New York & Company posted net earnings of $3.09 million in the first quarter ended May 5, compared to a loss of $4.3 million a year ago, beating or coming in at the high end of guidance across several metrics.
The specialty retailer’s operating profit came in at $4.3 million versus guidance of $2 million to $3 million. In last year’s quarter, there was an operating loss of $2.3 million.
Earnings before interest, taxes, depreciation and amortization came in at $9 million, at the high end of the $8 million to $9 million in guidance. Profits were the highest the company has seen in a decade for the first quarter. And it was the first time comp growth was seen in clicks and bricks since 2011.
Net sales were $218.8 million, compared to $209.9 million in the prior year. The increase in net sales reflects the combined effect of the shift of the calendar due to the 53rd week in 2017, increased sales from Fashion to Figure (the plus-size specialty chain purchased last year) and growth in e-commerce sales, partially offset by a reduced store count.
Comparable sales increased 2.7 percent, as compared to the same period last year, driven by increases in brick-and-mortar store sales and sales from e-commerce.
The company plans to invest to grow Fashion to Figure, further e-commerce and introduce additional celebrity products. In the fall, a new celebrity for the company’s SoHo Jeans subbrand will be revealed. Celebrity products, which include Eva Mendes and Gabrielle Union, account for nearly 10 percent of the retailer’s total business, and grew by double digits during the first quarter, officials said. The company “reintroduced” Fashion to Figure in February, operating eight locations and launching the brand on e-commerce. The e-commerce business accounts for 31 percent of total sales, which is very high for a women’s specialty retailer.
“As we entered the second quarter, we are continuing to see positive momentum. What we really have seen since week three and week four in April are shorts and Ts really started to pick up,” Gregory Scott, chief executive officer, told WWD.
The Eve Mendes celebrity collection is “doing amazing for summer — really beating our expectations,” Scott added during the interview.
“The other thing that’s been really strong is the whole pant business. There are so many shapes and new proportions and new silhouettes.” New York & Co.’s Seventh Avenue subbrand is “really focused on modern suiting, jackets, related separates. Fashion suiting really seems to be coming back.”
According to Scott, the exclusive celebrity brand offerings differentiate New York & Co. from peers and resonate well with customers. “Our partnerships with Eva Mendes and Gabrielle Union continue to be a cornerstone of our future strategy, and their strong support of the partnership was integral to our strong results in the quarter,” he said in a statement.
The chain, which posted just under $1 billion in total sales last year, increased its spring operating income guidance from $1.2 million to $5 million to $6 million, excluding the impact of non-operating charges of $1 million primarily related to severance resulting from the recently completed corporate office streamlining in support functions, as compared to the prior year operating income of $1.2 million.
Net sales for the spring season are expected to be up slightly, reflecting growth in e-commerce and the addition of Fashion to Figure, partially offset by a reduced store count. Comparable-store sales are expected to increase in the low single-digit percentage range for spring.
As reported by WWD, the company has been testing a subscription box service, and plans to grow it.