PHILADELPHIA, April 10 /PRNewswire-FirstCall/ -- Mothers Work, Inc.
(Nasdaq: MWRK), the world's leading maternity apparel retailer, today
announced that net sales for the month of March 2008 decreased 7.6% to
$54.6 million from $59.1 million reported for the month of March 2007. The
decrease in sales versus last year resulted primarily from a decrease in
comparable store sales and, to a lesser extent, reduced sales volume from
the ongoing closure of certain underperforming stores. Comparable store
sales for March 2008 decreased 6.0% (based on 1,465 locations) versus a
comparable store sales increase of 3.6% (based on 1,419 locations) for
March 2007. The comparable store sales decrease of 6.0% for March 2008 was
favorably impacted by approximately 1 to 2 percentage points due to the
earlier timing of Easter compared to last year (March 23, 2008 compared to
April 8, 2007). The comparable store sales increase of 3.6% for March 2007
was favorably impacted by approximately 4 to 5 percentage points due to
having five Saturdays in March 2007 compared to four Saturdays in March
2006, as well as the somewhat earlier timing of Easter in 2007 compared to
2006 (April 8, 2007 compared to April 16, 2006). During March 2008, the
Company opened two stores and closed two stores. As of the end of March
2008, the Company operates 766 stores, 771 leased department locations and
1,537 total retail locations, compared to 795 stores, 821 leased department
locations and 1,616 total retail locations operated at the end of March
2007.
Net sales decreased 3.4% to $139.0 million for the second quarter of
fiscal 2008 ended March 31, 2008, from $143.9 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 and, to a lesser
extent, reduced sales volume from the ongoing closure of certain
underperforming stores and decreased sales from the Company's leased
department and licensed relationships. Comparable store sales decreased
1.7% during the second quarter of fiscal 2008 (based on 1,394 locations)
versus a comparable store sales decrease of 1.6% during the second quarter
of fiscal 2007 (based on 1,412 locations). The comparable store sales
decrease of 1.7% for the second quarter of fiscal 2008 was favorably
impacted by approximately 1 to 2 percentage points due to having an extra
day in February 2008 compared to February 2007 and, to a lesser extent, the
earlier timing of Easter. The comparable store sales decrease of 1.6% for
the second quarter of fiscal 2007 was favorably impacted by approximately 1
percentage point due to having one more Saturday in the second quarter of
fiscal 2007 compared to the second quarter of fiscal 2006. For the quarter
ended March 31, 2008, the Company opened 10 stores and closed 16 stores,
including one store closing related to a multi-brand store opening.
Rebecca Matthias, President and Chief Creative Officer of Mothers Work,
noted, "After having seen a nice improvement in our sales trend in January
and February, we saw much weaker than planned sales in March, driven by
much weaker than planned sales of Spring merchandise. We attribute our
weaker than planned sales for March to: (1) the extremely weak overall
economic and retail environment, (2) unseasonably cold weather in March
throughout many regions of the United States, especially compared to the
more Spring-like weather of last March, which hurt sales of Spring
merchandise, and (3) to a lesser extent, some negative impact from the more
pregnancy-friendly fit of certain non- maternity fashion trends, such as
trapeze and baby-doll dresses and tops. Importantly, though, we believe
this fashion trend is diminishing in importance and prevalence in the
Spring 2008 selling season compared to a year ago, and we believe it will
continue to diminish, but we believe it is still having some residual
negative impact on sales. As a result of our much weaker than planned sales
for March, our sales for the second quarter of $139.0 million were lower
than our guidance range of $142 million to $146 million provided in our
January 24, 2008 press release, with our comparable store sales decrease of
1.7% for the quarter falling short of our guidance range for a comparable
store sales increase of 1.0% to 3.5% for the second quarter. The weak sales
trend we have seen has also resulted in us taking increased markdowns to
help manage our inventory level, which has resulted in lower than planned
gross margins. Our gross margins were also hurt due to product cost
inflation pressures, which are being felt throughout the apparel industry,
as well as from 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 second quarter diluted earnings per
share will be a loss of between $(0.05) and $(0.10) per share, below our
guidance for diluted earnings per common share of between $0.19 per share
and $0.35 per share provided in our January 24, 2008 press release.
"Looking forward, we continue to feel very good about our product lines
and we expect to see our sales trend improve as we experience more seasonal
temperatures compared to a year ago, begin to anniversary weaker sales
results from a year ago, and continue to refine our merchandise assortments
and our in-store merchandise presentation. However, we recognize that we
are faced with an extremely and increasingly weak overall economic and
retail environment and, thus, we are managing our inventory and
expenditures very tightly. We continue to focus on developing great
maternity product under each of our brands and on improving our sales and
profitability performance.
"We will report results for our second quarter and hold an investor
conference call on Wednesday, April 23, 2008, at which time we will provide
additional information related to our results for the second 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 March 31, 2008, Mothers
Work operates 1,537 maternity locations, including 766 stores,
predominantly under the tradenames 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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