Same stores sales at US hobby and crafts retailer AC Moore fell by 10% in the second quarter, compared with the same period in 2006.

Overall, sales fell by 1.1% to $259.8 million and the company posted a quarterly loss of $0.3 million, though it was hit by a $600,000 one-off legal settlement cost.

The company expects to see an improvement as initiatives to improve store gross margins and to reduce store inventory begin to have a positive effect on the bottom line.