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Shapewear net sales up at Maidenform Brands
12 Nov '10
5 min read
Retail Segment
Total retail segment net sales increased $0.4 million, or 2.4%, to $17.2 million. Same store sales, defined as outlet stores that have been open for more than one year, increased 2.2%. Internet sales increased $0.1 million, or 7.1%, to $1.5 million. The retail segment operated 73 outlet stores and four shapewear kiosk and carts as of the end of the third quarter of 2010 and 76 outlet stores as of the end of the third quarter of 2009.
Consolidated gross profit increased $8.1 million, or 18.1%, to $52.8 million in the third quarter of 2010. As a percentage of net sales, consolidated gross margins were 36.2% in the third quarter of 2010 versus 34.7% in the third quarter of 2009. This 150 basis point increase was a result of product mix and the benefit from product cost reduction efforts, which were partially offset by customer mix, including a higher percentage of net sales from the Company's lower margin other channel.
Consolidated selling, general and administrative expenses (SG&A) increased $3.6 million, or 12.8%, to $31.7 million in the third quarter of 2010 primarily as a result of increased payroll and related benefits associated with new positions added to support the Company's strategic initiatives, increased retail operating expenses, such as kiosk and cart expenditures and store lease renewals, increased marketing expenditures, variable distribution costs, and increased professional fees. As a percentage of net sales, SG&A declined to 21.7% in the third quarter of 2010 compared to 21.8% in the third quarter of 2009.
Due to all of the factors described above, operating income in the third quarter of 2010 was $21.1 million, or 14.5% of net sales, compared to $16.6 million, or 12.9% of net sales, in the third quarter of 2009.
Net interest expense in the third quarter of 2010 was $0.2 million compared to $0.5 million in the third quarter of 2009 as the Company benefited primarily from lower average debt outstanding and a lower average interest rate for the third quarter of 2010 as compared to the same period in 2009.
The Company's effective income tax rate for the third quarter of 2010 was 38.9% compared to 0.6% in the third quarter of 2009. The lower effective income tax rate in the third quarter 2009 resulted from additional net deferred tax assets, principally related to net operating losses that were recorded after the conclusion of an Internal Revenue Service audit during the period. Excluding the non-cash, one-time benefit of $6.1 million, the effective income tax rate for the third quarter 2009 was 38.2%.
Net income for the third quarter of 2010 and 2009 was $12.8 million and $16.0 million, respectively, and EPS was $0.55 and $0.67, respectively. Excluding the non-cash, one-time benefit mentioned above, net income for the third quarter of 2009 was $9.9 million and EPS was $0.42.
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Total retail segment net sales increased $0.4 million, or 2.4%, to $17.2 million. Same store sales, defined as outlet stores that have been open for more than one year, increased 2.2%. Internet sales increased $0.1 million, or 7.1%, to $1.5 million. The retail segment operated 73 outlet stores and four shapewear kiosk and carts as of the end of the third quarter of 2010 and 76 outlet stores as of the end of the third quarter of 2009.
Consolidated gross profit increased $8.1 million, or 18.1%, to $52.8 million in the third quarter of 2010. As a percentage of net sales, consolidated gross margins were 36.2% in the third quarter of 2010 versus 34.7% in the third quarter of 2009. This 150 basis point increase was a result of product mix and the benefit from product cost reduction efforts, which were partially offset by customer mix, including a higher percentage of net sales from the Company's lower margin other channel.
Consolidated selling, general and administrative expenses (SG&A) increased $3.6 million, or 12.8%, to $31.7 million in the third quarter of 2010 primarily as a result of increased payroll and related benefits associated with new positions added to support the Company's strategic initiatives, increased retail operating expenses, such as kiosk and cart expenditures and store lease renewals, increased marketing expenditures, variable distribution costs, and increased professional fees. As a percentage of net sales, SG&A declined to 21.7% in the third quarter of 2010 compared to 21.8% in the third quarter of 2009.
Due to all of the factors described above, operating income in the third quarter of 2010 was $21.1 million, or 14.5% of net sales, compared to $16.6 million, or 12.9% of net sales, in the third quarter of 2009.
Net interest expense in the third quarter of 2010 was $0.2 million compared to $0.5 million in the third quarter of 2009 as the Company benefited primarily from lower average debt outstanding and a lower average interest rate for the third quarter of 2010 as compared to the same period in 2009.
The Company's effective income tax rate for the third quarter of 2010 was 38.9% compared to 0.6% in the third quarter of 2009. The lower effective income tax rate in the third quarter 2009 resulted from additional net deferred tax assets, principally related to net operating losses that were recorded after the conclusion of an Internal Revenue Service audit during the period. Excluding the non-cash, one-time benefit of $6.1 million, the effective income tax rate for the third quarter 2009 was 38.2%.
Net income for the third quarter of 2010 and 2009 was $12.8 million and $16.0 million, respectively, and EPS was $0.55 and $0.67, respectively. Excluding the non-cash, one-time benefit mentioned above, net income for the third quarter of 2009 was $9.9 million and EPS was $0.42.
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Maidenform Brands Inc
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