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NY & Co continues to view 2011 as a transition year
20
May '11
New York & Company Inc, a specialty apparel chain with 553 retail stores, announced results for the first quarter ended April 30, 2011. For the first quarter of fiscal year 2011, net sales were $239.4 million, as compared to $237.0 million for the first quarter of fiscal year 2010. Comparable store sales for the first quarter of fiscal year 2011 increased 2.5%, as compared to an increase of 2.9% in the prior year first quarter.

Operating loss for the first quarter of fiscal year 2011 was $3.6 million, reflecting a significant improvement from the prior year's first quarter operating loss of $8.7 million.

Net loss for the first quarter of fiscal year 2011 narrowed to $3.7 million, or $0.06 per diluted share, with an effective tax rate of 1.4%. This compares to the prior year net loss of $4.9 million, or $0.08 per diluted share, with an effective tax rate of 45.3%. On a non-GAAP basis, normalizing taxes to eliminate the valuation allowance recorded in the first quarter of fiscal year 2011, the Company's adjusted net loss was $2.2 million, or $0.04 per diluted share, as compared to $0.08 per diluted share for the first quarter of fiscal year 2010.

Gregory Scott, New York & Company's CEO, stated: "During the first quarter we remained focused on our stated goal of driving modest comparable store sales gains while controlling markdowns and tightly managing inventory and expenses. While we continue to view 2011 as a transition year, we are encouraged by our customers' positive response to our spring fashion which drove improved levels of regular price selling. In addition, changes to our product flow and promotional calendar allowed us to optimize our sales productivity. These strategies, along with leverage of our buying and occupancy costs, fueled a significant improvement in our operating results for the quarter versus last year."

During the quarter, the Company accomplished the following:

• The Company's E-commerce business produced strong results with sales increasing 36.2% from the year-ago period.
• Gross profit as a percentage of net sales improved by 120 basis points versus the prior year, driven by improved leverage in buying and occupancy costs combined with controlled levels of promotional activity.
• Selling, general and administrative expenses as a percentage of net sales declined by 100 basis points versus the prior year.
• Inventory remains tightly managed with total quarter-end inventory declining by 15.4%, as compared to the end of last year's first quarter. Inventory per average store at the end of the first quarter decreased 11.4%, as compared to the end of last year's first quarter.
• The Company ended the quarter with $35.1 million of cash-on-hand and no outstanding borrowings under its revolving credit facility.
• The Company remodeled one existing store and closed two stores, ending with 553 stores, including 24 outlet stores, and 3.0 million selling square feet in operation.

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