Here comes the mix of real retail weakness, and my dog ate the homework excuses. These should get to be a familar refrain. We will see if the crazies try and buy these dips?
64K question, though, is it just gasoline causing this?
Message 21699897
AP
CEC Cuts 3Q Outlook on Storm, Weak Sales
Tuesday September 13, 5:26 pm ET
CEC Entertainment Slashes 3Q Guidance on Damage From Hurricane Katrina, Weak Sales Trends
IRVING, Texas (AP) -- CEC Entertainment Inc., owner of the Chuck E. Cheese's pizza chain, on Tuesday said five of its stores are still closed from Hurricane Katrina and warned that weak sales would hurt third-quarter results.
CEC said the storm forced 17 of its company-operated stores to close at some point, and five remain shut. The company has missed 128 operating days due to the closures.
Meanwhile, sales are dwindling. Through the first 10 weeks of the third quarter, same-store sales have fallen 5 percent, CEC said. Same-store sales, or sales at stores open at least one year, is a closely watched measure of a retailer's performance.
The company said higher gasoline prices, ineffective cross promotions, a lack of marketing in the quarter and the loss of operating days due to the storm would likely weigh on results this year. CEC lowered its third-quarter earnings outlook to a range of 43 cent to 47 cents per share from 56 cents to 61 cents.
Analysts predict per-share income of 58 cents per share, according to a Thomson Financial survey.
"We believe the effect of high gasoline prices on disposable consumer income has been particularly hard on families with young children," said Chairman and Chief Executive Dick Frank.
CEC said it would update fourth-quarter guidance in its third-quarter report, scheduled for release Oct. 25, and cautioned that "investors should not rely on previous earnings guidance for the fourth quarter."
Previously, the company targeted fourth-quarter profit of 42 cents to 44 cents per share, compared with the analysts' consensus estimate of 42 cents per share.
Shares of CEC Entertainment fell 53 cents to close at $34.48 on the New York Stock Exchange, and slid $1.31, or 3.8 percent, to $33.17 in aftermarket activity.
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