Bebe comparable sales increase over last year, updates FY2017 outlook

By

Obi Anyanwu

Published
Nov 3, 2016

Bebe on Thursday released its first quarter 2017 results. The company reported a 9.4% decrease in net sales and a 3.2% decrease in comparable sales compared to a decrease of 4.1% in the first quarter of 2016.

 
Chief Executive Officer Manny Mashouf said that the brand’s denim and leggings business remains strong and offsets the weak non-apparel and evening dresses. He added, “We are working to take advantage of the casual trend taking place and believe we can continue to grow our bottoms business while working to improve our tops business as this is where we believe the fashion direction is taking us. While it is important to consistently get the fashion right we are also finding it a challenge to offset the extremely high levels of markdowns and promotions realized in the prior year. We are committed to protecting the brand image, reducing markdowns and improving inventory turns and believe both our short-term and long-term success depend on our ability to execute our strategic plan.”
 
Gross margin increased to 31.5% from 28.9% primarily due to a reduction of markdowns and promotions, and SG&A expenses were $35.7 million, or 40.9% of net sales, compared to $44.9 million, or 46.6% of net sales, in the previous first quarter.

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In addition, net loss for the quarter was $7.8 million, or $0.10 per diluted share, compared to a loss of $17.1 million, or $0.22 per diluted share, in the prior year comparable period.
 
Bebe plans to close 28 Bebe and outlet stores in fiscal 2017, which will decrease its total square footage by 16% from the end of fiscal 2016. The company also expects comparable store sales to be in the low to mid-single digit negative range.