Clothestime Posts 50% Jump in 2nd-Quarter Earnings

Clothestime Inc., a retailer of discounted women’s apparel, continued its steady profits climb Wednesday by posting a 50% increase in earnings for its fiscal second quarter.

The Anaheim-based retail chain of 446 stores said profits were $3.3 million, or 22 cents a share, for the quarter ended July 25, compared with $2.2 million, or 15 cents a share, for last year’s second quarter.

Revenue for the quarter rose 22% to $83.9 million this year from $69 million last year. Same-store sales, a way of measuring sales changes without taking new stores into account, rose 8% for the three-month period. The company has increased its same-store sales for 21 months in a row.

“The recession is playing into our hands,” said David Sejpal, Clothestime’s chief financial officer. “Sales are good. We still have great momentum. Customers are looking for bargains.”

The earnings come as the company is expanding rapidly, opening 65 new stores this year with plans for 74 next year. Chairman John Ortega II said the goal is to reach 1,000 stores by the turn of the century.

“With $30 million available in cash and no long-term debt, Clothestime is well-positioned to pursue its expansion strategy,” Ortega said.

Sejpal said the company is limiting its television advertising mostly to cable stations like MTV and VH1 that reach younger women. He predicted the company’s strong sales growth will increase even when the recession ends because “the ‘90s will be a period of conservative spending. People will continue their conservative buying habits.”

For the first six months of its fiscal year, ended July 25, Clothestime reported net income of $4.3 million, or 29 cents a share, a 54% increase over $2.8 million, or 19 cents a share, in earnings for the same period last year. Sales rose 21% to $152.2 million during the period from $125.8 million in last year’s first half.