On Thursday, specialty retailer New York & Company
So what's the problem? Unfortunately for long-term shareholders, investors focused their attention on other financial metrics that New York & Company reported along with revised full-year guidance. But neither metrics nor guidance helped the stock as shares tumbled 15.8% on nearly five times its average trading volume.
The bad news for investors was a 45% slide in earnings per share and revised full-year guidance that now indicates an EPS range that's only about half the amount management anticipated. In its earnings call, CEO Richard Crystal noted that New York & Company was disappointed with its quarter but remained optimistic for the second half of 2007.
A decrease in gross profit as a percent of sales from 28.5% in the year-ago quarter to 26.8% this quarter dragged down EPS. Management attributes this drop to an 18% comparable store decline for the retailer's accessory line.
It has been a challenging stretch for some of the company's competitors as well. After yesterday's market close, Gap
The silver lining for investors who have hung on to shares of New York & Company is that the retailer's apparel line remains strong and did not experience the margin decline suffered by the accessory line. Management anticipates opening 26 new stores in Q3 and the launch of its City Beauty line in November. Recently it hired a new chief marketing officer who, one hopes, can give the accessory line a slight makeover.
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