Destination Maternity Reports Sales for January 2010
PHILADELPHIA, Feb. 4 /PRNewswire-FirstCall/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today reported that net sales for the month of January 2010 decreased 1.1% to $38.4 million from $38.8 million reported for the month of January 2009. Comparable store sales for the month of January 2010 decreased 8.1% on a reported basis, and decreased approximately 8.6% after adjusting for the "days adjustment calendar timing shift." For January 2009, the Company's comparable store sales increased 5.1% on a reported basis, and increased approximately 1.1% after adjusting for the calendar shift. The decrease in total reported sales for January 2010 compared to January 2009 resulted primarily from the decrease in comparable store sales partially offset by increased sales from the Company's leased department and licensed relationships, including sales due to the re-launch of the exclusive Two Hearts® Maternity collection in Sears® and Kmart® stores in October 2009, and increased Internet sales.
Ed Krell, Chief Executive Officer of Destination Maternity, noted, "Our January sales results were in line with our revised outlook, although weaker than originally planned, reflecting: (i) the continued difficult overall retail environment; (ii) reduced levels of deeply marked down inventory compared to a year ago; and (iii) our relatively strong comparable store sales last January (up approximately 1% on a days-adjusted basis), especially compared to most apparel retailers. Our comparable store sales decrease of 8.1% for the month of January was consistent with our guidance range for a January comparable store sales decrease of between 6% and 9% that we provided in our January 28, 2010 press release. It is important to note, though, that with our much cleaner inventory position versus a year ago, our merchandise gross margin this January was significantly higher than last January."
"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 upcoming launch on February 12 of our two new exclusive maternity apparel lines with supermodel 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 January 2010, the Company opened four stores, all of which were multi-brand stores, including the Company's 24th Destination Maternity Superstore, and closed 14 stores, including 10 store closings related to multi-brand store openings. As of the end of January 2010, the Company operates 711 stores, 979 leased department locations and 1,690 total retail locations, compared to 739 stores, 334 leased department locations and 1,073 total retail locations operated at the end of January 2009. The increase in leased department locations at the end of January 2010 versus the end of January 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.
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 a "days adjustment calendar shift" which may help or hurt reported calendar month sales and comparable store sales due to different days of the week typically contributing more sales than other days of the week. For January 2010, there was one more Sunday and one less Thursday compared to January 2009. The Company estimates this calendar shift favorably impacted its reported comparable store sales for January 2010 by approximately 0.5 percentage points. The comparable store sales increase of 5.1% for January 2009 was favorably impacted by approximately 4 percentage points due to having one more Friday and Saturday and one less Tuesday and Wednesday in January 2009 compared to January 2008.
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, Destination Maternity operates, as of January 31, 2010, 1,690 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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