Interviews
News Flash
New York & Co posts Q1 breakeven results
18 May '12
5 min read
Outlook
Regarding expectations for the second quarter of fiscal year 2012, the Company provided the following:
• Comparable store sales for the second quarter of fiscal year 2012 are expected to be down slightly, and the Company expects to have five fewer stores in operation compared to the second quarter of fiscal year 2011.
• Gross margin is expected to increase between 300 and 400 basis points from the prior year's rate primarily driven by improved product costs resulting in merchandise margin increases.
• Selling, general and administrative expenses as a percentage of net sales are expected to increase approximately 200 basis points versus the prior year's second quarter reflecting investments in marketing, increases in variable based compensation, and incremental spending necessary to support the Company's growing eCommerce and Outlet businesses.
• The Company expects the effective tax rate for the second quarter of fiscal year 2012 to be approximately 0%. As previously announced, the Company continues to provide for adjustments to the deferred tax valuation allowance initially recorded in the second quarter of fiscal year 2010, offsetting any future tax provisions or benefits resulting in an approximately 0% effective tax rate.
• The Company expects inventory at the end of the second quarter of fiscal year 2012 to be up by a low single-digit percentage versus the prior year. Inventory per average store is expected to be down throughout the second quarter but is expected to increase toward the end of the quarter to ensure the Company is in an appropriate inventory position entering the Fall season.
• Capital expenditures are expected to be approximately $6.0 million for the second quarter of fiscal year 2012, as compared to $3.7 million in the second quarter last year. Depreciation expense for the second quarter of fiscal year 2012 is estimated at $9.0 million.
• During the second quarter of fiscal year 2012, the Company expects to open six new Outlet stores, remodel five existing locations, and close nine stores, ending the second quarter of fiscal year 2012 with 538 stores, including 41 Outlet stores.
• The Company does not anticipate the need to borrow under its revolving credit facility during the second quarter of fiscal year 2012.
Regarding expectations for the second quarter of fiscal year 2012, the Company provided the following:
• Comparable store sales for the second quarter of fiscal year 2012 are expected to be down slightly, and the Company expects to have five fewer stores in operation compared to the second quarter of fiscal year 2011.
• Gross margin is expected to increase between 300 and 400 basis points from the prior year's rate primarily driven by improved product costs resulting in merchandise margin increases.
• Selling, general and administrative expenses as a percentage of net sales are expected to increase approximately 200 basis points versus the prior year's second quarter reflecting investments in marketing, increases in variable based compensation, and incremental spending necessary to support the Company's growing eCommerce and Outlet businesses.
• The Company expects the effective tax rate for the second quarter of fiscal year 2012 to be approximately 0%. As previously announced, the Company continues to provide for adjustments to the deferred tax valuation allowance initially recorded in the second quarter of fiscal year 2010, offsetting any future tax provisions or benefits resulting in an approximately 0% effective tax rate.
• The Company expects inventory at the end of the second quarter of fiscal year 2012 to be up by a low single-digit percentage versus the prior year. Inventory per average store is expected to be down throughout the second quarter but is expected to increase toward the end of the quarter to ensure the Company is in an appropriate inventory position entering the Fall season.
• Capital expenditures are expected to be approximately $6.0 million for the second quarter of fiscal year 2012, as compared to $3.7 million in the second quarter last year. Depreciation expense for the second quarter of fiscal year 2012 is estimated at $9.0 million.
• During the second quarter of fiscal year 2012, the Company expects to open six new Outlet stores, remodel five existing locations, and close nine stores, ending the second quarter of fiscal year 2012 with 538 stores, including 41 Outlet stores.
• The Company does not anticipate the need to borrow under its revolving credit facility during the second quarter of fiscal year 2012.
New York & Company Inc
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