Destination Maternity Updates Q4 Earnings Outlook; Net Sales Down 0.2%

(RTTNews) - Destination Maternity Corp. (DEST), a maternity apparel retailer, announced the company expects to recognize a reduction of state income tax expense, net of federal expense, of approximately $0.09 per share, for the estimated recognition of tax benefits resulting from recently enacted changes in certain state income tax regulations. Thus, the company now expects earnings per share for its fourth quarter to be between $0.40 and $0.42 per share, exceeding the top end of its prior earnings guidance range of $0.32 to $0.38 per share, and exceeding last year's fourth quarter earnings of $0.39 per share, due to the expected state income tax benefit.

Analysts polled by Thomson Reuters expect the company to report fourth-quarter profit per share of $0.37. Analysts' estimates typically exclude special items.

The company reported that its fourth-quarter net sales decreased 0.2% to $128.3 million from $128.5 million last year. Comparable sale increased 1.4 percent on a reported basis, and rose 1.2 percent adjusted for calendar timing shift. Analysts expect the company to report fourth-quarter revenue of $129.65 million. Destination Maternity said the slight decrease in total reported sales resulted primarily from decreased sales related to the company's continued efforts to close underperforming stores, and decreased sales due to the closure of all of the company's remaining leased departments within Babies"R"Us stores during the month of October 2012, substantially offset by increased sales from the company's licensed relationship and the increase in comparable sales.

The company expects its earnings per share for the full year to be between $1.76 and $1.78 per share, including the expected recognition of a state income tax benefit of approximately $0.09 per share in the fourth quarter of fiscal 2013. Analysts expect the company to report fiscal year profit per share of $1.72.

Net sales for the fiscal year ended September 30, 2013 decreased 0.2% to $540.3 million from $541.5 million prior year. Comparable sales increased 2.6 percent on a reported basis, and rose 3.2 percent adjusted for calendar timing shift. Analysts expect the company to report fiscal year revenue of $541.65 million.