Destination Maternity Reports Sales For February 2010
PHILADELPHIA, March 4 /PRNewswire-FirstCall/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today reported that net sales for the month of February 2010 decreased 1.4% to $42.1 million from $42.7 million reported for the month of February 2009. Comparable store sales for the month of February 2010 decreased 9.3% versus a February 2009 comparable store sales decrease of 3.5% on a reported basis, and a February 2009 comparable store sales increase of approximately 0.2% after adjusting for the extra day of sales in February 2008 due to the leap year. The decrease in total reported sales for February 2010 compared to February 2009 resulted primarily from the decrease in comparable store sales partially offset by increased sales from the Company's leased department relationships, including sales due to the re-launch of the exclusive Two Hearts® Maternity collection in Sears® and Kmart® stores in October 2009, increased Internet sales and increased international sales.
Ed Krell, Chief Executive Officer of Destination Maternity, noted, "Our sales for February were significantly hurt by the severe snowstorms which hit several regions of the U.S. during the month, as well as the significantly colder weather than last year throughout most of the U.S. which dampened demand for Spring merchandise. We believe our February sales results also reflect the negative effect of: (i) the continued difficult overall retail environment, and (ii) our relatively strong comparable store sales last February (up approximately 0.2% after adjusting for the 2008 leap year impact), especially compared to most apparel retailers. We are encouraged, however, by the significant improvement in our sales trend in the second half of February compared to the first half, even with a severe snowstorm hitting the northeast in the last week of the month. In spite of the overall weak sales results for February 2010, we are very pleased with the introduction of our two new exclusive maternity apparel lines with supermodel Heidi Klum, Lavish By Heidi Klum™ for A Pea in the Pod and Loved By Heidi Klum™ for Motherhood. Heidi joined us on February 11 to celebrate the launch of the new lines with more than a hundred expectant moms at Heidi Klum's Biggest Baby Shower at our Destination Maternity superstore on Madison Avenue in New York City, where both collections were successfully previewed. Early sales of the new apparel lines have been very encouraging and we are very excited by the future potential of our collaboration with Heidi."
"As we have indicated previously, although we are pleased with our continued progress in improving the profitability of our company, by no means are we satisfied or complacent, especially with regard to our sales performance, and we are keenly focused on initiatives to drive profitable sales growth, as evidenced by the launch of our new maternity apparel lines with Heidi Klum, the re-launch of our business with Sears, the expansion of our international business, and the increased focus on our Internet business."
During February 2010, the Company did not open or close any stores. As of the end of February 2010, the Company operates 711 stores, 978 leased department locations and 1,689 total retail locations, compared to 736 stores, 354 leased department locations and 1,090 total retail locations operated at the end of February 2009. The increase in leased department locations at the end of February 2010 versus the end of February 2009 predominantly reflects the opening of 623 Sears and Kmart leased department locations in connection with the October 2009 re-launch of the Two Hearts Maternity collection.
Impact of 2008 Leap Year on February 2009 Reported Comparable Store Sales
February 2009 reported comparable store sales were negatively impacted by having one less day than February 2008, which was a 29-day month due to the leap year. After adjusting for this leap year effect by comparing sales for the first 28 days of February for each year, comparable store sales for the month of February 2009 increased 0.2%.
Destination Maternity Corporation is the world's largest designer and retailer of maternity apparel, using its quick response replenishment system to "give the customer what she wants, when she wants it." In the United States and Canada, as of February 28, 2010, Destination Maternity operates 1,689 retail locations, including 711 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 entered into 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 net 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 impact of the current global economic slowdown on the retail industry in general and on apparel purchases in particular, our ability to successfully manage our various business initiatives, our ability to successfully implement our merchandise brand and retail nameplate restructuring, 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, 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, anticipated 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, goodwill impairment charges, 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, 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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