Liz Claiborne shares fall after 2Q outlook dims

Shares of Liz Claiborne Inc. tumbled nearly 26 percent Thursday after the apparel maker said it now expects to post a slightly larger than expected second-quarter loss.

Liz Claiborne shares fell $1.04, or 25.9 percent, to close at $2.98.

Last month, the company predicted that its adjusted second-quarter operating loss and would be similar to that of the first quarter. Liz Claiborne reiterated that outlook Thursday but warned that its adjusted loss per share will increase moderately from the first-quarter's 37 cents per share. Sales are expected to be flat with the $779.7 million reported in the first quarter.

Analysts surveyed by Thomson Reuters, who generally exclude one-time items, have been expecting a loss of 32 cents per share in the second quarter on sales of $729.3 million.

"Despite the fact that our second quarter of 2009 closes in several weeks, there is still some uncertainty regarding the results for the quarter," the company said in a filing. It warned investors to "take this uncertainty into account in connection with any investment in the company."

The company also said it has amended a credit agreement to allow it to issue $75 million worth of convertible senior notes due 2014, and use the proceeds to temporarily pay down a some borrowings under the credit facility. The notes will pay interest semi-annually, and will be convertible into cash, common stock, or a combination thereof at the company's option.