Body Central shares crash 40%

Wednesday, 20 June 2012

Body Central Corp saw its shares crashing nearly 40% on Tuesday after the company cut its second-quarter outlook due to a heavy discounting to clear out piled-up inventory. The apparel retailer has reduced its second-quarter earnings forecast to 19 to 21 cents per share from 26 to 28 cents per share.

"Our second-quarter comparable sales remain soft and have not improved since April. We continue to diligently manage inventory and to take aggressive markdowns on slow moving items," CEO Allen Weinstein said in a statement on Monday. The company now expects second-quarter net revenue of $77 million (Rs 430 crores) to $79 million (Rs 441 crores). It previously expected $80 million (Rs 446 crores) to $82 million (Rs 458 crores). Body Central expects same-store sales, or those at stores open at least a year, to fall 7 to 9 per cent.

Hours later shares plunged to $9.68 (Rs 540), their lowest ever level, in early trading on Monday on the Nasdaq, not making any better on Tuesday’s session.

Big news on Tuesday was Zumiez Inc that gained 4.55% after releasing the agreement to acquire Blue Tomato, an Austrian action-sports retailer. The deal has been potentially valued at EUR81.6 million ($103 million/Rs 575 crores).

Meanwhile, Europeans stocks fell, snapping a three-day rally, as investors awaited the outcome of the Federal Reserve’s monetary-policy meeting. U.S. futures were little changed, while Asian shares climbed, reported ‘Newsweek’.

The Stoxx Europe 600 Index (SXXP) lost 0.3 per cent to 247.66 in London, after rallying 1.6 per cent the previous day to the highest since May 11. The MSCI Asia Pacific Index rallied 1 per cent as Japanese trade data signalled stronger demand in the region.

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