Body Central Corp (NASDAQ:BODY) Scares Investors Away With Its Liquidity Status


Body Central Corp (NASDAQ:BODY) stock was witness to one of its worst performances at the stock market on 26th March, when its market valuation evaporate by close to 35 percent during the day’s trading. The investor stampede out of the stock was triggered by forgettable results that the company announced for its fourth quarter operations after markets closed on 25th March.

Highlights Of 4Q

Revenues for the fourth quarter went down by a huge 18.3% to bottom out at $66.2 million, as against the $81.0 million that the company had reported in 4Q12. Sales from stores saw a 19.5 percent decrease to plateau out at $59.3 million as its sales from comparable stores saw a huge 26 percent decrease in the quarter. Loss from operations for the quarter was $26.6 million, which was well below the $3.9 profits it had reported in 4Q12. The firm also disclosed that it had opening up three stores in the 4Q, and its over all reach in the market had increased to 294 stores as of FY13 end.

Huge Concerns Around Liquidity

The biggest concern that investors would take back from the earnings call addressed by Body Central Corp (NASDAQ:BODY) management post the results announcement, that they hoped to generate more liquidity by cutting down costs and shutting down non performing stores, but went on to add that they feared a significant risk of not being able to continue operations, in the event of those liquidity raising efforts fail to succeed.

CEO Speak

Its Chief Executive Officer Brian Woolf has been quoted to have said that, “Our fourth quarter results reflect challenges facing the Company as we work to improve our store and direct business merchandising assortments and drive traffic. We remain focused on executing our strategy and serving our customers amid a difficult environment. We currently have approximately $20.1 million of cash and up to $5 million under the undrawn loan facility.”


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