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Mothers Work Inc reports lowers sales
11 Jul '08
6 min read
Net sales decreased 0.7% to $152.2 million for the third quarter of fiscal 2008 ended June 30, 2008, from $153.2 million for the same period of the preceding year.
The decrease in sales versus last year resulted primarily from a decrease in sales from our leased department and licensed relationships, largely due to a decrease in Sears leased department sales, as well as reduced sales volume from the ongoing closure of certain underperforming stores, substantially offset by an increase in comparable store sales and increased internet sales.
Comparable store sales increased 2.4% during the third quarter of fiscal 2008 (based on 989 locations) versus a comparable store sales decrease of 8.2% during the third quarter of fiscal 2007 (based on 1,393 locations).
For the quarter ended June 30, 2008, the Company opened seven stores, including three Destination Maternity Superstores, and closed 12 stores, including seven store closings related to multi-brand store openings.
Rebecca Matthias, President and Chief Creative Officer of Mothers Work, noted, "We are pleased with our strong sales performance for June and for the third quarter, despite the continued weak overall economic and retail environment, as we continue to anniversary weaker sales results from a year ago and continue to refine our merchandise assortments and our in-store merchandise presentation.
Our sales for the third quarter of $152.2 million were within our guidance range of $150.0 million to $153.5 million provided in our April 23, 2008 press release, with our comparable store sales increase of 2.4% for the quarter within our guidance range of an increase of 1.0% to 3.5% for the quarter.
We project that our third quarter diluted earnings per share will be between $0.66 and $0.70 per share, within our guidance for diluted earnings per common share of between $0.61 and $0.76 per share provided in our April 23, 2008 press release.
"As we announced in our July 1, 2008 strategic restructuring press release, we are streamlining our merchandise brands and store nameplates and have implemented cost reductions in order to simplify our business model, reduce our overhead costs and improve and tighten our merchandise assortments to drive the best possible results during this difficult economic period and for the long term.
We expect to realize approximately $5 million of annualized expense savings from these actions, beginning in the fourth quarter of fiscal 2008, and expect to incur pre-tax expense of approximately $0.9 million from these actions, with approximately $0.7 million of this expense expected to be recorded in the fourth quarter of fiscal 2008 and approximately $0.2 million expected to be recorded in the first quarter of fiscal 2009.
Pursuant to our strategic restructuring, we will re-brand our Mimi Maternity merchandise brand under our A Pea in the Pod brand beginning with the Spring 2009 collection, which will debut beginning in November 2008.
We also plan to streamline our store nameplates beginning in January 2009, by renaming our single-brand Mimi Maternity stores as A Pea in the Pod, and by renaming our multi-brand Mimi Maternity stores as Destination Maternity.
We feel strongly that the strategic restructuring and streamlining of our merchandise brands and store nameplates will help improve our long-term profitability by simplifying our brand structure, reducing our cost structure, and leveraging both our renowned A Pea in the Pod luxury brand and our growing multi-brand Destination Maternity store brand.
"We will report results for our third quarter and hold an investor conference call on Tuesday, July 29, 2008, at which time we will provide additional information related to our results for the third quarter and our future financial guidance."
The decrease in sales versus last year resulted primarily from a decrease in sales from our leased department and licensed relationships, largely due to a decrease in Sears leased department sales, as well as reduced sales volume from the ongoing closure of certain underperforming stores, substantially offset by an increase in comparable store sales and increased internet sales.
Comparable store sales increased 2.4% during the third quarter of fiscal 2008 (based on 989 locations) versus a comparable store sales decrease of 8.2% during the third quarter of fiscal 2007 (based on 1,393 locations).
For the quarter ended June 30, 2008, the Company opened seven stores, including three Destination Maternity Superstores, and closed 12 stores, including seven store closings related to multi-brand store openings.
Rebecca Matthias, President and Chief Creative Officer of Mothers Work, noted, "We are pleased with our strong sales performance for June and for the third quarter, despite the continued weak overall economic and retail environment, as we continue to anniversary weaker sales results from a year ago and continue to refine our merchandise assortments and our in-store merchandise presentation.
Our sales for the third quarter of $152.2 million were within our guidance range of $150.0 million to $153.5 million provided in our April 23, 2008 press release, with our comparable store sales increase of 2.4% for the quarter within our guidance range of an increase of 1.0% to 3.5% for the quarter.
We project that our third quarter diluted earnings per share will be between $0.66 and $0.70 per share, within our guidance for diluted earnings per common share of between $0.61 and $0.76 per share provided in our April 23, 2008 press release.
"As we announced in our July 1, 2008 strategic restructuring press release, we are streamlining our merchandise brands and store nameplates and have implemented cost reductions in order to simplify our business model, reduce our overhead costs and improve and tighten our merchandise assortments to drive the best possible results during this difficult economic period and for the long term.
We expect to realize approximately $5 million of annualized expense savings from these actions, beginning in the fourth quarter of fiscal 2008, and expect to incur pre-tax expense of approximately $0.9 million from these actions, with approximately $0.7 million of this expense expected to be recorded in the fourth quarter of fiscal 2008 and approximately $0.2 million expected to be recorded in the first quarter of fiscal 2009.
Pursuant to our strategic restructuring, we will re-brand our Mimi Maternity merchandise brand under our A Pea in the Pod brand beginning with the Spring 2009 collection, which will debut beginning in November 2008.
We also plan to streamline our store nameplates beginning in January 2009, by renaming our single-brand Mimi Maternity stores as A Pea in the Pod, and by renaming our multi-brand Mimi Maternity stores as Destination Maternity.
We feel strongly that the strategic restructuring and streamlining of our merchandise brands and store nameplates will help improve our long-term profitability by simplifying our brand structure, reducing our cost structure, and leveraging both our renowned A Pea in the Pod luxury brand and our growing multi-brand Destination Maternity store brand.
"We will report results for our third quarter and hold an investor conference call on Tuesday, July 29, 2008, at which time we will provide additional information related to our results for the third quarter and our future financial guidance."
Mothers Work Inc
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