Destination Maternity Reports Preliminary Sales for May 2011

PHILADELPHIA, June 2, 2011 /PRNewswire/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today reported that preliminary net sales for the month of May decreased 5.3% to $49.4 million from $52.2 million reported for the month of May 2010.  Comparable retail sales data (which consists of comparable store sales and Internet sales) for the months of May 2011 and 2010 is included in the table below.

The decrease in total reported sales for May 2011 compared to May 2010 resulted primarily from: (1) the decrease in comparable retail sales, which was exacerbated by having one less Saturday in May 2011 compared to May 2010; (2) decreased sales from the Company's licensed wholesale relationship; and (3) decreased sales related to the Company's continued efforts to close underperforming stores, partially offset by increased sales due to the expansion of the Company's maternity apparel leased department relationship with Macy's®.

Ed Krell, Chief Executive Officer of Destination Maternity, noted, "Our sales performance for the month of May was lower than planned.  Our comparable retail sales for May decreased 3.6% after adjusting for the "days adjustment calendar shift."  We believe that some of this lower than planned comparable sales performance may well have been due to unfavorable weather, with a combination of cool and wet weather conditions, as well as severe storms and flooding in many regions of the United States during May, which hurt our overall sales and especially hurt our sales of seasonal Summer merchandise.  We also recognize the continued difficult economic environment for the consumer, although we continue to focus on the things that we can control, not on external factors that we cannot control.  Our key focus continues to be on turning around our sales performance through initiatives to continue to enhance our merchandise assortments, merchandise presentation and customer experience.  In addition, it is also important to note that our comparable retail sales results are negatively impacted by the cannibalization impact of our Macy's leased department expansion, which had its first full month of operation in March 2011.

"We are very excited that Chris Daniel has joined us this week as our President.  As we previously announced, Chris has significant experience leading women's fashion apparel brands and has had great experience in serving a niche customer demographic in a specialty retailing environment through his Torrid leadership position.  Chris brings to Destination Maternity a great skill set as a customer-focused retail executive with deep merchandising experience.  We are confident that Chris's talent, experience, creativity and energy will help us continue to drive improved sales performance through enhanced merchandise assortments, merchandise presentation and customer experience."

During May 2011, the Company did not open any stores and closed two stores.  As of the end of May 2011, the Company operates 663 stores, 1,698 leased department locations and 2,361 total retail locations, compared to 705 stores, 979 leased department locations and 1,684 total retail locations operated at the end of May 2010.  The increase in leased department locations at the end of May 2011 versus the end of May 2010 predominantly reflects the opening of 517 leased department locations during the second quarter of fiscal 2011 for our Macy's expansion, and the opening of an additional 217 Sears and Kmart leased department locations in September and October 2010.

Days Adjustment Calendar Shift

Destination Maternity reports sales on a calendar month basis, rather than on a "4-5-4 retail fiscal calendar" where each fiscal week and fiscal month starts on a Sunday and ends on a Saturday.  Thus, for each calendar month, there is typically a "days adjustment calendar shift" which may help or hurt reported calendar month sales, comparable retail sales and comparable store sales due to different days of the week typically contributing more sales than other days of the week.  For May 2011, there was one less Saturday and one more Tuesday compared to May 2010.  The Company estimates this calendar shift unfavorably impacted its reported comparable retail sales for May 2011 by approximately 3.3 percentage points.  For May 2010, there was one less Friday and one more Monday compared to May 2009.  The Company estimates this calendar shift unfavorably impacted its reported comparable retail sales for May 2010 by approximately 0.9 percentage points.

Destination Maternity Corporation is the world's largest designer and retailer of maternity apparel.  In the United States and Canada, as of May 31, 2011, Destination Maternity operates 2,361 retail locations, including 663 stores, predominantly under the tradenames Motherhood Maternity®, A Pea in the Pod®, and Destination Maternity®, and sells on the web through its DestinationMaternity.com and brand-specific websites.  Destination Maternity also distributes its Oh Baby by Motherhood® collection through a licensed arrangement at Kohl's® stores throughout the United States and on Kohls.com.  In addition, Destination Maternity is expanding internationally and has exclusive store franchise and product supply relationships in India and the Middle East.

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or made from time to time by management of the Company, including those regarding changes in management, net sales, comparable retail sales, comparable store sales, other results of operations, liquidity and financial condition, and various business initiatives, involve risks and uncertainties, and are subject to change based on various important factors.  The following factors, among others, in some cases have affected and in the future could affect the Company's financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any such forward-looking statements: the continuation of the economic recovery of the retail industry in general and of apparel purchases in particular, our ability to successfully manage our various business initiatives, the success of our international expansion, our ability to successfully manage and retain our leased department and licensed relationships and marketing partnerships, future sales trends in our existing store base and through the Internet, unusual weather patterns, changes in consumer spending patterns, raw material price increases, overall economic conditions and other factors affecting consumer confidence, demographics and other macroeconomic factors that may impact the level of spending for maternity apparel,  expense savings initiatives, our ability to anticipate and respond to fashion trends and consumer preferences, unanticipated fluctuations in our operating results, the impact of competition and fluctuations in the price, availability and quality of raw materials and contracted products, availability of suitable store locations, continued availability of capital and financing, our ability to hire and develop senior management and sales associates, our ability to develop and source merchandise, our ability to receive production from foreign sources on a timely basis, potential stock repurchases, potential debt prepayments, the continuation of the regular quarterly cash dividend, the trading liquidity of our common stock, changes in market interest rates, war or acts of terrorism and other factors set forth in the Company's periodic filings with the Securities and Exchange Commission, or in materials incorporated therein by reference.

SOURCE Destination Maternity Corporation

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