Knobias Clip Report (12-18-2008) CPY
Submitted By Knobias ClipReport
CPY: Shares Plunge on Q3 Results; CFO Comments on Outlook
By Fain Hughes, fhughes@knobias.com
Shares of CPI Corp. (CPY) declined during Thursday’s session after the Company reported financial results for the third quarter ended November 8, 2008.
The Company reported that net sales for the third quarter of 2008 decreased $19.6 million, or 14%, to $115.8 million from the $135.4 million reported in the third quarter of 2007. The Company also reported a net loss of $13.3 million, or ($2.06) per diluted share, for the 16-week third quarter ended November 8, 2008, compared to a net loss of $10.1 million, or ($1.57) per diluted share, reported in the comparable quarter of fiscal 2007.
Preliminary net sales and sittings for the first five weeks of the fourth quarter represent an approximate 14% and 11% decline, respectively.
Dale E. Heins, CFO of CPI Corp., commented in a conference call today, “Our Q3 sales results reflect the current difficult economic conditions which have depressed consumer discretionary spending. In response to the anticipated softness in our business, we undertook several actions throughout Q3 to further reduce costs and enhance our appeal to a more price sensitive customer. As a result of these actions, our Q3 adjusted EBITDA was only down about $2.5 million on a comparable year-over-year basis despite a double-digit decline in sales.”
He added, “Although we face significant year-over-year sales declines in Q4, our trends appear to be improving and our outlook for the balance of the busy season is very good. Our continuing cost containmant and productivity initiatives should mitigate somewhat the impact of sales declines on our bottom line.”
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