Maidenform Brands Inc. reduced its fourth-quarter and full-year earnings guidance on Thursday and said it would cut about 9 percent of its corporate workforce.
Maidenform said the layoffs affect 24 employees, who will get severances and outplacement assistance.
“The decision to eliminate positions is always a difficult one, but during these unprecedented economic times, we must take every action now to control those things that are within our power, including our overhead costs, inventories and execution against our strategic initiatives,” said Maurice Reznik, chief executive officer.
Including a fourth-quarter charge of 3 cents a share to cover the labor cuts and 8 cents in other charges, the company now expects to report full-year earnings in a range of $1.02 to $1.04 a diluted share, implying fourth-quarter earnings of 7 to 9 cents a diluted share. Previous guidance, furnished with the release of third-quarter results in November and excluding the 3-cent charge, was for EPS of $1.17 to $1.21.
Last year, the company earned $1.43 a share, excluding nonrecurring items.
Year-end sales, earlier expected to be flat to down 1 percent, are now projected to drop 2 percent to $413 million. The company said that its earlier estimates and gross margin rates “were impacted late in the fourth quarter of 2008 by overall weakening consumer demand and a greater emphasis by our customers to reduce inventories and increase promotional activity in the face of the global economic crisis and challenging market conditions.”
Maidenform said it ended the 2008 fiscal year with about $40 million of cash, net debt of $48 million and no material maturities until 2014.
Also on Thursday, Charming Shoppes Inc. said it would elminate 225 positions at its corporate support and brand headquarters offices, as well as some other jobs that are currently unfilled. The company expects to save $12 million in the next fiscal year and take a charge to cover the $2 million in associated costs during the current fourth quarter. The action is part of the firm’s previously announced restructuring and cost reduction program.