New York & Co's eCommerce business runs well
New York & Company Inc., a specialty apparel chain with 542 retail stores, announced results for the third quarter ended October 29, 2011.
Third Quarter Fiscal Year 2011 Results:
• Net sales were $216.7 million compared to $238.2 million for the third quarter of fiscal year 2010.
• Comparable store sales decreased 5.2% compared to a 3.6% increase in the third quarter last year.
• Operating loss was $6.0 million compared to an operating loss of $4.0 million in the third quarter last year.
• Net loss was $9.0 million, or $0.15 per diluted share and included an unusual tax charge of $2.5 million, or $0.04 per diluted share. The charge pertains to an IRS income tax audit for tax years prior to and including 2002.
• Net income for the same period last year was $1.9 million, or $0.03 per diluted share, which included an unusual tax benefit of $6.1 million, or $0.10 per diluted share, reflecting a change in accounting methods for tax purposes, and the previously disclosed unusual charge of $0.01 per diluted share.
• As previously disclosed, the Company's income tax provision reflects the continuing impact of its deferred tax valuation allowance initially recorded in the second quarter of fiscal year 2010.
Gregory Scott, New York & Company's CEO, stated: “We were disappointed with our sales performance during the quarter. We believe our product continues to resonate with our customers as evidenced by our improved retail inventory turns and while our promotional cadence was the same as last year, it did not drive the level of traffic and transactions that we anticipated.
During the third quarter our outlet strategy remained on track and sales nearly doubled in our eCommerce business versus the third quarter of last year. Profitability trailed the same period in the prior year; however, we continued to diligently manage expenses during the third quarter and generated leverage in SG&A. Our balance sheet remains solid with inventory appropriately positioned to capitalize on the holiday season.”
Mr. Scott continued: “Throughout the year-to-date period we have successfully focused our efforts on reducing markdown levels and decreasing the level of promotional activity, while driving more regular price selling as we improve our assortments. Looking ahead to next year, we are focused on increasing New York & Company's brand awareness and driving incremental traffic to both our stores and online.
We are also excited to build upon the success we have experienced in our outlet business and plan to open between 15 and 20 new locations in fiscal year 2012. The strong return on investment generated by our outlet stores combined with the growth of our eCommerce business will allow us to continue to advance our multi-channel growth strategy.”
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New York & Company Inc