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Charming Shoppes reports boost in quarterly profits

Reporting improved sales at its Lane Bryant stores, in particular, Bensalem apparel retailer Charming Shoppes Inc. said Thursday that it earned $26 million during its first quarter, a sizable jump from $3.9 million a year earlier.

The boost comes as the company, struggling for several years with declining sales and profitability, is executing a plan to close 240 unprofitable stores this year. It also has been reducing inventory to help stabilize prices and avoid markdowns of heaps of unsold merchandise, officials said.

Earnings for the quarter ended April 30 translated to net income of 22 cents per share, versus 3 cents per share the same period a year ago.

Lane Bryant's quarterly comparable sales, measured at stores open for at least a year, increased 7 percent over the same period a year earlier, the company said. The higher sales at the company's major plus-size-apparel chain contributed to an overall 2 percent increase in comparable sales, a key indicator of retail health.

Higher online sales, which increased 16 percent, also helped shore up results. Overall net sales for the quarter were flat, at $504 million.

As for its two other major chains, comparable sales were down 3 percent at Fashion Bug and 2 percent at Catherines, the company said.

More than half the 240 unprofitable stores being closed are Fashion Bug locations. Of 78 already shut down this year, 46 have been Fashion Bugs, the company said.

By year's end, chief financial officer Eric M. Specter told analysts, "the majority of the Fashion Bug stores that will remain will be, in fact, profitable."

President and chief executive Anthony M. Romano said high cotton prices were affecting the company but would likely have a greater impact later this year.

Charming Shoppes has increased some prices on merchandise and is gauging to what extent its customers can withstand the additional cost, given that consumer spending is also being affected by rising gas and food prices, Romano said.

Shares were up 63 cents (16.28 percent) to $4.50 early this afternoon.