Net Income Drops for Retailer Bebe Stores

Investors shaved almost 5% from the shares of Bebe Stores Inc., a California retailer that caters to young women, after the company said earnings plunged 21.5% and offered sales projections that caused at least one analyst to lower his earnings expectations for the year.

Brisbane, Calif.-based Bebe said earnings fell to $5.1 million, or 20 cents a share, in its fiscal first quarter ended Sept. 30. That compares with $6.5 million, or 25 cents a share, in the same period last year. Analysts were expecting earnings of 22 cents a share.

Sales rose 3% to $73.8 million, from $73.6 million the year before. Same-store sales, a key industry indicator, dropped $10.3%.

The company blamed the lower-than-expected sales on lower prices. Bebe’s shares fell 61 cents to $13.25 on Nasdaq.