The women's apparel retailer reported its Q2 same-store sales figures last week, and it was more of the kind of trouble investors have grown used to. Quarterly comps decreased by 7.9%, compared to a 5.5% increase in the same time frame last year. Total sales increased 3% to $201.9 million.
Unfortunately, bebe no longer reports its same-store sales on a monthly basis, so we can't get a good read on the retailer's holiday sales. Last quarter, there were lots of promises of a "sexy" Christmas assortment, as well as what some of us might find a dubious strategy for this retailer, namely having some "value" pricing on some merchandise. (This retailer has always been known for more upscale wares.) In addition, bebe recently disclosed in a regulatory filing that founder Manny Mashouf has returned to the company's design lab.
bebe, a Motley Fool Stock Advisor recommendation, has looked like a retail value stock for quite some time. However, for my own part, I'm beginning to wonder if the turnaround is going to take longer than many of us previously imagined. I can't help but wonder if trying to pull off a turnaround and navigate a consumer slowdown makes struggling retailers -- like Gap
For the time being, bebe still looks cheap, trading at only 13 times trailing earnings, but given continued comps weakness, I'm beginning to lose confidence in its near-term ability to lure in customers. Next quarter's tidings should be illuminating, but for now, I find myself less confident in bebe. I'd say investors definitely need more solid signs that bebe's getting its strategy back on track.
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