NEW YORK — New store openings weren’t enough to counteract the effects of increasing competition for Mothers Work Inc. during the third quarter.

For the three months ended June 30, the Philadelphia-based maternity retailer saw earnings regress 16.5 percent to $7 million, or $1.28 a diluted share, compared with earnings of $8.4 million, or $1.50, in the year-ago period.

Sales increased 5.4 percent to $139.6 million from $132.4 million, buoyed by the fact that the company had 1,109 retail locations in operation at quarter’s end, compared with 972 last year. However, comparable-store sales declined 5 percent.

“We currently face maternity competition in over 1,000 more competitor locations than a year ago,” said Rebecca Matthias, president and chief operating officer, in a statement. The result, said Matthias, was an excess of spring maternity offerings in the market. June sales were “particularly weak,” said Matthias, as competitors marked down spring inventory.

Sales in July have improved, said Matthias, but management still expects to post a comp decline of between 1 and 2 percent.

Earnings took a more precipitous fall for the nine-month period, sinking 22.9 percent to $49.5 million, or $1.72 a share, compared with earnings of $12.3 million, or $2.18, in the same period a year ago.

Sales rose 7.3 percent to $397.1 million from $370 million. Again, comps tracked down 3.6 percent.

— Ross Tucker

This story first appeared in the July 28, 2004 issue of WWD. Subscribe Today.