LNT lowers forecast, Wall Street lowers stock
By Staff -- Home Textiles Today, 10/14/2004 11:31:00 AM
CLIFTON, N.J. -- Hoisting a yellow flag and bracing Wall Street for an earnings disappointment, Linens 'n Things warned that third-quarter profits will come in beneath its previous forecast, hampered by slower traffic, lower same-store sales, weaker margins and the impact of recent hurricanes.&p>The superstore retailer said it now expects profits to come in at 37 to 38 cents a share, about 16 to 24 percent below an earlier forecast of 44 to 50 cents a share.&p>Sales during the third quarter increased 8.5 percent, to $654.2 million, the retailer said, but the crucial gauge of same-store sales declined 0.5 percent.&p>Analysts and investors responded by beating up the stock the day after the news came out, and in mid-day trading today, the retailer's stock was trading down 8.1 percent, or $1.90 a share, to $21.60 from $23.50 yesterday, in unusually heavy trading. By noon, more than 1.9 million shares had traded hands, more than three times the average daily volume of 606,318 shares.&p>Norman Axelrod, chairman and CEO, commented, "Although the third quarter began healthy, our overall performance became softer as the quarter progressed, primarily attributable to a decline in guest traffic as well as the hurricanes that negatively impacted our stores in the Southeast."
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