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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast