Bombay expects steeper loss
April 23, 2004-- Home Textiles Today,
FORT WORTH, Texas — The Bombay Company updated its first quarter earning guidance late yesterday, saying that it may post a greater loss than it had originally expected.
The company now expects a loss in the range of 13 cents to 16 cents per share. Previously, it had anticipated a loss at the high end of the range of 8 cents to 11 cents per share.
"As a result of the softness in sales, gross margins have been adversely impacted by costs associated with carrying higher inventory levels from last fall. Negative same store sales and the reduction of shipments to stores have created deleveraging effects in merchandise handling and freight costs, buying and occupancy costs and corporate and four-wall selling, general and administrative expenses," said James Carreker, chairman and CEO.
In a sign that headquarters reductions may be coming, he added that Bombay will recognize "unplanned senior officer severance expense" during the first quarter.
Bombay is now forecasting second quarter comps to be negative in the high single digit level vs. the prior projection of negative mid-single digit levels. Last year, same store sales were up 26 percent in second quarter vs. 25 percent for the first quarter.
Although the 465-unit company expects improvement following the first quarter, it also lowered its annual earnings per share guidance to a range of 30 cents to 35cents per share. It had previously expected earnings of 36 cents to 42 cents per share.