Maternity apparel retailer Mothers Work Inc. reported Tuesday that it quadrupled its profits for the third quarter, but forecast a fourth-quarter loss aggravated by restructuring costs and a new $7 million stock repurchasing plan.
Effective through July 2010, the repurchase program will give the company “excellent flexibility” at a time when it is also trying to reduce its debt, according to chief operating officer Edward M. Krell. In June, the company prepaid $8 million of its senior secured term loan, bringing to $13 million the amount prepaid since March.
For the three months ended July 29, the Philadelphia-based retailer posted net income of $4.1 million, or 68 cents a diluted share, versus year-ago profits of $1 million, or 17 cents. Sales declined 0.7 percent to $152.2 million from $153.2 million. After a 0.8 percent increase in June, same-store sales increased 2.4 percent. The company cited lower sales in Sears’ leased departments and the closure of underperforming stores as among the reasons for the decline in net sales.
Eliminating debt repurchase charges of 1 cent in the most recent quarter and 69 cents in the 2007 period, earnings per share declined to 69 cents from 90 cents. The company had projected EPS of between 66 and 70 cents for the most recent quarter.
“We are pleased with our strong sales performance for June and for the third quarter, despite the continued weak overall economic and retail environment, as we continue to anniversary weaker sales results from a year ago and define our merchandise assortments and our in-store merchandise presentation,” president and chief creative officer Rebecca Matthias said.
For the nine months, net income dropped 31.9 percent to $3.4 million, or 56 cents a diluted share, from $5 million, or 81 cents, in last year’s period. Excluding special charges for debt extinguishment, EPS dropped to 57 cents from $1.74. Sales dropped 2.6 percent to $434.1 million from $445.6 million. Same-store sales decreased 0.6 percent.
The company projected a net loss in the range of 30 to 46 cents a share for its fourth quarter, translating to a loss of 23 to 39 cents before debt repurchase and restructuring charges. The firm lost 92 cents a share in the fourth quarter of 2007. Net sales are expected to come in at between $130.5 million and $134.4 million.
Gross margin for fiscal 2008 is projected at approximately 50.3 percent of net sales, a decrease from the company’s 51.6 percent gross margin in fiscal 2007.
At the end of the quarter, the company operated 761 stores and 294 leased departments, down from 787 stores and 812 leased departments in the prior year. The company earlier this month decided to eliminate its Mimi Maternity store brand in favor of its Pea in the Pod and Destination Maternity nameplates.
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion
@longchamp, which marks its 70th anniversary this year, just opened its biggest U.S. store on Manhattan’s Fifth Avenue. On the lower level there’s a floor-to-ceiling display of the brand’s iconic Le Pliage bag – in all of its different colors, shapes and sizes. Customers can also have their product personalized in-store by imprinting names, initials or emblems. #wwdfashion (📷: @ericmtownsend)
“Whenever I’m in that place of sound and music, I don’t have fear or nervousness…This album has a lot of themes of courage and boldness and I want to be the soundtrack for people’s lives. I’ll be so happy if [my songs] evoke strength in people, which I know music has done for me,” says @kimbramusic of her newest album “Primal Heart.” The New Zealand-born singer sat down with WWD to talk about her music, newest tour and connecting with hear fans — read more on WWD.com #wwdeye (📷: @jilliansollazzo)
Luxury handbag resale company @rebagofficial is planning to sell a rare collectible for $70,000: the @hermes White Crocodile Himalayan Birkin. The exclusive Birkin sold for about $100,000 in 2008, when @davidbeckham bought one for his wife @victoriabeckham to add to her collection. Read more about the rare Birkin on WWD.com #wwdaccessories
With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)