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Sales slip 4.3% at Destination Maternity in FY'14
11
Oct '14
NASDAQ-listed and maternity apparel retailer, Destination Maternity Corporation reported a 4.3% year-on-year fall in revenues for the full fiscal year ended September 30, 2014.

Net sales for fiscal year 2014, dropped 4.3% to $517.0 million from $540.3 million, the retailer reported for the full year fiscal 2013.

Destination Maternity attributed the decline in sales to fall in comparable sales and decreased sales related to its continued efforts to close underperforming stores.

Fiscal year 2014 sales were also below the low end of its guidance range of $519.5 to $524.0 million provided in its July 30, 2014 press release.

“This was primarily due to the reported comparable sales decrease of 3.7%, which was below the low end of the guidance range for a comparable sales decrease of between 2.3% and 3.0%,” the retailer explains.

According to the retailer, the weakness stems from continued difficult retail environment which resulted in lower store traffic and weaker consumer acceptance to its merchandise assortments.

Destination Maternity also had to initiate higher than planned price promotional and markdown activity to manage inventory in the fourth fiscal quarter of 2014.

CEO Anthony Romano who joined Destination Maternity two months back also showed his disappointment by saying, “We are obviously very disappointed in our performance during fiscal 2014.”

The maternity apparel retailer now expects diluted earnings per share for the full year to be between $0.81 and $0.86 per share and significantly lower than fiscal 2013 earnings of $1.78 per share.

Earnings are also below the low end of its prior earnings guidance range of $1.11 to $1.21 per share that it announced in July 2014.

Destination Maternity said its fiscal year 2014 earnings per share are expected to include approximately $0.14 per share of other charges or income.

Anthony Romano added, “Over the next few months I will continue learning and working with our management team and our Board of Directors to further craft our go-forward strategy for fiscal 2015 and beyond.”

In fiscal year 2014, the retailer opened 22 stores, including eight Destination Maternity nameplate stores, and closed 50 stores, including seven closings of Destination Maternity nameplate stores.

As of September 30, 2014, it operates 568 stores, 1,326 leased department locations and 1,894 total retail locations. (AR)

Fibre2fashion News Desk - India

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