NEW YORK — Maternity specialty retailer Mothers Work Inc. on Tuesday reported expansion of both sales and profits as it raised its earnings estimate for the current year.

The Philadelphia-based maternity retailer and operator of Motherhood Maternity, A Pea in the Pod and Mimi Maternity said profits for the first quarter ended Dec. 31 jumped 42.5 percent to $3.6 million, or 63 cents a diluted share, from $2.5 million, or 46 cents a share, a year earlier. The earnings per share number was 6 cents above analysts’ forecasts. Sales for the quarter rose 10.5 percent to $126.3 over year-ago sales of $114.4 million. On a comparable-store sales basis, sales rose 5.1 percent.

MW also said it increased its 2003 EPS target to between $2.60 and $2.70 from its previous estimate of $2.56 to $2.61 a share. Net sales are now pegged to reach $498 million to $503 million, based on its plan to open roughly 100 new stores and its current calculations of a 2.5 to 3.5 percent comp increase in the current second quarter.

In a phone interview, Rebecca Matthias, president and chief operating officer, attributed part of MW’s success to the nondiscretionary nature of its customers’ purchases. "When you are pregnant, it is like your house burned down and you have nothing to wear in your closet. You have to go out and buy something, which gives our market a different kind of stability," she said.

Mothers Work has 4 million customers and that number is expected to grow as the number of births per year has increased about 1 percent, according to Matthias. "As long as we have 4 million customers and they keep growing out of their pants, we have stability in our market," Matthias said. "That is why we had a good Christmas when others did not."

Despite dropping $2.88, or 8.4 percent, to close at $31.55 in Nasdaq trading Tuesday, on heavy volume, MW’s stock performance has behaved much like its profits and its customers’ waistlines. Shares are down 26.6 percent from their 52-week high of $43, reached last Nov. 7, but nearly three times the low for the year of $10.75 reached Jan. 24. MW topped the list of 100 companies ranked by Bloomberg Personal Finance magazine’s "Bloomberg 100," an annual survey of the year’s best-performing stocks for the period Nov. 2, 2001 to Nov. 1, 2002.Retail shares struggled Tuesday as the Standard & Poor’s Retail index dropped 2.5 percent.

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