News Flash

New York & Co achieves positive comp store sales growth of 3.6%

19 Nov '10

5 min read

• The Company ended the quarter with $22 million of cash-on-hand and less than $10 million of borrowings outstanding on its $90 million revolving credit facility.
• Inventory was down approximately 4% versus the prior year's levels as the Company continues to manage its inventory conservatively.

For the nine months ended October 30, 2010, net sales were $718.5 million, as compared to $708.6 million for the nine months ended October 31, 2009. Comparable store sales increased 1.5% for the nine months ended October 30, 2010, as compared to a 13.5% decrease in the prior year period. Net loss from continuing operations for the nine months ended October 30, 2010 was $91.5 million, or $1.54 per diluted share.

Included in the results for the nine months ended October 30, 2010 was a loss of $0.93 per diluted share related to non-operating adjustments recorded during the second and third quarters. As previously disclosed, the non-cash items recorded during the second quarter included $2.1 million of restructuring charges related to the exiting of an underperforming test accessories concept, a $15.7 million charge related primarily to the impairment of store assets, and $48.5 million of tax-related charges including a $48.0 million valuation allowance against the Company's deferred tax assets.

Outlook

Regarding its expectations for the fourth quarter of fiscal year 2010, the Company provided the following:

• Comparable store sales for the fourth quarter of fiscal year 2010 are expected to be approximately flat versus the year-ago period.
• Gross profit as a percentage of net sales for the fourth quarter of fiscal year 2010 is expected to increase slightly versus the prior year's levels, with merchandise margins projected to be in-line with the prior year's level.
• Selling, general and administrative expenses for the fourth quarter of fiscal year 2010 are expected to increase slightly as compared to the prior year.
• As previously anticipated, the effective tax rate for the fourth quarter of fiscal year 2010 is expected to be 0% as future tax provisions or benefits will be offset by adjustments to the deferred tax valuation allowance.
• The Company expects inventory at the end of the fourth quarter of fiscal year 2010 to be approximately flat versus the same period in the prior year.
• While the Company expects to utilize its credit facility for certain seasonal working capital needs, it expects to end the year with no borrowings under its credit facility.
• Capital expenditures for the fourth quarter of fiscal year 2010 are expected to range between $2.5 million and $3.5 million, as compared to $4.4 million in the same period of the prior year. During the fourth quarter, the Company plans to open one new store and close 20 to 28 stores, ending the year with approximately 552 to 560 stores.

New York & Company Inc

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