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Difficulties in Europe and the U.S. prompted Maidenform Brands Inc. to lower its outlook for the year, sending the firm’s stock lower.
“Continued weakness in Europe and a choppy domestic market are placing downward pressure on our outlook, however we continue to execute well against our strategies and we are excited about our upcoming new product launches and branding initiatives,” said Maurice Reznik, chief executive officer.
The firm projected earnings per share of $1.50 to $1.60 versus the $1.75 to $1.85 forecast in May. The stock was down 7.2 percent to $20.74 in midday trading.
The intimate apparel firm also reported second-quarter results that showed declines, but were stronger than expected.
Net income fell 1.6 percent to $11.4 million, or 49 cents a diluted share, from $11.6 million, or 50 cents a year earlier, when results were reduced by 17 cents per share by a litigation settlement. Earnings in the most-recent quarter were 1 cent ahead of the 48 cents analysts expected. Sales for the three months ended June 30 declined 7.4 percent to $157.5 million from $170 million. Sales to department stores and national chains rose 1 percent to $70.4 million.
Maidenform appears to be gaining business at Kohl’s Corp. and losing, for now, at J.C. Penney Co. Inc. The company said it “shipped the Jennifer Lopez brand for the first time to a chain store customer which was partially offset by sales declines at a mid-tier department store as it transitions to a new pricing and merchandising strategy.”
The trend at Penney’s, which is revamping its strategy under ceo Ron Johnson, might shift as Maidenform’s inked an agreement to build shops at the chain next year.