Young women's clothing retailer Charlotte Russe Holding Inc. (CHIC) posted a 75 percent slump in first-quarter earnings Thursday and forecast a loss for the second quarter, sending its shares lower.

The San Diego-based company said it expected sales at stores open at least a year to fall in its second quarter, following on a 9.9 percent decline in same-store sales in the first quarter, which ended Dec. 25.

Earnings for the first quarter ended Dec. 25 dropped to $1.6 million, or 7 cents per share, from $6.6 million, or 28 cents per share, in the same period a year earlier.

Analysts on average forecast earnings of 9 cents per share, according to Reuters Estimates (search).

Net sales for the first quarter increased to $150 million from $149.3 million for the first quarter last year.

"It's obviously a disappointment and seems to indicate the turnaround is going to take longer than people thought," said Adrienne Tennant, analyst at Wedbush Morgan Securities (search).

Stock in Charlotte Russe was down 6.4 percent at $9.45 on Nasdaq (search).

Tennant noted because Charlotte Russe's quarter ended on Dec. 25, it did not get the benefit of fifth-week sales in its report. But she added that even if the company was being conservative in its outlook, it still had a long way to go.

The retailer said sales at its namesake stores had been disappointing and its Rampage brand — which carries trendy clothing aimed at teens and 20-somethings — put in only a sluggish performance.

"We did not achieve the expected momentum as the selling season progressed due to our fashion misses and weakness in the junior sector. ... We have been aggressively challenging out merchandising team and their processes to prepare for our spring assortments," Chief Executive Mark Hoffman said in a statement.

Charlotte Russe, which had cut its outlook for second time in December, said forecasting continued to be a challenge in light of the last quarter and clearance selling in January to date.

"We would guide investors to expect low single-digit negative comparable store sales in the second quarter of fiscal 2005. In terms of earnings for the quarter ended March 2005, we would guide investors to expect a loss of 7 to 11 cents per share, compared to a break-even performance last year," Hoffman said.

Instead of opening up to 60 stores for the year ending in September 2005, the company now expects to open up to 50. Previous guidance of $30 million to $34 million of capital expenditures for fiscal 2005 was adjusted down to $25 million $29 million.