiscal 2007.
J. Crew said its revised expectations reflect aggressive inventory actions taken to clear fall and holiday inventory during the fourth quarter.
The announcement comes as a bevy of retailers report dismal sales for the month of December — confirming fears that the recent holiday season was the weakest in decades.
Apparel retailers have been hit particularly hard in recent months as consumers scale back their spending in the face of a worsening recession.
J. Crew operates 227 retail stores and 74 factory outlet stores.
