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Tween Brands Reports Third Quarter Sales and Earnings

NEW ALBANY, Ohio--(BUSINESS WIRE)--Nov. 19, 2007--Tween Brands, Inc. (NYSE: TWB), today reported its operating results for the third quarter that began August 5, 2007 and ended November 3, 2007. As compared to the results for the third quarter 2006 that began July 30, 2006 and ended October 28, 2006:

    --  Net sales increased 13% to $260.9 million from $230.5 million,
        attributable to an increase of 123 stores and a 4% comparable
        store sales increase;

    --  Comparable store sales increased 4%, composed of a 17%
        increase for Justice and a 1% increase for Limited Too.
        Comparable store sales for the quarter were driven by a strong
        August in both brands, primarily attributable to the shift in
        back to school dates, followed by negative comparable store
        sales at Limited Too in September and October;

    --  As expected, gross income as a rate of sales declined 410
        basis points primarily due to Limited Too's recognition of a
        higher proportion of planned seasonal markdowns and higher
        buying and occupancy costs;

    --  Store operating, general and administrative expenses as a rate
        of sales increased 60 basis points principally related to
        Limited Too's higher store and direct-to-customer expenses;

    --  Net income for the 2007 quarter was $13.0 million, or $0.46
        per diluted share, within the range of the company's previous
        guidance. Tween Brands reported net income of $19.0 million,
        or $0.58 per diluted share for the 2006 period; and

    --  Total inventories at the end of the 2007 quarter were down 3%
        per square foot at cost compared to inventories at the end of
        the 2006 period, while in-store inventories were down 8% per
        square foot at cost, favorable to the company's previous
        guidance. The difference is attributable to increases in
        non-store inventories primarily from directly sourced
        inventory in-transit and Limited Too e-commerce inventory.

    Share Repurchase

During the third quarter, Tween Brands repurchased $175 million of its common shares. Of this amount, approximately $143.3 million was reacquired under a previously disclosed accelerated share repurchase program. An additional $31.7 million was reacquired under the same authorization approved by the Board of Directors in September 2007. The company still has $148.3 million remaining under a separate authorization approved by the Board in May 2007.

Since the original share repurchase was authorized by the Board of Directors in November 2004, the company has reacquired more than $355 million of its common shares.

Fourth Quarter Outlook

Tween Brands said that it now expects earnings per diluted share for the fourth quarter ending February 2, 2008 to be in the range of $0.98 to $1.08, 4% to 5% below its previous guidance of $1.03 to $1.13. The company reported fourth quarter 2006 earnings per share of $0.86 per diluted share.

The company said that its more conservative outlook for the fourth quarter reflects its latest expectations for a slower holiday season than had been previously anticipated. The company added that its range of earnings projected for the fourth quarter assumes a low single digit percentage increase in comparable store sales, a lower gross income rate, higher store operating, general and administrative expenses as a rate of sales and a higher effective income tax rate compared to fourth quarter 2006.

"While our early November sales are encouraging, we believe it is prudent to moderate our earnings expectations for the holiday season based on what appears to be a challenging retail environment," said Tween Brands CEO Mike Rayden. "The competition for customer attention is already resulting in an increased level of promotion, exerting more pressure on operating margins."

Tween Brands Store Growth

Justice opened 33 stores during the third quarter 2007, ending the period at 246 stores, an increase of 105 stores on the 141 open at end of third quarter 2006. Justice expects to open 15 stores during the fourth quarter, for a total of 102 new openings during 2007.

Limited Too opened 18 new, closed 3 and remodeled 6 existing stores, ending the period at 588 stores.

Conference Call and Webcast

Tween Brands will host a conference call with security analysts beginning at 9:00 a.m. Eastern time today, November 19, 2007, to review the operating results for the third quarter ended November 3, 2007. Interested participants can call 888/224-1005 a few minutes before the 9:00 a.m. start in order to be placed in queue. The conference call passcode is 7470143. This call is also being webcast by Thomson and is being distributed over their investor distribution network. Individual investors can listen to the webcast at www.earnings.com. Institutional investors can access the webcast at www.streetevents.com. The webcast will also be available at Tween Brands' corporate Web site, www.tweenbrands.com.

About Tween Brands, Inc.

Tween Brands, Inc. is a leading specialty retailer for tweens (ages 7 to 14). At Limited Too, the company sells sportswear, related accessories and key lifestyle items for active, fashion-aware tween girls. Limited Too currently operates 593 stores across the United States, and has 25 international franchised stores. Limited Too publishes a catazine coinciding with key tween shopping times throughout the year and conducts e-commerce on its Web site, www.limitedtoo.com.

Justice is the company's newer specialty retail concept for tween girls, offering moderately-priced sportswear, accessories and lifestyle items in predominantly off-the-mall store sites. Justice also publishes a catazine for its tween customers and currently operates 254 stores across the United States, the locations of which can be found on their Web site, www.justicejustforgirls.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains various "forward-looking statements" specifically related to the company's financial performance and store growth for fiscal 2007, within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Such statements can be identified by the use of the forward-looking words "anticipate," "estimate," "project," "target," "predict," "believe," "intend," "plan," "expect," "hope," "risk," "could," "pro forma," "potential," "prospects, " "outlook," or similar words. These statements discuss future expectations, contain projections regarding future developments, operations or financial conditions, or state other forward-looking information. These forward-looking statements involve various important risks, uncertainties and other factors that could cause our actual results for 2007 to differ materially from those expressed. The following factors, among others, could affect our future financial performance and cause actual future results to differ materially from those expressed or implied in any forward-looking statements included in this press release: changes in consumer spending patterns, consumer preferences and overall economic conditions; decline in the demand for our merchandise; the impact of competition and pricing; the effectiveness of our brand awareness and marketing programs; a significant change in the regulatory environment applicable to our business; risks associated with our sourcing and logistics functions; the impact of modifying and implementing new information technology systems; changes in existing or potential trade restrictions, duties, tariffs or quotas; currency and exchange risks; availability of suitable store locations at appropriate terms; ability to develop new merchandise; ability to hire and train associates; the potential impact of health concerns relating to severe infectious diseases, particularly on manufacturing operations of our vendors in Asia and elsewhere; acts of terrorism in the U.S. or worldwide; and other risks that may be described in other reports and filings we make with the Securities and Exchange Commission. Future economic and industry trends that could potentially impact revenue and profitability are difficult to predict. Therefore, there can be no assurance that the forward-looking statements included here will prove to be accurate. The inclusion of forward-looking statements should not be regarded a representation by us, or any other person, that our objectives will be achieved. The forward-looking statements made herein are based on information presently available to us, as the management of the company. We assume no obligation to publicly update or revise our forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

Company home page: www.tweenbrands.com

                          Tween Brands, Inc.
                Consolidated Statements of Operations
  For the Thirteen Weeks Ended November 3, 2007 and October 28, 2006
         (unaudited, in thousands, except per share amounts)


                             Thirteen Weeks Ended Thirteen Weeks Ended
                             -------------------- --------------------
                             November 3,   % of    October 28,   % of
                                2007      Sales       2006      Sales
                             ----------- -------- ------------- ------

Net sales                     $  260,910   100.0%      $230,481 100.0%
Cost of goods sold,
 including buying and
 occupancy costs                 166,984    64.0%       137,986  59.9%
                             ----------- -------- ------------- ------
Gross income                      93,926    36.0%        92,495  40.1%
Store operating, general and
 administrative expenses          72,699    27.9%        62,999  27.3%
                             ----------- -------- ------------- ------
Operating income                  21,227     8.1%        29,496  12.8%
Interest (expense)/income,
 net                               (803)   (0.3%)         1,085   0.5%
                             ----------- -------- ------------- ------
Earnings before income taxes      20,424     7.8%        30,581  13.3%
Provision for income taxes         7,422     2.8%        11,577   5.1%
                             ----------- -------- ------------- ------
Net Income                    $   13,002     5.0%      $ 19,004   8.2%
                             =========== ======== ============= ======


Net income per share:

    Basic                     $     0.47               $   0.59
                             ===========          =============
    Diluted                   $     0.46               $   0.58
                             ===========          =============

Weighted average common
 shares:

    Basic                         27,586                 32,188
                             ===========          =============
    Diluted                       28,249                 32,883
                             ===========          =============
                          Tween Brands, Inc.
                Consolidated Statements of Operations
For the Thirty-Nine Weeks Ended November 3, 2007 and October 28, 2006
         (unaudited, in thousands, except per share amounts)


                       Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended
                       ----------------------- -----------------------
                        November 3,     % of     October 28,     % of
                            2007       Sales         2006       Sales
                       -------------- -------- ---------------- ------
Net sales                $    697,841   100.0%    $     611,418 100.0%
Cost of goods sold,
 including buying and
 occupancy costs              450,849    64.6%          382,355  62.5%
                       -------------- -------- ---------------- ------
Gross income                  246,992    35.4%          229,063  37.5%
Store operating,
 general and
 administrative
 expenses                     205,613    29.5%          174,900  28.6%
                       -------------- -------- ---------------- ------
Operating income               41,379     5.9%           54,163   8.9%
Interest income, net              838     0.1%            3,683   0.6%
                       -------------- -------- ---------------- ------
Earnings before
 income taxes                  42,217     6.0%           57,846   9.5%
Provision for income
 taxes                         14,642     2.0%           21,241   3.5%
                       -------------- -------- ---------------- ------
Net Income               $     27,575     4.0%    $      36,605   6.0%
                       ============== ======== ================ ======


Net income per share:

    Basic                $       0.92             $        1.12
                       ==============          ================
    Diluted              $       0.91             $        1.10
                       ==============          ================

Weighted average
 common shares:

    Basic                      29,845                    32,679
                       ==============          ================
    Diluted                    30,438                    33,338
                       ==============          ================
                          Tween Brands, Inc.
                     Consolidated Balance Sheets
             As of November 3, 2007 and February 3, 2007
           (unaudited, in thousands, except share amounts)


                                            November 3,   February 3,
                                                2007         2007
                                            ------------ -------------
                  ASSETS
Current Assets:
   Cash and equivalents                      $    42,669    $   48,394
   Investments                                    11,750        99,164
   Restricted assets                               1,268         1,235
   Accounts receivable, net                       21,889        13,878
   Inventories, net                              130,237        91,742
   Store supplies                                 15,322        14,806
   Prepaid expenses and other current
    assets                                        15,562        15,236
                                            ------------ -------------
Total current assets                             238,697       284,455

Property and equipment, net                      295,337       235,516
Long-term investments                              2,465        17,054
Deferred income taxes                             10,330         8,166
Assets held in trust and other                    26,600        24,486
                                            ------------ -------------

Total assets                                 $   573,429    $  569,677
                                            ============ =============

                LIABILITIES
Current Liabilities:
   Accounts payable                          $    47,977    $   37,150
   Accrued expenses                               50,150        38,849
   Deferred revenue                               11,715        13,584
   Income taxes payable                              480        20,879
                                            ------------ -------------
Total current liabilities                        110,322       110,462
                                            ------------ -------------

Long term debt                                   175,000             -
Deferred tenant allowances from landlords         66,101        53,687
Supplemental retirement and deferred
 compensation liability                           22,895        20,362
Accrued straight-line rent and other              26,877        13,840

Commitments and contingencies

           SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 50 million
 shares authorized
Common stock, $.01 par value, 100 million
 shares authorized, 36.9 million and 36.6
 million shares issued, 24.7 million and
 32.1 million shares outstanding at
 November 3, 2007 and February 3, 2007,
 respectively                                        369           366
Treasury stock, at cost, 12.3 million and
 4.5 million shares at November 3, 2007 and
 February 3, 2007, respectively                (356,437)     (120,554)
Paid in capital                                  185,192       173,394
Retained earnings                                343,110       318,120
                                            ------------ -------------
Total shareholders' equity                       172,234       371,326
                                            ------------ -------------

Total liabilities and shareholders' equity   $   573,429    $  569,677
                                            ============ =============
                          Tween Brands, Inc.
           Other Financial and Store Operating Information
                  (unaudited, dollars in thousands)

                     Thirteen Weeks Ended    Thirty-Nine Weeks Ended
                   ------------------------ --------------------------
                   November October         November  October
                      3,       28,     %        3,       28,      %
                     2007     2006   Change   2007      2006    Change
                   -------- -------- ------ --------- --------- ------

Gross income       $93,926  $92,495      2% $246,992  $229,063      8%
Gross income as
 percentage of net
 sales                36.0%    40.1%            35.4%     37.5%
Depreciation       $10,062    7,927     27%  $27,276    23,123     18%
Amortization of
 tenant allowances $(2,449) $(2,150)         $(7,014)  $(6,154)
Capital
 expenditures      $31,360   24,779          $86,316    50,096

Number of stores:
Beginning of
 period                786      681              722       666
   Opened               51       30              119        57
   Closed               (3)       -               (7)      (12)
                   -------- --------        --------- ---------
End of period          834      711              834       711
                   ======== ========        ========= =========

Number of Limited
 Too stores            588      570              588       570
Number of Justice
 stores                246      141              246       141

Total gross square
 feet at period
 end (thousands)     3,467    2,963            3,467     2,963

Comparable store
 sales % change          4%       4%               2%        8%
   Limited Too
    stores               1%       1%              -1%        6%
   Justice stores       17%      35%              17%       33%

CONTACT: Tween Brands
Robert Atkinson, 614-775-3739
SOURCE: Tween Brands, Inc.

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