Byline: Jennifer Weitzman

NEW YORK — Mothers Work, the maternity apparel retailer, reported its net income dropped 43.6 percent in the first quarter.
The Philadelphia-based company said net income for the quarter ended Dec. 31 was $1.4 million, or 28 cents a share. That compares with earnings of $2.4 million, or 57 cents, in the year-ago period. A change in its manufacturing cost accounting methods pulled earnings down 24 cents a share in the just-concluded quarter. The company revised earnings expectations downward, to a range of 25 to 31 cents, on Jan. 12.
Net sales increased 11.8 percent to $102.7 million from $91.9 million. Same-store sales rose 1.5 percent. The company opened 43 locations and closed one during the quarter, and operated 97 more stores at the end of the quarter than it did a year ago.
Rebecca Matthias, president and chief operating officer, said in a statement, “Disappointing sales in December contributed to a shortfall in earnings for the quarter.” Looking ahead, Matthias said as a result of efficiency improvements, including reducing costs to manufacture, handle and distribute goods, should have a positive impact on margins going forward. She also noted the company has made progress in its inventory reduction program, decreasing inventory by $6.4 million and paying down $10 million in debt.
“We are currently focusing our efforts on store selling, general and administrative expenses and acquired costs of goods,” she said. “These two areas of our business are the most important to us in converting sales into earnings.”
The company confirmed an earlier report that Laurie Cox, a former employee, had filed a $52 million federal lawsuit in the U.S. District Court in Baltimore, alleging the national chain discriminated against her after she got pregnant. “The suit has been served and Mothers Work believes it to be without merit and believes it will be successfully defended,” Sheryl Rogers, vice president of marketing, said.

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