Maidenform Brands Q1 sales fall 16.7%

Total retail segment net sales decreased $0.2 million, or 1.6%, to $12.5 million.  Same store sales, defined as outlet stores that have been open for more than one year, increased 4.3%.  Internet sales decreased $0.2 million, or 8.7%, to $2.1 million for the first quarter of 2013, resulting from lower promotional activity when compared to the prior year.  The retail segment operated 69 outlet stores as of the end of first quarter 2013 and 75 outlet stores as of the end of first quarter 2012.  

Consolidated gross profit decreased $12.3 million, or 28.7%, to $30.6 million for the first quarter of 2013.  As a percentage of net sales, consolidated gross margins were 23.3% for the first quarter of 2013 versus 27.2% for the first quarter of 2012, driven by higher liquidation sales and negative product mix on higher sales in the panties category with declines in the higher margin shapewear and bra categories for the reasons mentioned above.            

Consolidated selling, general and administrative expenses (SG&A) decreased $0.6 million, or 1.8%, to $32.5 million for the first quarter of 2013.  This decrease is a result of the Company managing its expenses along with decreased payroll and related benefits, including lower incentive compensation, and a reduction in variable store operating expenses as the Company executed the planned store closings in the first quarter of 2013. 

During the first quarter, the Company recognized a lower benefit from foreign currency exchange when compared to the same quarter of 2012, which partially offset these expense decreases.  As a percentage of net sales, SG&A increased to 24.7% for the first quarter of 2013 compared to 21.0% for the first quarter of 2012.

Due to all the factors described above, operating loss for the first quarter of 2013 was $(1.9) million, or 1.4% of net sales, compared to operating income of $9.8 million, or 6.2% of net sales, for the first quarter of 2012.

Net interest expense for the first quarter of 2013 was unchanged at $0.3 million.

The Company recorded an income tax benefit of $0.9 million and income tax expense of $3.7 million for the three months ended March 30, 2013 and March 31, 2012, respectively.  The Company's effective income tax rate for the first quarter of 2013 was 43.0% compared to 39.0% for the first quarter of 2012.       

Net (loss) income for the first quarter of 2013 and 2012 was $(1.2) million and $5.8 million, respectively, and EPS for the same periods was a loss per share of $(0.05) and earnings of $0.25, respectively.           

Total cash and cash equivalents as of March 30, 2013 were $47.0 million compared to $29.8 million as of March 31, 2012.  The Company's outstanding debt was $67.7 million as of March 30, 2013 versus $68.8 million as of March 31, 2012.       

Maidenform Brands