Shapewear & DKNY business do well – Maidenform

11 Nov '11

4 min read

Maidenform Brands Inc, a global branded marketer of intimate apparel, reported third quarter 2011 net sales of $148.2 million, an increase of 1.6% over the third quarter of 2010. EPS was $0.44 for the third quarter of 2011 compared to EPS of $0.55 for the third quarter of 2010.

"While we increased sales and market share in the third quarter, we are disappointed with our earnings performance, which was below our expectations. The quarter was impacted by several factors, including a decline in consumer traffic in our category, that suppressed sales and drove higher costs to promote and liquidate overstocks.

"We expect these conditions to persist in the fourth quarter and we are taking action to mitigate them. To this end, we have instituted several new initiatives to increase sales, expand our gross margins and control our spending, and we look forward to growing Maidenform's profits in 2012 and beyond," stated Maurice S. Reznik, Chief Executive Officer.

Financial Results for Third Quarter 2011 versus Third Quarter 2010
Net sales for the third quarter of 2011 increased $2.4 million, or 1.6%, to $148.2 million. Wholesale segment net sales for the third quarter of 2011 increased $1.6 million, or 1.2%, to $130.2 million. Retail segment net sales increased $0.8 million, or 4.7%, to $18.0 million.

The Company's net sales performance by channel of distribution is highlighted in Exhibit 1 to this press release.

Wholesale Segment
Department Stores and National Chain Stores
Net sales for the department stores and national chain stores channel decreased $0.5 million, or 0.8%, to $59.9 million for the third quarter of 2011. This decrease was a result of soft intimate apparel retail trends which impacted the Company's bra and pant categories. These declines were partially offset by increases in the shapewear category and DKNY business.

Mass Merchants
Mass merchant channel net sales increased $5.9 million, or 15.1%, to $45.1 million for the third quarter of 2011. This increase was led by expanded assortments and increased replenishment of the Company's shapewear and bra categories.

Other
Net sales in the other channel decreased $3.8 million, or 13.1%, to $25.2 million for the third quarter of 2011 primarily from decreased sales to a specialty retailer.

Total international net sales, which are included in the wholesale segment, increased $0.2 million, or 1.4%, to $14.1 million. International sales benefited from favorable currency exchange rates and increased sales primarily in the United Kingdom which were partially offset by sales declines in Canada and Mexico.

Retail Segment
Total retail segment net sales increased $0.8 million, or 4.7%, to $18.0 million. Same store sales, defined as outlet stores that have been open for more than one year, increased 2.4%. Internet sales increased $0.2 million, or 13.3%, to $1.7 million for the third quarter of 2011. The retail segment operated 75 outlet stores and four kiosks and carts as of the end of the third quarter of 2011 and 73 outlet stores and four kiosks and carts as of the end of the third quarter of 2010.

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