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Destination Maternity operating loss is $9.6 mn for FY2018

18
Apr '19
Pic: Destination Maternity
Pic: Destination Maternity
Destination Maternity, the world’s leading maternity apparel retailer, has reported operating loss of $9.6 million for fiscal 2018 ending February 2, 2019, versus an operating loss of $16 million in fiscal 2017 ending February 3, 2018. The operating loss for Q4 of FY2018 was $5.4 million compared to an operating loss of $7.8 million in Q4 of FY2017.

Net loss for Q4 of fiscal 2018 was $6.4 million, or $0.46 per share (diluted), compared to a net loss of $10.2 million, or $0.73 per share (diluted), for Q4 of fiscal 2017. Net loss for fiscal 2018 was $14.3 million, or $1.03 per share (diluted), compared to a net loss of $21.6 million, or $1.57 per share (diluted), for fiscal 2017, said the company in a media statement.

Net sales for Q4 of fiscal 2018 decreased 13.1 per cent to $91.3 million from $105.1 million for Q4 of fiscal 2017. Sales were negatively impacted by the net closure of 29 owned locations and 83 leased lease locations, a decrease in comparable sales, and the 53rd week in fiscal 2017. Net sales for fiscal 2018 decreased 5.5 per cent to $383.8 million from $406.2 million for fiscal 2017.

Comparable retail sales for fiscal 2018 decline 1.8 per cent versus 2017.

Selling, general and administrative (SG&A) expenses for fiscal 2018 decreased 9.3 per cent to $198.3 million from $218.7 million in the comparable prior year. As a percentage of net sales, SG&A decreased 210 basis points to 51.7 per cent from 53.8 per cent for fiscal 2017. Fiscal 2017 included an additional week of expense related to the 53rd week.

“Several factors represented significant headwinds for our business in the fourth quarter,” said Marla Ryan, chief executive officer of Destination Maternity. “Challenging conversion results on our ecommerce sites and in store drove a 5.8 per cent comparable sales decline and our promotional cadence and more aggressive approach to rightsizing inventory negatively impacted margins. We were diligent in tightly managing our expenses, which mostly offset the impact on profitability, but know that we need to do better.”

For FY2019, the company expects the total sales to be in the range of $370.0 million to $380.0 and comparable retail sales to be in the range of down (1.0) per cent to up 1.0 per cent.

“As we look to the balance of the year, we are actively taking measures to ensure we execute against our long-term strategic plan, Destination -> Forward. There is much to do to deliver satisfactory results and the scope of the changes we are making are causing our transition to a more nimble and profitable organisation to take longer than previously anticipated. As a result of this and the headwinds impacting the business in the quarter, we are updating our Full Year 2019 guidance to reflect reductions in sales and profitability for the year,” said Ryan. “We remain committed to optimising our infrastructure, creating a more efficient organization and developing innovative products and solutions for our new moms and moms2be. We are confident that what we are doing will generate long-term shareholder value.” (PC)

Fibre2Fashion News Desk – India


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