(Recasts throughout, adds analyst’s comments, dateline, updates share movement)
By Dhanya Skariachan
BANGALORE, March 26 (Reuters) - Women’s retailer Charlotte Russe Holding CHIC.O forecast a third-quarter profit below Wall Street expectations, citing a shift in the Easter holiday and spring break periods, sending its shares down as much as 17 percent.
The company, which sells apparel and accessories targeting young women in their teens and twenties under the Charlotte Russe, Refuge, and blu Chic brands, expects quarterly earnings of about 27 cents to 30 cents a share.
Analysts on average were expecting the mall-based specialty retailer to earn 41 cents a share, before special items, according to Reuters Estimates.
The company’s bleak outlook echoes the trend among U.S. apparel retailers, which have been struggling with lower sales in the past several months as rising food and fuel prices continue to deter shoppers from stocking up on discretionary items.
“While the Easter holiday shift drove a positive comp for the third week of March, we were disappointed with our sales performance for the holiday period,” Charlotte Russe CEO Mark Hoffman said in a statement.
This year, Easter Sunday fell on March 23, the earliest since 1913. Last year, it was on April 8.
An early Easter coupled with bad weather gave consumers no real incentive to buy spring apparel, Roth Capital Partners analyst Elizabeth Pierce said by phone from California.
Charlotte Russe, based in San Diego, expects comparable-store sales to remain flat or fall by a low single digit in the quarter.
Pierce termed the company’s comparable store sales outlook as “prudent” in the current retail environment.
Charlotte Russe’s stock now trades at about 11 times forward earnings, lagging the sector which is at a multiple of about 19.
Pierce, who has a “buy” rating and a price target of $23 on the stock, said the retailer’s shares are still priced attractively.
Charlotte Russe, which competes with fashion retailers such as Abercrombie & Fitch Co (ANF.N) and Hot Topic Inc HOTT.O, also said it will record a favorable tax adjustment of 3 cents a share in the latest second quarter.
The company backed its second-quarter earnings forecast of 12 cents to 15 cents a share, excluding the tax benefit.
Shares of the company fell to $16.56 before recovering some losses to trade at $17.53, making them one of the highest percentage losers on Nasdaq.
About 2,188,739 Charlotte Russe shares changed hands in intraday trading Wednesday, more than triple the 50-day moving average volume of the stock. (Editing by Amitha Rajan)