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bebe CEO Resigns, Wiggett Joins as Interim Chief

Zacks Equity Research

bebe stores, Inc. (BEBE) recently announced the resignation of its Chief Executive Officer (CEO) Steve Birkhold with immediate effect. Simultaneously, the company's board of directors appointed the current CEO of Jackson Hole Group, Jim Wiggett, as its interim CEO, until the search for a permanent CEO is materialized.

Wiggett has lent his advisory services to the company for the last 5 years. With over 40 years of valuable experience in merchandising, retail and business, he has led executive roles in blue-chip companies before founding the Jackson Hole Group. Alongside, Wiggett has been part of a number of charitable boards, corporate boards and professional associations.

Management believes that Wiggett, with his able leadership, profound experience and business proficiency, is a priceless asset for bebe and is likely to help the company achieve its long-term goals.

Recently, this woman’s clothing and accessories designer reported third-quarter fiscal 2014 loss per share of 27 cents, which was narrower than the Zacks Consensus Estimate of a loss of 30 cents and the comparable prior-year quarter loss of 62 cents.

The narrower year-over-year loss primarily reflects the effects of a valuation account being maintained against deferred tax assets, leading to a minimal effective tax rate. However, net sales tanked 17.2% to $93.5 million, marginally beating the Zacks Consensus Estimate of $93 million. Comparable-store sales (comps) for the quarter ended Apr 5, 2014, descended nearly 5.7%.

Sales were disappointing owing to the loss of a retail week in Jan 2014. Results were also impacted by the adverse winter weather, which led to nearly 136 transitory store closures, leading to soft sales. Moreover, the Easter shift to late April had a significant impact on the company’s third-quarter sales.

At present, bebe carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the retail apparel and shoe sector include Citi Trends, Inc. (CTRN) with a Zacks Rank #1 (Strong Buy), and Foot Locker, Inc. (FL) and The Men's Wearhouse, Inc. (MW), both carrying a Zacks Rank #2 (Buy).

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