FAO Inc., parent company of The Right Start Inc., FAO Schwarz and Zany Brainy, has lowered its revenue and earnings expectations.
The King of Prussia, PA-based firm said that it would not meet previously issued guidance. It blamed restrained consumer and weak economic development that continued from the third quarter into the early part of the fourth quarter.
“In making this announcement, we are attempting to reduce investor expectations about how our business may perform in the coming months based on the sales trends we have seen in the third and early fourth quarter,” said CEO Jerry R. Welch in a statement.
The company has placed almost 100 Right Start boutiques into Zany Brainy stores, but that and other initiatives will not be enough to allow the firm to meet its earlier guidance, Welch added.
FAO, formerly known as The Right Start, acquired Zany Brainy last year. The firm operates Web sites for each of its brands.
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