Maidenform Fourth-Quarter Net Falls

Innerwear maker Maidenform net falls, but beats analysts' projections.

Flagging sales, pared margins and restructuring charges helped shrink Maidenform Brands Inc.’s fourth-quarter earnings by almost 62 percent, but the innerwear maker’s adjusted results beat analysts’ predictions.

This story first appeared in the March 5, 2009 issue of WWD.  Subscribe Today.

The Iselin, N.J.-based firm said Wednesday that first-quarter and full-year earnings would match or top the Wall Street estimates. The better-than-expected performance and positive guidance helped to lift Maidenform shares 15 cents, or 1.8 percent, to $8.73.

For the period ended Jan. 3, profits tumbled 61.8 percent to $2.4 million, or 10 cents a diluted share, versus net income of $6.4 million, or 27 cents a share, in the year-ago quarter. Excluding restructuring charges and other items, adjusted earnings were 16 cents a share, 4 cents above analysts’ expectations..

Revenue slid 1 percent to $94.8 million from $95.8 million last year with wholesale revenue down 2 percent to $79.9 million, hurt by a 17.3 percent drop in international sales to $9.1 million. Sales to department stores and national chains dropped 7.9 percent to $46.6 million while revenue at mass merchants fell 2.8 percent to $21 million.

Retail net sales rose 3.5 percent to $14.8 million with comparable-store sales up 0.8 percent. Excluding the extra week in the most recent quarter, comps slid 9.6 percent on reduced traffic and economic instability.

Gross margin contracted to 34.7 percent of sales from 40.7 percent.

“We made a conscious decision to support our retail partners with promotional and markdown assistance as they became more aggressive in their pricing and inventories strategies,” Maurice Reznik, chief executive officer, said on the company earnings call. In order to offset this “pressure,” Reznik said the company relied on the strength of new launches and product diversification.

For the year, earnings dipped 27.7 percent to $24.7 million, or $1.05 a share, from $34.2 million, or $1.43 a share, a year ago. Adjusted profit was $1.16 a share, and annual sales fell 2 percent, to $413.5 million.