Eddie Bauer expects to post lower earnings, sales

BELLEVUE, Wash. - Eddie Bauer Holdings, Inc. said Wednesday that its sales dropped for the fourth quarter and it estimated its earnings fell as well.

Calling the retail environment for quarter "brutal, the worst in decades", company leaders also announced cost-cutting measures, including salary-freezes and cuts to its board, Wednesday to help the outdoor and lifestyle clothing company cope in the rough economy.

Eddie Bauer said Wednesday that preliminary comparable store sales — sales at stores open at least a year — fell 5.7 percent for the quarter and 1.1 percent for the fiscal year, excluding the effect from foreign exchange rates. The company closed 16 retail stores and one outlet store during the year.

Eddie Bauer expects to report that its adjusted earnings before income, taxes, depreciation and amortization in the fourth quarter of $53 million to $58 million, a decrease of $2 million to $7 million from the year-earlier quarter.

The company said its fiscal year results are estimated with $50 million to $55 million growth for fiscal 2008, an increase of $8 million to $13 million.

Eddie Bauer also said it will make other cost-cutting measures in 2009 including freezing salaries, adjusting its benefits program, cutting the size of its board of directors and cutting total board costs by up to 50 percent.

The company also said it will cut $10 million to $15 million in administrative costs, limit its capital spending and speed up new product development and launches.

Shares of Eddie Bauer closed at 48 cents, up 2 cents.

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