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Destination Maternity Q2’FY14 net sales drop 6.5%

April 10, 2014 (United States Of America)

Destination Maternity Corporation, the world's leading maternity apparel retailer, reported sales for the second quarter of fiscal 2014 ended March 31, 2014 and updated its earnings guidance for the second quarter of fiscal 2014.
 
Net sales for the second quarter of fiscal 2014 decreased 6.5% to $126.1 million from $134.9 million reported for the second quarter of fiscal 2013.  
 
The decrease in total reported sales for the second quarter of fiscal 2014 compared to the second quarter of fiscal 2013 resulted primarily from the decrease in comparable sales and decreased sales related to the Company's continued efforts to close underperforming stores.
 
Net sales for the first six months of fiscal 2014 decreased 3.4% to $260.9 million from $270.1 million reported for the first six months of fiscal 2013.  
 
The decrease in total reported sales for the first six months of fiscal 2014 compared to the first six months of fiscal 2013 resulted primarily from the decrease in comparable sales and decreased sales related to the Company's continued efforts to close underperforming stores.
 
Ed Krell, Chief Executive Officer of Destination Maternity, noted, "Our sales for the second quarter of fiscal 2014 were considerably weaker than planned.  We believe the primary driver of this sales weakness was the adverse weather conditions across much of the United States during the quarter, which included significantly colder than normal temperatures and much more inclement weather than normal, with numerous periods of snow and icy conditions which suppressed store traffic for us and many retailers in many regions of the United States.  
 
These extreme weather conditions adversely impacted sales, particularly sales of Spring merchandise, which represent a significantly larger percentage of our total sales for the second fiscal quarter than do sales of Fall merchandise.  We believe that our weaker than planned sales results also reflect the continued challenging overall economic environment which has affected many retailers in recent months.  
 
Our sales for the quarter were well below the low end of our expected sales range and, as a result of this sales shortfall, we expect our earnings for the second quarter to be between $0.23 and $0.24 per share, which is below the low end of our prior earnings guidance range of $0.35 to $0.40 per share that we provided in our January 30, 2014 press release, and significantly lower than our second quarter fiscal 2013 earnings of $0.44 per share.  Our second quarter fiscal 2014 earnings per share are expected to include approximately $0.02 per share of other charges related to the previously announced relocation of our headquarters and distribution facilities.  
 
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