Shares of Maidenform Brands Inc. fell more than 6 percent Wednesday after the intimate apparel firm said weakness at department stores and changes in delivery schedules cut into second-quarter earnings and sales and reduced its projections for the year.
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Second-quarter earnings declined 17.7 percent to $7.8 million, or 33 cents a diluted share, from $9.5 million, or 39 cents, a year ago.
Revenue for the three months ended June 28 slid 9.2 percent to $108.1 million from $119 million.
“More than half of the [sales] decline is related to the timing of new pipeline shipments to department and chain stores,” Maurice Reznik, chief executive officer, said on a conference call with Wall Street analysts. Reznik took over last month from Thomas J. Ward, who is now chairman.
Sales to department stores, which are shifting orders in an apparent effort to control inventory, dropped 15.8 percent to $57.4 million, although the firm registered increased sales to mass merchants and international clients and through its own stores.
“Our expectations are that the spring economic conditions will continue into the fall,” Reznik said.
For the full year, the intimate apparel firm reduced earnings projections to $1.28 to $1.36 a share. Previously, Maidenform was looking for earnings of about $1.46. Both estimates exclude start-up costs of 6 cents a share related to the new Donna Karan and DKNY global license for intimate apparel. Maidenform expects the license will add about 5 percent to its sales next year and provide a foothold in the high-end market.
“The Donna Karan rollout has the potential to be a key game changer in 2009 and beyond in terms of diversifying the company,” Eric Beder, analyst for Brean Murray Carret & Co. LLC, said in a research note. “The company has continued to be a key innovator in the intimate apparel space and, in normal times, would be driving appealing top- and bottom-line growth. It is crystal clear that we are not in ordinary times.”
First-half earnings dropped 31 percent to $13.8 million, or 59 cents a diluted share, as sales decreased 9 percent to $206.2 million.
Maidenform shares ended Wednesday’s New York Stock Exchange session at $13.60, down 91 cents or 6.3 percent.