The after-tax impact of derivative versus hedge accounting treatment was a $0.6 million loss, or $0.01 per diluted share and the negative impact on revenue recognized from the sale of jewelry protection plans was $16.0 million or $0.33 per diluted share.
Excluding these items, year-to-date net earnings were $75.3 million, or $1.54 per diluted share. For the same period last year, earnings were $81.0 million, or $1.63 per diluted share. These prior year earnings include, on an after-tax basis, (1) costs related to the closing of Bailey Banks & Biddle stores of $21.4 million, or $0.43 per diluted share, and (2) severance payments of $7.6 million, or $0.16 per diluted share; this was partially offset by (3) a tax benefit from repatriated Canadian earnings under the American Jobs Creation Act of $11.5 million, or $0.23 per diluted share and (4) an $8.4 million, or $0.17 per diluted share, benefit resulting from the settlement of certain retirement benefit obligations. Excluding these items, the Company reported year-to-date earnings of $90.1 million last year, or $1.82 per diluted share.
“While comp store sales decreased 3.4%, a focus on maximizing gross margin dollars and good expense control contributed to earnings in-line with expectations for the quarter,” commented Betsy Burton, Chief Executive Officer.
Ms. Burton continued, “We believe retail in general is showing signs of weakness, and higher gas prices have directly impacted the discretionary income of the moderate customer. Given these overall macro trends, we are lowering our sales projections and, while cautious, we are maintaining our current earnings guidance for fourth quarter.”
The Company projects a fourth quarter comparable store sales decrease of 2% to 3% and GAAP earnings per share in the range of ($0.11) to ($0.15). The guidance includes an estimated ($0.12) impact due to the decline in revenue recognized from the change to its jewelry protection plan offering and approximately $0.02 for the net impact of derivative versus hedge accounting. Excluding these items, the Company continues to expect earnings per share in the range of ($0.01) to ($0.05) per share.
marketing@alchempro.com
