NEW YORK—Shares of Bebe Inc. fell Monday after an analyst said that any turnaround at the apparel retailer isn't likely to come before the fall season and downgraded the stock.
Roth Capital Partners analyst Elizabeth Pierce said in a note to investors that channel checks do not indicate an improvement in spring results.
"We are just not that optimistic that the 'turn' will come before the Fall season," she wrote. "Therefore, based on the lack of momentum in the business, we expect the stock to be range bound over the foreseeable future."
Bebe said earlier this month fiscal third-quarter same-store sales, or sales in stores open at least one year, fell 7.6 percent. It is scheduled to report earnings Thursday.
Pierce said the "disappointing" same-store sales, soft sales of separates and the weak apparel environment will likely lead to earnings at the low end of guidance.
She also expects "very conservative" guidance for the fourth quarter "given the challenges the company has had in turning sales around and based on the general economic climate."
She downgraded the company to "Hold" from "Buy" and lowered its price target by $2 to $11.
Shares fell $1.17, or 10.6 percent, to close at $9.87. The stock has traded between $9.01 and $18.42 during the past 52 weeks.
