Destination Maternity Corporation Reports Sales for January 2009
Comparable Store Sales Increase 5.1% on a Reported Basis, and Increase Approximately 1.1% after Adjusting for Calendar Shift
PHILADELPHIA, Feb. 5 /PRNewswire-FirstCall/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today announced that net sales for the month of January 2009 increased 0.4% to $38.8 million from $38.7 million reported for the month of January 2008. The Company also announced that its comparable store sales for the month of January 2009 increased 5.1% on a reported basis and increased approximately 1.1% after adjusting for the "days adjustment calendar shift," versus a comparable store sales decrease of 2.1% for January 2008. The increase in sales for the month compared to January 2008 resulted primarily from the increase in comparable store sales, partially offset by a decrease in Sears(R) leased department sales, due to the closure of all of the Company's remaining leased departments within Sears stores during the month of June 2008, and lower sales from the Company's licensed relationship.
Ed Krell, Chief Executive Officer of Destination Maternity, noted, "We are very pleased to report positive comparable store sales for January, especially in light of the extremely difficult overall retail environment and the significant comparable store sales declines experienced by many retailers in recent months. Even after considering the effect of the calendar shift, our comparable store sales were up approximately 1.1%. In addition, we are pleased to have achieved this sales performance with lower markdown levels and improved merchandise gross margin performance versus last year. Our comparable store sales increase of 5.1% for the month of January was consistent with our guidance range for a January comparable store sales increase of between 4.5% and 6.0% that we provided in our January 27, 2009 press release."
Comparable store sales for January 2009 increased 5.1% (based on 962 locations) versus a comparable store sales decrease of 2.1% (based on 1,405 locations) for January 2008. During January 2009, the Company opened no stores and closed 11 stores. As of the end of January 2009, the Company operates 739 stores, 334 leased department locations and 1,073 total retail locations, compared to 763 stores, 771 leased department locations and 1,534 total retail locations operated at the end of January 2008. The decrease in leased department locations at the end of January 2009 versus the end of January 2008 predominantly reflects the closure of the leased departments within Sears stores as compared to the 478 Sears leased departments operated by the Company at the end of January 2008, partially offset by the opening of an additional 52 leased department locations in January 2009 with Babies"R"Us(R).
Days Adjustment Calendar Shift
Destination Maternity reports sales on a calendar month basis, rather than on a "4-5-4 retail fiscal calendar" where each fiscal week and fiscal month starts on a Sunday and ends on a Saturday. Thus, for each calendar month, there is a "days adjustment calendar shift" which may help or hurt reported calendar month sales and comparable store sales due to different days of the week typically contributing more sales than other days of the week. For January 2009, there was one more Friday and Saturday and one less Tuesday and Wednesday compared to January 2008, which the Company estimates favorably impacted its reported comparable store sales for January 2009 by approximately 4 percentage points.
Destination Maternity Corporation is the world's largest designer and retailer of maternity apparel, using its quick response replenishment system to "give the customer what she wants, when she wants it." As of January 31, 2009, Destination Maternity Corporation operates 1,073 retail locations, including 739 stores, predominantly under the tradenames Motherhood Maternity(R), A Pea in the Pod(R), and Destination Maternity(R), and sells on the web through its DestinationMaternity.com and brand-specific websites. In addition, Destination Maternity Corporation 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 net sales, comparable store sales, other results of operations, liquidity and financial condition, expense savings, 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: the impact of the current global economic slowdown on the retail industry in general and on apparel purchases in particular, 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, unusual weather patterns, changes in consumer preferences and spending patterns,demographics and other macroeconomic factors that may impact the level of spending for maternity apparel, overall economic conditions and other factors affecting consumer confidence, the impact of competition and fluctuations in the price, availability and quality of raw materials and contracted products, availability of suitable store locations, continued availability of capital and financing, potential additional goodwill impairment charges, 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.
