New York & Company, Inc., a specialty apparel chain with 509 retail stores posted breakeven operating results with its operating profit slipping into black and also massively reducing its net loss in the second quarter ended August 2, 2014.
In-line with its previously issued guidance, operating income for the second fiscal quarter of 2014 totalled $0.2 million, a significant improvement of $2.4 million compared to the prior year’s second quarter operating loss of $2.2 million.
While, net loss for the second fiscal quarter of 2014 narrowed massively to $0.1 million, compared to net loss of $2.7 million, or a loss of $0.04 per diluted share, in the prior year quarter, what the fashion retailer termed – “essentially breakeven per diluted share”.
For the thirteen weeks to August 2, 2014, net sales rose to $226.1 million, from $223.1 million for the comparable quarter of the previous fiscal year, while comparable store sales increased 2.3%.
During the quarter under review, the apparel retailers’ ecommerce and outlet businesses continued to grow and together represented 20.6% of total sales versus 18.0% in the year-ago period.
Driven by improved product costs combined with reductions in buying and occupancy costs, gross profit as a percentage of net sales improved 50 basis points in the first quarter of 2014, versus the prior year period.
New York & Company said selling, general and administrative expenses as a percentage of net sales were effectively managed during the second quarter of 2014 and decreased 60 basis points compared to the prior year second quarter.
Total quarter-end inventory increased 3.0% as compared to the end of last year’s second quarter reflecting slightly lower levels of in-store inventory, offset by higher levels of in-transit inventory due to delays from its contingency plans related to a potential work stoppage at certain ports.
The retailer ended the quarter with $64.7 million of cash and no outstanding borrowings under its revolving credit facility.
Capital spending for the second quarter of 2014 reached $5.5 million, as compared to $4.0 million in last year’s second quarter, primarily reflecting the remodelling of four New York & Company stores, along with the opening of four new outlets.
Gregory Scott, New York & Company’s CEO, stated: “We delivered a solid second quarter with positive comparable store sales, gross margin expansion, and expense reduction which shows progress against the key priorities, we outlined at the beginning of the year.”
He added, “During the quarter, we experienced increases in average dollar sale, conversion, and average unit retail. This led to a breakeven performance, which represented a significant improvement over last year’s operating loss”.
Inthe second quarter of 2014, New York & Company opened four new outlet stores, remodelled four existing locations, and closed one store, ending with 509 stores, including 57 outlet stores, and 2.6 million selling square feet in operation.