Shares of Destination Maternity Corp. dropped 9.5 percent to $17 Wednesday as the retailer cut its full-year guidance and offered weak sales and earnings guidance for the current quarter.
Still, the maternity apparel retailer saidthird-quarter earnings rose 9.2 percent which met Wall Street’s estimates.
For the period ended June 30, the Philadelphia-based company said net income reached $9.5 million, or 72 cents a diluted share, compared with year-ago income of $8.7 million, or 67 cents a share. Excluding restructuring and other charges, earnings totaled 75 cents a share.
Net sales for the quarter increased 3.3 percent, to $146.7 million from $142 million in 2010.
Analysts surveyed by Yahoo expected earnings per share of 72 cents on sales of $146.7 million.
Comparable retail sales fell 1.6 percent, and an increase in promotions caused gross margin to fall to 55.2 percent of sales from 56.1 percent, a year earlier.
“We recognize the continued difficult overall economic environment for the consumer, especially the moderate-priced consumer, although we remain focused on the things that we can control, not on external factors that we cannot control,” said chief executive officer Ed Krell. “Our key focus continues to be on turning around our sales performance through initiatives to enhance our merchandise assortments, merchandise presentation and customer experience.”
For the nine months, profit rose 61.9 percent to $20.3 million, or $1.55 a share, compared with $12.5 million, or 99 cents a share, a year earlier.
Sales edged up 2.2 percent to $416 million from $406.9 million.
For the fourth quarter, the firm estimated adjusted earnings of 21 to 31 cents, well below analysts’ expectations of 36 cents a share. The company also lowered its annual guidance to between $1.85 and $1.95 a share, versus a prior forecast of $2.03 to $2.22.
Analysts had been looking for full-year EPS of $1.93.