Claire's stores Q4 FY 2016 results illustrate a net loss of $20.1 million
Affordable jewelry and accessories chain Claire's Stores, Inc. announced its preliminary unaudited financial results for the fiscal 2016 fourth quarter and fiscal year ending on January 28, 2017.
Like many other struggling retailers, the results illustrate a loss with net sales reported at $382.5 million, a decrease of $20.1 million (5 percent) compared to the fiscal 2015 fourth quarter.
Looking at the year as a whole, fiscal 2016 net sales were $1.3 billion, a deficit of $91.5 million—or 6.5% compared to fiscal 2015. The decrease in sales was due to the number of directly-operated store closures
According to the company, the reasoning behind the decrease in profit was due to an amalgamation of store closures, a decline in same-store sales, a negative impact of the foreign currency exchange rate on non-U.S. net sales and decreased shipments to franchisees — issues retailers across the board are experiencing. In January, Claire's Stores aborted its plan to go public.
While Claire’s Stores may be reporting a loss, the company isn't filing for bankruptcy like Gymboree Corp. (though it's widely reported it's on the verge and has been placed on the Moody's Investors Service distressed list). Nor does it have any plans of shutting down business like Wet Seal, BCBG Max Azria, Gordmans, Rue 21, and Payless Shoe Source. In fact, on the positive side, Claire’s Stores’ gross profit percentage increased 140 basis points to 51.1% during the fiscal 2016 fourth quarter versus 49.7% for the prior year quarter.
Interestingly enough, while Claire's Stores is suffering stateside, it's thriving overseas. For the fiscal 2017 quarter-to-date period, consolidated same-store sales increased in the low single-digit range, with Europe outperforming North America. However, there are only 1,069 stores across Europe versus 1,641 in the U.S.
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