Destination Maternity to focus on international expansion
Destination Maternity Corporation, the world's leading maternity apparel retailer, announced operating results for the second quarter of fiscal 2010, which ended March 31, 2010, with its second quarter diluted earnings per share exceeding both its prior earnings guidance and its prior year second quarter earnings results. The Company also increased its earnings guidance for the full year fiscal 2010.
Ed Krell, Chief Executive Officer of Destination Maternity Corporation, noted, "We continue to make significant progress in improving the profitability of our business, even in the face of a difficult sales environment, while also pursuing initiatives to drive profitable future growth in sales. Our earnings for the second quarter exceeded the top end of our prior earnings guidance range and were significantly higher than last year, despite our comparable store sales decline. Our improved earnings performance is driven primarily by our continued cost reduction initiatives and strong merchandise gross margin performance, as well as from the growth in sales of our leased and licensed department relationships and increased Internet sales.
"Although we are not at all satisfied with our comparable store sales performance for the quarter, we believe it reflects the negative effect of: (i) the continued difficult overall retail environment, and (ii) our relatively stronger comparable store sales performance for the second quarter of last year (down approximately 0.8% after adjusting for the 2008 leap year impact and the later timing of Easter) compared to most apparel retailers. Our sales performance for the second quarter was within our expectations, with our comparable store sales decrease of 6.5% for the quarter within our guidance range of down 5.0% to 7.5% for the quarter, and our total sales of $131.1 million within our sales guidance range of $129.5 to $132.0 million provided in our January press release.
"As we have indicated previously, although we are pleased with our continued progress in improving the profitability of our company, by no means are we satisfied or complacent, especially with regard to our sales performance, and we are keenly focused on initiatives to drive profitable sales growth, as evidenced by the re-launch of our business with Sears, the expansion of our international business, the increased focus on and sales from our Internet business, and the introduction in February of our two new exclusive maternity apparel lines with supermodel Heidi Klum, Lavish By Heidi Klum for A Pea in the Pod and Loved By Heidi Klum for Motherhood."
Mr. Krell added, "As we plan and execute our business for both the coming year and beyond, we continue to be guided by our five key goals and strategic objectives:
1. Be a profitable global leader in the maternity apparel business, treating all our partners and stakeholders with respect and fairness.
2. Increase the profitability of our U.S. business, focusing on the following: