Charming Shoppes swings to 2Q profit

BENSALEM, Pa. - August 26, 2009 The Bensalem, Pa.-based retailer earned a profit of $5 million, or 4 cents per share, in the three months ended Aug. 1. A year earlier, the company posted a loss of $10.7 million, or 9 cents per share.

The most recent quarterly results included restructuring charges and a gain on the repurchase of debt. Excluding one-time charges, analysts polled by Thomson Reuters had expected 3 cents per share profit.

Revenue fell 19 percent to $527.2 million from $648.6 million. Analysts had expected $555 million.

While the retailer noted some improvement in sales at its Lane Bryant and Catherines brands, it said Fashion Bug continued to struggle, "with spring and summer assortments that were not compelling to our consumer."

Jim Fogarty, an executive with experience successfully turning around troubled brands, took over as Charming Shoppes CEO in April. Fogarty said in a statement on Wednesday that the company remains focused on improving its merchandise assortment.

During the quarter, the company reached an agreement to sell its credit card receivables program to Alliance Data Systems Corp., in a deal that includes a $110 million cash payment at closing. Charming Shoppes said it expects the deal to close by the end of the year. It also refinanced a $225 million revolving loan.

Charming Shoppes shares rose 9 cents to $5.52 in morning trading.

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