The retailer reported a net loss of $32.8 million, or 37 cents a share, in the period ended May 31, compared with a net loss of $56.4 million, or 64 cents, a year ago. Analysts surveyed by Thomson Reuters expected a loss of 15 cents a share. First-quarter same-store sales declined 5.4 percent from last year.
This is the latest clear sign that the housing slump is more than just the bursting of a subprime bubble. Many Alt-A, or even full prime, as well as subprime loans that haven’t gone into foreclosure are adjustable-rate mortgages that are resetting right now.
Those resets mean less to charge on maxed-out credit cards that are getting tougher to pay off.
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