Shapewear sales soar at Maidenform
Maidenform Brands Inc reported first quarter 2009 net sales of $114.2 million, an increase of 16.4% from the first quarter of 2008, driven by strength in its core businesses and sales of products based on the Company's patent-pending Total Solution technology to a specialty retailer and the launch of its Donna Karan and DKNY licensed brands. Reported earnings per share (EPS) of $0.26 for the first quarter of 2009 were flat with EPS of $0.26 in the first quarter of 2008.
Maurice S. Reznik, Chief Executive Officer, stated, "Our strategy to deliver quality and value to our customers across every channel, category and brand is working. During the quarter, we launched Donna Karan and DKNY licensed brands, expanded our Custom Lift franchise, drove significant market share increases in the mass merchant channel, introduced the marketplace to our Total Solution collection with a specialty retailer, and invested aggressively with our retail partners to increase inventory productivity."
"While the marketplace and economy remain challenging, we believe our relentless focus on customers, innovation, channel diversification and growing our shapewear businesses, combined with our disciplined investment and inventory management practices will enable us to grow overall market share and deliver greater value for our customers, retail partners and our shareholders in the months and quarters ahead."
Financial Results for First Quarter 2009 versus First Quarter 2008
Net sales for the first quarter of 2009 increased $16.1 million, or 16.4%, to $114.2 million. Wholesale segment net sales in the first quarter of 2009 increased $16.7 million, or 19.3%, to $103.3 million. Total international net sales, which are included in the wholesale segment, decreased $1.0 million, or 12.5%, to $7.0 million. Retail segment net sales decreased $0.6 million, or 5.2%, to $10.9 million in the first quarter of 2009.
Department Stores and National Chain Stores
Net sales for the department stores and national chain stores channel decreased $4.3 million, or 8.9%, to $44.1 million in the first quarter of 2009. This decrease reflected the weakness in this channel as a result of the global economic slowdown, along with promotional activities with retail partners to increase inventory productivity and lost sales associated with customer bankruptcies filed in the second half of 2008. During the quarter, the Company launched its licensed brands Donna Karan and DKNY.
Mass merchant channel net sales increased $9.0 million, or 29.7%, to $39.3 million in the first quarter of 2009. Key drivers of this increase included the expansion of Maidenform's Sweet Nothings brand in the shapewear and bra categories, the addition of a new program with a warehouse customer and ongoing replenishment of the Company's Inspirations brand which launched in the second quarter of 2008.
Net sales in the other channel increased $12.0 million, or 151.9%, to $19.9 million in the first quarter of 2009 primarily from the introduction of products based on the Company's patent-pending Total Solution technology with a specialty retailer and higher sales to off-price retailers.
Total retail segment net sales decreased $0.6 million in the first quarter of 2009 with same store sales down 8.4% at Maidenform's retail outlet stores, resulting largely from reduced customer traffic and weakness in the overall economy. Internet sales were up $0.1 million, or 8.3%, to $1.3 million. Maidenform had 77 retail outlet stores as of the end of the first quarter of 2009 compared to 78 retail outlet stores in the same period of 2008.
As a percentage of net sales, consolidated gross margins decreased 670 basis points to 32.0%. The majority of this decrease was a result of increased promotional activity to drive inventory productivity, and the mix of customers and products, including a higher percentage of net sales from the Company's lower margin other and mass merchant channels and lower net sales from its retail segment.