New York & Co's CEO pleased with first quarter results
23 May '08
4 min read
Significant highlights with respect to the first quarter include the following: • Favorable response to spring assortments, particularly wear-to-work and accessories categories, along with the elimination of non-brand building promotions led to a significant improvement in merchandise margin and a net increase of 210 basis points in gross profit margin versus the same period a year ago; • Reduced inventory by 10.5% on an average store basis driven by disciplined inventory management; • Improvement in operating cash flows of $27.0 million as compared to the same period a year ago; • Controlled costs with selling, general and administrative expenses declining by 4.3% on an average store basis; and • Further strengthened the balance sheet with $61 million in cash versus $37 million at the end of last year's first quarter while reducing debt by $6 million versus last year's first quarter end.
Outlook: The Company expects to continue its successful strategy of improving margin through disciplined promotions and inventory control during what we anticipate to be a challenging business environment. The Company's outlook for the second quarter of fiscal year 2008 reflects comparable store sales in the negative mid single-digit range with margins improving versus the same period a year ago.
The Company's current outlook for earnings per diluted share in the second quarter of fiscal year 2008 is in the range of $0.05 to $0.10. This compares to actual second quarter of fiscal year 2007 earnings per diluted share of $0.08. During the second quarter of fiscal year 2008, the Company plans to open approximately 13 stores, ending the quarter with approximately 599 stores.
In fiscal year 2008, the Company expects comparable store sales to be in the low to mid negative single-digit range and earnings per diluted share to be in the range of $0.44 to $0.54. This compares to the Company's previous guidance range of $0.42 to $0.52 and compares to actual fiscal year 2007 earnings per diluted share of $0.44.
During fiscal year 2008, the Company plans to open 25 to 30 stores, close approximately 12 stores and remodel approximately 12 stores, ending the fiscal year with 591 to 596 stores and approximately 3.3 million selling square feet in operation, with new stores representing approximately 110,000 selling square feet. Capital expenditures are estimated in the range of $48.0 million to $52.0 million in fiscal year 2008 versus $75.5 million in fiscal year 2007. Depreciation expense for the year is estimated at $44.0 million.
Quarterly Comparable Store Sales: The Company also announced that beginning in the second quarter of fiscal year 2008, it will report comparable store sales results at the same time it reports quarterly earnings. Quarterly comparable store sales and earnings for the second quarter are expected to be released on or about August 21, 2008.
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