Destination Maternity Q2 Comps, Net Sales Down; Cuts Q2 Profit View

(RTTNews) - Destination Maternity Corp. (DEST) said that comparable sales for the second quarter of fiscal 2014 declined 5.1%, compared to an increase of 1.6% in the second quarter of fiscal 2013. Adjusted for calendar timing shift, comparable sales for quarter dropped 5.6%, compared to an increase of 2.4% in the same quarter last year.

Net sales for the second quarter slipped 6.5% to $126.1 million from last year's $134.9 million, primarily due to decrease in comparable sales and decreased sales related to the Company's continued efforts to close underperforming stores.

Ed Krell, Chief Executive Officer of Destination Maternity, said, "Our sales for the second quarter of fiscal 2014 were considerably weaker than planned. We believe the primary driver of this sales weakness was the adverse weather conditions across much of the United States during the quarter, which included significantly colder than normal temperatures and much more inclement weather than normal, with numerous periods of snow and icy conditions which suppressed store traffic for us and many retailers in many regions of the United States….We believe that our weaker than planned sales results also reflect the continued challenging overall economic environment which has affected many retailers in recent months."

The company said its sales for the quarter were well below the low end of its previously expected sales range and, as a result of this sales shortfall, the company expects its earnings for the second quarter to be between $0.23 and $0.24 per share, which is below the low end of its prior earnings guidance range of $0.35 to $0.40 per share, and significantly lower than its second quarter fiscal 2013 earnings of $0.44 per share.

The company's second quarter fiscal 2014 earnings per share are expected to include approximately $0.02 per share of other charges related to the previously announced relocation of our headquarters and distribution facilities.

Excluding the other charges, its adjusted earnings for the second quarter are expected to be between $0.25 and $0.26 per share, compared to its previous guidance of adjusted earnings between $0.37 and $0.42 per share.