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New York & Company declares loss in Q3

21
Nov '08
New York & Company, Inc., a specialty apparel chain with 600 retail stores, today announced results for the third quarter ended November 1, 2008. The results of operations discussed below are for the Company's continuing operations only, the New York & Company brand.

For the third quarter of fiscal year 2008, net sales were $249.0 million, as compared to $276.4 million for the third quarter of fiscal year 2007. Comparable store sales for the third quarter of fiscal year 2008 decreased 14.0%, compared to a 4.8% decrease in the prior year third quarter.

The current quarter sales results include the shift of a key promotional program from the last week of the third quarter into early November. Net loss from continuing operations for the third quarter of fiscal year 2008 was $8.0 million, or $0.13 per diluted share, inclusive of a pre-tax charge of $2.5 million, or $0.03 per diluted share, related to a recent management change.

This compares to prior year third quarter net income from continuing operations of $5.3 million, or $0.09 per diluted share. For the nine month period ended November 1, 2008, net sales were $814.8 million, as compared to $835.5 million for the nine months ended November 3, 2007. Comparable store sales decreased 7.6% for the nine month period ended November 1, 2008, as compared to a 0.3% decrease in the prior year period.

Net income from continuing operations for the nine month period ended November 1, 2008 was $7.3 million, or $0.12 per diluted share, inclusive of a pre-tax charge of $2.5 million, or $0.03 per diluted share, related to a recent management change. This compares to prior year nine month net income from continuing operations of $15.5 million, or $0.25 per diluted share.

Richard P. Crystal, New York & Company's Chairman and CEO, stated: “During the quarter we continued to manage to the key priorities that we set at the beginning of the year, focusing on delivering strong assortments, outstanding marketing and great value to our customers. While we made progress on our key initiatives, the dramatic deterioration of the economy and the macroeconomic environment had a significant effect on consumer spending beginning in September and continuing throughout the quarter.

As a result, while our third quarter financial performance is in line with our revised guidance, it is well below our original expectations. While our November sales trend has significantly improved versus October, with the movement of our City Cash promotion and the introduction of our holiday floor set, we are still cautious as we begin the holiday season and are preparing for a highly promotional environment.”

Significant highlights with respect to the third quarter included the following:
• The Company's E-commerce store continued to produce strong results with sales almost double the level of the prior year's third quarter;
• Inventory remains under tight control with a 10.5% decline in inventory per average store as compared to the end of last year's third quarter;
• Selling, general and administrative expenses declined by 2.9% on an average store basis; and
• The Company ended the quarter with $41 million of cash on hand (up $26 million from the prior year third quarter), reduced long term debt and no outstanding borrowings under its revolving credit facility.

New York & Company


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