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Destination Maternity posts Q3 earnings higher than last year
29
Jul '11
Destination Maternity Corporation, the world's leading maternity apparel retailer, announced operating results for the third quarter of fiscal 2011, which ended June 30, 2011, with its third quarter diluted earnings per share exceeding its prior year third quarter earnings results and at the low end of its April 27, 2011 earnings guidance.

The Company announced that its Board of Directors declared a regular quarterly cash dividend of $0.175 per share payable September 28, 2011. Also, the Company announced that it has extended the maturity of its credit facility from March 13, 2012 to January 13, 2013.

Net sales for the third quarter of fiscal 2011 increased 3.3% to $146.7 million from $142.0 million for the third quarter of fiscal 2010.

The increase in sales for the third quarter of fiscal 2011 compared to fiscal 2010 resulted primarily from: (1) increased sales due to the expansion of the Company's maternity apparel leased department relationship with Macy's and (2) increased Internet sales, partially offset by (3) a decrease in comparable store sales and (4) decreased sales related to the Company's continued efforts to close underperforming stores.

Comparable retail sales (which consists of comparable store sales and Internet sales) for the third quarter of fiscal 2011 decreased 1.6% versus a comparable retail sales decrease of 3.3% for the third quarter of fiscal 2010. During the third quarter of fiscal 2011, comparable store sales decreased 2.8%, and Internet sales increased 18.1%.

The comparable store sales decrease of 2.8% during the third quarter of fiscal 2011 was at the low end of the Company's guidance range of down 2.8% to up 1.1% provided in April. We estimate that the cannibalization impact of our leased department expansion with Macy's in February 2011 hurt our third quarter comparable store sales by between 1 and 2 percentage points.

Adjusted EBITDA was $45.5 million for the first nine months of fiscal 2011, an increase of 25% over the $36.5 million of Adjusted EBITDA for the first nine months of fiscal 2010.

Adjusted EBITDA before restructuring and other charges was $45.7 million for the first nine months of fiscal 2011, an increase of 7% over the $42.6 million of Adjusted EBITDA before restructuring and other charges for the first nine months of fiscal 2010.

Net sales for the first nine months of fiscal 2011 increased 2.2% to $416.0 million from $406.9 million for the first nine months of fiscal 2010. The increase in sales for the first nine months of fiscal 2011 compared to fiscal 2010 resulted primarily from: (1) increased sales due to the expansion of the Company's maternity apparel leased department relationship with Macy's and (2) increased Internet sales, partially offset by (3) decreased sales related to the Company's continued efforts to close underperforming stores.

Comparable retail sales for the first nine months of fiscal 2011 increased 0.6% versus a comparable retail sales decrease of 4.1% for the first nine months of fiscal 2010. During the first nine months of fiscal 2011, comparable store sales decreased 0.6%, and Internet sales increased 17.9%.

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