New York & Co reports positive results in Q4FY16

21 Mar '16

3 min read

GAAP net income for the fourth fiscal quarter ended January 30, 2015 at clothing retailer New York & Company was $0.1 million, or breakeven per diluted share as against GAAP net loss of $6.7 million, or a loss of $0.11 per diluted share.

On a non-GAAP basis, the company's fourth quarter 2015 adjusted net income was $0.7 million, or $0.01 per diluted share compared to non-GAAP adjusted net loss of $0.4 million, or a loss of $0.01 per diluted share.

However, net sales at the specialty apparel chain with 490 retail stores grew at just 1.45 per cent to $271.3 million in the reporting quarter versus $267.4 million in the prior fiscal's same quarter.

Gross profit as a percentage of net sales increased 10 basis points to 25.7 per cent vis-à-vis in the fiscal ago quarter's gross profit percentage of 25.6 per cent.

“This improvement reflects a 130 basis point increase in product margins due to reduced product costs and a 110 basis point improvement in the leverage of buying and occupancy expense,” a press release stated.

“This was offset by a 230 basis point increase in other cost of goods sold, principally shipping costs associated with the significant growth in the company's ecommerce sales,” the company observed.

Selling, general and administrative expenses were $69.2 million, as compared to $74.7 million in the earlier fiscal's fourth quarter.

GAAP operating results improved by $7.0 million to income of $0.6 million as against GAAP operating loss of $6.4 million.

“Total fourth quarter-end of fiscal 2016 inventory decreased 6.4 per cent year on year, due to lower levels of inventory in-transit,” New York & Co added.

The company changed shipping terms with certain vendors to take title later in the supply chain, as well as transitioned its supply chain back to West Coast ports.

“Inventory on-hand increased 6.2 per cent as the company positioned inventory for the Spring selling period,” the retailer informed.

Capital spending for the quarter under review was $5.8 million, flat over the corresponding quarter of prior fiscal, primarily reflecting spend on its information technology infrastructure.

The company ended the quarter with $61.4 million of cash-on-hand and no outstanding borrowings under its revolving credit facility.

The retailer closed 18 New York & Company stores during the fourth quarter, ending the fiscal year with 490 stores, including 82 Outlet stores, and 2.5 million selling square feet in operation.

CEO Gregory Scott said, “We finished the fiscal strongly capping off another successful fiscal of growth and continued progress toward our long term goals,”

“The fourth quarter was highlighted by increased sales, positive comparable sales, expansion in gross margin and a reduction in expenses,” he also added.

“Combined, this drove a $7.0 million improvement in GAAP operating income and a $1.1 million increase in non-GAAP adjusted net income versus the fourth quarter of fiscal 2015,” Scott observed. (AR)

Fibre2Fashion News Desk – India

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