Published
Sep 5, 2016
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Bebe improves comparable sales in fiscal 2016, releases 2017 guidance

Published
Sep 5, 2016

Bebe Stores, Inc. announced on Thursday its fourth quarter and fiscal year 2016 results.



 
In the fourth quarter, Bebe formed a joint venture partnership with Bluestar Alliance and licensed 8 product categories with Gbg Usa, Inc., Mamiye Brothers, Inc., PPI Apparel Group, Inc., Accutime Watch Corp, Gbg Sock LLC, American Traveler, Inc., Haskel Jewels LLC, and Miworld Accessories. The new licenses increased Bluestar’s total number of licenses to 14.
 
Net sales decreased 9% in the fourth quarter to $94.9 million from $104.3 million and comparable store sales decreased 4.6% compared to an increase of 1.1% in the prior year comparable period. According to Bebe CEO Manny Mashouf, the company’s comparable sales improved each month from negative 10% in April to a positive 1.3% in June.

Gross margin as a percentage of net sales decreased to 30.9% compared to 34.8% in the prior year, and SG&A expenses were $36.3 million, or 38.2% of net sales, compared to $41.3 million, or 39.6% of net sales, in the fourth quarter of 2015. The gross margin was impacted by aggressive promotions at the end of June that, according to Mashouf, “assured of a clean conversion into the new fiscal year.” 
 
Full year net sales decreased 8.0% to $393.6 million from $428.0 million, and comparable store sales decreased 4.5% compared to an increase of 3.1% in the prior year. Loss from continuing operations was $27.5 million, or $0.34 per share, compared to a loss of $25.4 million, or $0.32 per share, in fiscal year 2015.
 
Mashouf added, “As we began fiscal 2017, our inventory on a per square foot basis is flat compared to our guidance of positive 14%. The significant reduction from 220 days to 105 days in our design to market process has allowed us to improve our product offering and return to our historical model of test and chase. These changes combined with the $25 million annual reduction in SG&A give me confidence as we enter the new fiscal year.”
 
Bebe also reported its fiscal 2017 guidance. The company expects its comparable store sales to be in the negative low-single digit to positive low-single digit range, and its gross margin to be higher than the prior year. Bebe does not plan to open any new stores and plans to close 40 Bebe and outlet stores. 

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