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Cost Plus Q3 net loss widens on costs, sales grow 3.7%

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Home decor retailer Cost Plus (NASDAQ:CPWM) saw its net loss widen in the third quarter despite a 3.7 percent increase in sales helped by higher traffic at its stores as customers spent more, the company said Friday.

The Oakland, California-based company gained 26 cents, or 3.40 percent, to reach $7.90 per share on Friday afternoon on the Nasdaq.

Net sales were up 3.7 percent to $201.9 million for the quarter ended October 29. That compares with $194.6 million, a year ago.

The company, which sells lamps, rugs and wall decor, saw its net loss widen to $8.6 million, or 39 cents per share, compared to a net loss of $8.3, or 38 cents per share, a year-prior.

Analysts, on average, had estimated a net loss of 37 cents, on revenues of $199 million, according to Bloomberg.

In a statement, Cost Plus chief executive Barry Feld said: "I am pleased with the performance of our business and the improvement in customer traffic and average ticket led by a strong customer response to our dining and living room furniture events."

"We continue to believe the company is well positioned to compete on the clear and recognizable value of its merchandise despite the challenging economy."

Same store sales rose four percent, driven by an increase in customer traffic of 1.2 percent, while the average ticket per customer rose 2.7 percent. 

Gross margin came in flat at 30.8 percent from 30.7 percent, as the slight increase was mainly due to lower occupancy costs offset by higher cost of sales.

Selling, general and administrative costs rose to 33.3 percent from 33.1 percent. Payroll costs and higher advertising expenses caused the increase, Cost Plus said.

For fourth quarter, the company anticipates net sales within the range of $354 million to $360 million. Analysts are looking for $355 million.

Comparable sales are expected to rise around four percent to six percent.

For the year 2011, the retailer foresees net sales in the tune of $953 million to $960 million, while the analysts are
predicting $952 million.

The company projects net income from continuing operations to be in the tune of 62 cents to 68 cents per share. Analysts are looking for 61 cents per share.

Quick facts: Cost Plus, Inc.

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NASDAQ:CPWM
Market: NASDAQ
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