Charlotte Russe Sees Tax Benefit in 2Q

The company said it now expects to earn 15 cents to 18 cents per share, including the adjustment, for the quarter ending March 29. The guidance assumes a lower estimated effective income tax rate for fiscal 2008 of 38.3 percent versus the prior rate of 39.4 percent, primarily due to a revised blended state tax rate.

Looking ahead to the third quarter, Charlotte Russe forecast a profit of 27 cents to 30 cents per share on flat to low single digit negative same-store sales.

Same-store sales, or sales in stores open at least one year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

On average, analysts surveyed by Thomson Financial forecast earnings per share of 15 cents for the second quarter and 41 cents for the third quarter.

In a statement, Chief Executive Mark Hoffman noted that transaction levels and consumer spending has declined over the past seven weeks.

"While the Easter holiday shift drove a positive comp for the third week of March, we were disappointed with our sales performance for the holiday period," Hoffman said.

Charlotte Russe operates 440 mall-based stores for women in their teens and twenties.