PHILADELPHIA, Jan. 10 /PRNewswire-FirstCall/ -- Mothers Work, Inc.
(Nasdaq: MWRK), the world's leading maternity apparel retailer, today
announced that net sales for the month of December 2007 decreased 9.6% to
$50.3 million from $55.6 million reported for the month of December 2006.
The decrease in sales versus last year resulted primarily from a decrease
in comparable store sales as well as, to a much lesser extent, a decrease
in sales from the Company's licensed arrangement due to a shift in timing
compared to last year. Comparable store sales for December 2007 decreased
7.6% (based on 1,417 locations) versus a comparable store sales decrease of
0.3% (based on 1,468 locations) for December 2006. The comparable store
sales decrease of 7.6% for December 2007 was unfavorably impacted by
approximately 1 percentage point due to having four Fridays in December
2007 compared to five Fridays in December 2006. During December 2007, the
Company opened one store and closed five stores, including two store
closings related to multi-brand store openings. During December 2007, the
Company also closed 21 leased department locations within Sears stores,
pursuant to mutual agreement with Sears. As of December 31, 2007, the
Company operates 478 leased departments within Sears stores and, as we
disclosed in September 2007, our relationship with Sears will end on June
20, 2008, resulting in the closure of our leased departments within Sears
stores. As of the end of December 2007, the Company operates 772 stores,
772 leased department locations and 1,544 total retail locations, compared
to 807 stores, 787 leased department locations and 1,594 total retail
locations operated at the end of December 2006.
Net sales decreased 3.8% to $142.9 million for the first quarter of
fiscal 2008 ended December 31, 2007, from $148.5 million for the same
period of the preceding year. The decrease in sales versus last year
resulted primarily from a decrease in comparable store sales. Comparable
store sales decreased 4.1% during the first quarter of fiscal 2008 (based
on 1,352 locations) versus a comparable store sales decrease of 2.1% during
the first quarter of fiscal 2007 (based on 1,454 locations). For the
quarter ended December 31, 2007, the Company opened seven stores, including
two new multi-brand stores, which included the Company's 15th Destination
Maternity(R) superstore, and closed 16 stores, including eight store
closings related to multi-brand store openings.
Rebecca Matthias, President, Chief Creative Officer and Acting Chief
Merchandising Officer of Mothers Work, noted, "Our sales for the month of
December were significantly weaker than planned, although we did see a
significant improvement in our sales trend late in the month and continuing
into January 2008. Our sales for the month of December continued to reflect
a difficult overall economic and retail environment, as well as some
negative impact from the popularity of certain styles in the non-maternity
women's apparel market which can more readily fit a pregnant woman early in
her pregnancy than typical non-maternity fashions. As a result of our
weaker than expected sales trend, our sales for the first quarter of $142.9
million were lower than our guidance range of $144 million to $147 million
provided in our November 20, 2007 press release, with our comparable store
sales decrease of 4.1% for the quarter falling short of our guidance range
for comparable store sales of between down 2.0% and flat for the first
quarter. The weak sales trend we have seen in recent months has also
resulted in us taking some increased markdowns to help manage our inventory
level, which has resulted in somewhat lower than planned gross margins. Our
gross margins were also hurt due to spreading fixed product overhead costs
over a smaller than planned sales volume. With our lower than planned sales
and gross margins for the quarter, we project that our first quarter
diluted earnings per share, will be a loss of between $(0.04) and $(0.08)
per share, below our guidance for diluted earnings per common share of
between $0.11 per share and $0.25 per share.
"Looking forward, we continue to feel very good about our product
lines, our inventory position and our overall business; however, we
recognize that we continue to be faced with a weak overall economic and
retail environment and are still seeing some negative impact from the more
pregnancy-friendly fit of certain non-maternity fashion trends. We continue
to focus on developing great maternity product under each of our brands and
we continue to focus on improving our sales and profitability performance,
including continuing to roll out our multi-brand stores.
"We will report results for our first quarter and hold an investor
conference call on January 24, 2008, at which time we will provide
additional information related to our results for the first quarter and our
future financial guidance."
Mothers Work is the world's largest designer and retailer of maternity
apparel, using its custom TrendTrack(TM) merchandise analysis and planning
system as well as its quick response replenishment process to "give the
customer what she wants, when she wants it." As of December 31, 2007,
Mothers Work operates 1,544 maternity locations, including 772 stores,
predominantly under the trade names Motherhood Maternity(R), A Pea in the
Pod(R), Mimi Maternity(R), and Destination Maternity(R), and sells on the
web through its DestinationMaternity.com and brand-specific websites. In
addition, Mothers Work distributes its Oh Baby by Motherhood(TM) collection
through a licensed arrangement at Kohl's(R) stores throughout the United
States and on Kohls.com.
The Company cautions that any forward-looking statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995)
contained in this press release or made from time to time by management of
the Company, including those regarding expected results of operations,
liquidity and financial condition and various business initiatives, involve
risks and uncertainties, and are subject to change based on various
important factors. The following factors, among others, in some cases have
affected and in the future could affect the Company's financial performance
and actual results and could cause actual results to differ materially from
those expressed or implied in any such forward-looking statements: our
ability to successfully manage our various business initiatives, our
ability to successfully manage and retain our leased department and
licensed relationships and marketing partnerships, future sales trends in
our existing store base, weather, changes in consumer spending patterns,
raw material price increases, consumer preferences and overall economic
conditions, the impact of competition and pricing, availability of suitable
store locations, continued availability of capital and financing, ability
to hire and develop senior management and sales associates, ability to
develop and source merchandise, ability to receive production from foreign
sources on a timely basis, potential stock repurchases, potential debt
prepayments, changes in market interest rates, war or acts of terrorism,
and other factors set forth in the Company's periodic filings with the
Securities and Exchange Commission, or in materials incorporated therein by
reference.
Mothers Work press releases available through Company News On-Call at
http://www.prnewswire.com/comp/581877.html
SOURCE Mothers Work, Inc.
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Related links:
http://www.motherswork.com
http://www.prnewswire.com/comp/581877.html /
CONTACT:
Edward M. Krell, Chief Operating Officer &
Chief Financial Officer of Mothers Work, Inc., +1-215-873-2220
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