Destination Maternity to exceed last year's results

08 Jul '11

5 min read

“In addition, it is also important to note that our comparable store sales and comparable retail sales results are negatively impacted by the cannibalization impact of our Macy's leased department expansion, which had its first full month of operation in March 2011. We estimate that this cannibalization impact hurt our third quarter comparable store sales by between 1 and 2 percentage points.

"During the third quarter of fiscal 2011 we made a $10 million optional prepayment on our Term Loan and we paid our second regular quarterly cash dividend, after having initiated this regular quarterly cash dividend in the second quarter of fiscal 2011. Our debt prepayment and regular quarterly dividend payments demonstrate our confidence in the Company's financial strength, cash flow generation, and prospects for the future, and highlight our commitment to continue to drive shareholder value."

During June 2011, the Company opened one Destination Maternity multi-brand store and closed one store. As of the end of June 2011, the Company operates 663 stores, 1,697 leased department locations and 2,360 total retail locations, compared to 702 stores, 976 leased department locations and 1,678 total retail locations operated at the end of June 2010.

The increase in leased department locations at the end of June 2011 versus the end of June 2010 predominantly reflects the opening of 517 leased department locations during the second quarter of fiscal 2011 for our Macy's expansion, and the opening of an additional 217 Sears and Kmart leased department locations in September and October 2010.

Days Adjustment Calendar Shift

Destination Maternity reports sales on a calendar month basis, rather than on a "4-5-4 retail fiscal calendar" where each fiscal week and fiscal month starts on a Sunday and ends on a Saturday. Thus, for each calendar month, there is typically a "days adjustment calendar shift" which may help or hurt reported calendar month sales and comparable retail sales due to different days of the week typically contributing more sales than other days of the week.

For June 2011, there was one more Thursday and one less Tuesday compared to June 2010. The Company estimates this calendar shift favorably impacted its reported comparable retail sales for June 2011 by approximately 0.2 percentage points. For June 2010, there was one more Wednesday and one less Monday compared to June 2009. The Company estimates this calendar shift did not have an impact on its reported comparable retail sales for June 2010.

Destination Maternity Corporation

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