Claire's Reports Marginal Growth in Q3

The company’s consolidated same store sales, adjusted EBITDA and gross profit percentage also posted gains during the quarter.

NORTH AMERICA–Specialty retailer Claire’s has released its third quarter financial results, reporting a $2.5 million increase in net sales to $314.6 million compared to the same period last year.

The company also reported that sales would have decreased 1.1 percent excluding the favorable impact from foreign currency exchange rates. Excluding the exchange rate effect, the decrease was primarily due to store closures and was partially offset by an increase in same store sales as well as an increase in new concession and company-operated store sales.

Consolidated same store sales also increased 1.1 percent, with North America sales increasing 2.4 percent and European sales decreasing 1 percent. For the fiscal 2017 fourth quarter-to-date period, consolidated same store sales remained flat, with North America performing similarly to Europe.

Furthermore, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $42.4 million, an increase of 14.8 percent compared to the same period last year. Excluding the foreign currency translation effect, adjusted EBITDA would have been $41.7 million.

Selling, general and administrative expenses also posted an increase of $2.4 million, or 2.1 percent, compared to Q3 2016. Excluding an unfavorable $2.3 million foreign currency translation effect, selling, general and administrative expenses would have increased $0.1 million.

Finally, gross profit percentage increased 200 basis points to 48.5 percent during the fiscal 2017 third quarter, compared to 46.5 percent in the prior year. This increase consisted of a 120 basis point increase in merchandise margin and a 90 basis point decrease in occupancy. According to Claire’s, the increase in merchandise margin percentage resulted from a higher initial markup and lower markdowns. The decrease in occupancy costs, as a percentage of net sales, was primarily due to the leveraging effect of an increase in same store sales.

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