Charlotte Russe Holding, Inc. Announces Third Quarter 2008 Financial Results

SAN DIEGO, July 23 /PRNewswire-FirstCall/ -- Charlotte Russe Holding, Inc.
(Nasdaq: CHIC) today announced financial results for the third quarter of
fiscal 2008 ended June 28, 2008.
Third quarter highlights:
-- Net sales increased 7.2% to $193.2 million compared to $180.3 million
last year. Comparable store sales declined 6.5%.
-- Operating income was $10.4 million versus $15.5 million in fiscal
2007.
-- Net income was $6.6 million, or $0.31 per diluted share, compared to
$10.1 million, or $0.40 per diluted share, in the third quarter of fiscal
2007.
-- Comparable store inventories were down 10.4% at the close of the
quarter.
Nine month highlights:
-- Net sales totaled $616.5 million, an increase of 12.0% versus $550.6
million a year ago. Comparable stores sales decreased 0.8%.
-- Operating income was $37.0 million compared to $41.5 million in the
first nine months of fiscal 2007.
-- Net income was $24.8 million, or $1.04 per diluted share, versus $27.9
million, or $1.09 per diluted share, a year ago.
Commenting on the results, Len Mogil, Interim Chief Executive Officer,
stated, "Although third quarter comparable store sales results were lower than
expected, we were able to deliver earnings of $0.31 per share, at the low end
of our guidance range."
Mogil continued, "While we are enthusiastic about our new Back-to-School
assortments that arrived in stores earlier this week, we remain cautious about
consumer sentiment. We are focused on delivering trend right product,
appropriately managing inventory and tightly controlling costs. Additionally,
we are assuming a more conservative approach to square footage growth for next
year and currently expect to open 20-30 new stores in fiscal 2009. I look
forward to working with the Board and management on many initiatives to
strengthen the business and build value over the long-term."
Outlook
Based on the current operating environment and recent sales trends at
Charlotte Russe, the Company expects fourth quarter comparable store sales to
be in the range of negative low to mid-single digit. Earnings per diluted
share are expected to be between $0.15 and $0.23, excluding cash and non-cash
charges related to the departure of the Company's former CEO, as well as
transition costs. This compares to a comparable store sales decline of 5.3%
and diluted earnings per share of $0.33 in the fourth quarter of fiscal 2007.
New Store Openings
The Company opened 21 new stores during the third quarter, bringing the
year-to-date total to 39 new locations. Approximately 18 stores are expected
to open during the fourth quarter for an anticipated total of 57 new store
openings in fiscal year 2008.
Conference Call Information
A conference call to discuss third quarter results is scheduled for today,
July 23, 2008, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To access
the call, please dial (888) 841-5034 approximately ten minutes prior to the
start of the call. The conference call will also be webcast live and archived
at http://www.charlotterusse.com. A telephone replay of this call will be
available until August 6, 2008 and can be accessed by dialing (800) 642-1687
and entering code 9096624.
Charlotte Russe Holding, Inc. is a mall-based specialty retailer of
fashionable, value-priced apparel and accessories targeting young women in
their teens and twenties. As of June 28, 2008, the Company operated 469 stores
in 45 states and Puerto Rico. For more information about the Company, please
visit http://www.charlotterusse.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995: Except for the historical information contained herein, this press
release contains forward-looking statements. Such statements include, but are
not limited to, projections of our future results of operations or of our
financial condition, our anticipated management and growth strategies and new
store openings. Such forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
historical results or from any results expressed or implied by such
forward- looking statements. These risks and uncertainties include, but are
not limited to, the risks that the Company will not achieve anticipated
financial results or comparable store sales increases, the Company will not
open new Charlotte Russe stores or remodel existing stores in the numbers or
on the schedule anticipated, general and regional economic conditions,
industry trends, consumer demands and preferences, competition from other
retailers and uncertainties generally associated with women's apparel and
accessory retailing. A complete description of these factors, as well as
others that could affect the Company's business, is set forth in the Company's
annual report on Form 10-K and quarterly reports on Form 10-Q, filed with the
Securities and Exchange Commission.

CHARLOTTE RUSSE HOLDING, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in 000's, except per share data)
(unaudited)

Third Quarter Ended Nine Months Ended
June June June June
28, 30, 28, 30,
2008 2007 2008 2007

Net sales $193,233 $180,280 $616,528 $550,610
Cost of goods sold 141,599 126,864 451,310 397,176
Gross profit 51,634 53,416 165,218 153,434

Selling, general &
administrative expenses 41,273 37,871 128,253 111,895
Operating income 10,361 15,545 36,965 41,539

Interest income, net 298 1,194 2,311 3,729
Income from operations before
income taxes 10,659 16,739 39,276 45,268

Income tax expense 4,082 6,595 14,465 17,389

Net income $6,577 $10,144 $24,811 $27,879

Earnings per share - basic:
Earnings per basic share $0.31 $0.40 $1.05 $1.10

Earnings per share - diluted:
Earnings per diluted share $0.31 $0.40 $1.04 $1.09

Basic weighted average shares
outstanding 20,990 25,331 23,610 25,230
Diluted weighted average shares
outstanding 21,168 25,542 23,772 25,489

CHARLOTTE RUSSE HOLDING, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(amounts in 000's)
(unaudited)

June 28, June 30,
2008 2007
ASSETS
Cash and cash equivalents $45,902 $87,514
Inventories 49,798 53,509
Prepaid rent expense -- 10,145
Other current assets 16,938 13,709
Deferred tax assets 6,161 6,120
Total current assets 118,799 170,997

Fixed assets, net 222,291 205,832
Goodwill 28,790 28,790
Other assets 1,085 660
Deferred taxes 970 --
Total assets $371,935 $406,279

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, trade $30,929 $36,232
Accounts payable, other 7,979 8,743
Accrued payroll and related expense 5,466 4,740
Income and sales taxes payable 2,378 2,737
Other current liabilities 9,541 7,361
Total current liabilities 56,293 59,813

Deferred rent 115,261 100,512
Other Liabilities 1,028 140
Total liabilities 172,582 160,465

Total stockholders' equity 199,353 245,814
Total liabilities and stockholders' equity $371,935 $406,279

(Logo: http://www.newscom.com/cgi-bin/prnh/20030602/CHICLOGO)

SOURCE Charlotte Russe Holding, Inc.

Investors, Patti Johnson, Chief Financial Officer of Charlotte Russe Holding,
Inc., +1-858-490-2603; or Christine Greany of The Consumer Group, LLC,
+1-858-523-1732, for Charlotte Russe Holding, Inc.; or Media, Stephanie
Pillersdorf or Kara Findlay, both of Sard Verbinnen & Co., +1-212-687-8080,
both for Charlotte Russe Holding, Inc.