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FACTORY 2-U STORES Oct Same-Store Sales Fell 10.8%
Wednesday November 5, 5:47 pm ET


SAN DIEGO (Dow Jones)--Factory 2-U Stores Inc. (NasdaqNM:FTUS - News)'s October same-store sales fell 10.8%, dragged down by weather that was warmer than last year in a number of the retailer's markets.

Also, wildfires and labor strikes in Southern California combined to hurt results in the company's 51 or so stores in the region.

Same-store sales missed the company's internal estimates as well as First Call estimates of a 10.4% decline.

In a press release Wednesday, Factory 2-U Stores said total sales for the four weeks ended Nov. 1 fell 14.5% to $35.4 million from $41.3 million.

The company estimated that excluding the warm weather and the California events, same-store sales for the month would have declined about 6%.

Factory 2-U Stores has posted same-store sales declines since July, and last month the company lowered third-quarter guidance, citing soft apparel sales.

In October, the company's home and domestics businesses remained strong, while men's and women's accessories and furnishings comparable-store sales were up 11% , reflecting a continued effort to maintain better inventory positions in these categories.

Geographically, the best performing areas were Las Vegas and Washington.

Looking ahead, more normal weather in the company's markets and a better operating environment in California should yield same-store sales in the positive low single digits for the fourth quarter ending Jan. 31.

Factory 2-U Stores operates 243 off-price retail stores. The company didn't open or close any stores in the October sales period.

The company will provide a mid-month sales update for November on Nov. 17, and expects to release third-quarter operating results on Nov. 12.

Shares of Factory 2-U Stores traded heavily in the after hours, declining 6.3% , or 14 cents, to $2.06, according to the Island ECN (News - Websites) order book. The shares closed the regular session on the Nasdaq National Market at $2.20, up 8 cents, or 3.8%. The stock reached a 52-week high of $8.55 in July and a low of $1.45 in November 2002.

Company Web site: http://www.factory2-u.com

-Dorothea Degen; Dow Jones Newswires; 201-938-5400