Terrible Tweens: Fool by Numbers

On Aug. 22, Tween Brands (NYSE: TWB  ) released second-quarter earnings for the period ended Aug. 4.

  • Overall mall and off-mall traffic in the retail industry respectively declined by 6% and 5% during the quarter. Still, Tween Brands managed to post a 15% increase in sales, if only because of new stores. Same-store sales decreased 2%.
  • Margins fell because of higher buying and occupancy costs and rising marketing expenses. The increased expenditures trickled to the bottom line, causing earnings to miss expectations, plummeting 64.4%.
  • Management announced an earlier seasonal markdown this year, in order to help control the rising inventory accumulating on the balance sheet.
  • Tween Brands is a three-star stock (out of a possible five) in Motley Fool CAPS. Think that should still be the case, given this news and a 28.5% decrease in its stock price? Get over to the CAPS community and have your say on this and other tween competitors like American Eagle (NYSE: AEO  ) and Abercrombie & Fitch (NYSE: ANF  ) .

(Figures in millions, except per-share data.)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$213.7

$185.8

15.0%

Net Profit

$2.1

$5.9

(64.4%)

EPS

$0.07

$0.18

(61.1%)

Diluted Shares

31.4

33.4

(6.2%)

Get back to basics with the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

32.1%

33.8%

(1.8)

Operating Margin

1.0%

3.9%

(2.9)

Net Margin

1.0%

3.2%

(2.2)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$60.6

$113.5

(46.6%)

Accounts Rec.

$20.9

$11.2

87.0%

Inventory

$117.5

$97.7

20.3%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$60.5

$32.8

84.2%

The balance sheet reflects the company's health.

Cash Flow Highlights
Management was too busy studying back-to-school trends to hand out a cash flow statement this quarter.

Free cash flow is a Fool's best friend.

Related Foolishness:

American Eagle is a Motley Fool Stock Advisor recommendation.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Mike Cianciolo held no position in Tween Brands. The Fool's disclosure policy is the coolest kid in school.


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