Casual Male Retail Group Inc., which sells men's clothing under the brand names Casual Male XL and Rochester Big & Tall, said Tuesday it posted a smaller third-quarter loss by trimming expenses and improving merchandise margins to offset weak sales.
For the quarter ended Oct. 31, Casual Male lost $1.4 million, or 3 cents per share, compared with a loss of $3.2 million, or 8 cents per share, last year.
Sales dropped 11 percent to $88.7 million from $100 million. Sales at stores open at least a year fell 11.3 percent, as retail and direct channels both posted declines.
For fiscal 2009, the company expects revenue will be between 11 percent and 12 percent less than last year, compared with the 10 to 12 percent drop it previously forecast. A year ago, the company posted $445.4 million in sales, which implies 2009 sales of $392 million to $396.4 million.
Casual Male said free cash flow for fiscal 2009 will range between $15 million and $20 million, compared with a prior range of $20 million to $25 million.
Shares declined 15 cents, or 5 percent, to close at $2.64. Stifel Nicolaus analyst Richard Jaffe said earnings missed his expectations due to a larger than anticipated drop in sales at stores open at least a year.
He said that the company is doing everything it can to manage weak customer traffic, but Jaffe said men just did not return to shopping at the rate he had expected during the quarter.
"We have not seen evidence of the male consumer returning to the market and this may be due to the absence of winter weather, a cautious male shopper, or a focus by the consumer on kids and gifts," Jaffe wrote in a note to clients. "The company believes it is not losing share to competitors, just that its customers have refrained from spending temporarily but when they do shop, they will return to Casual Male."