PHILADELPHIA, May 7 /PRNewswire-FirstCall/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today reported sales for the month of April 2009. Net sales for the month of April 2009 decreased 4.3% to $49.9 million from $52.2 million reported for the month of April 2008. Comparable store sales for the month of April 2009 decreased 1.2% on a reported basis, and decreased approximately 3.2% after adjusting for the Easter-related calendar timing shift, which the Company estimates helped its reported comparable store sales by approximately 2 percentage points. For April 2008, the Company's comparable store sales increased 2.3% on a reported basis, and increased approximately 4.3% to 5.3% after adjusting for the calendar shift. The decrease in total reported sales for April 2009 compared to April 2008 resulted primarily from the decrease in Sears(R) leased department sales resulting from the closure of all of the Company's remaining leased departments within Sears stores during the month of June 2008, and to a much lesser extent, from the decrease in comparable store sales.
Ed Krell, Chief Executive Officer of Destination Maternity, noted, "We are very pleased with the strong improvement in our sales trend during the latter part of April, which enabled our sales performance for the full month of April to exceed our previous expectations and guidance range. Our reported comparable store sales decrease of 1.2% for the month was better than our guidance range of down 3.0% to 6.0%, which we provided in our April 22, 2009 press release. Although we are never satisfied with a comparable store sales decline, we believe our sales performance for the month is very respectable in light of the continued extremely difficult overall retail environment and the significant comparable store sales declines experienced by many retailers in recent months. Our comparable store sales results during the first two-thirds of the month were unfavorably impacted by unseasonably cool weather in many parts of the United States, which hurt sales of Spring merchandise, and our sales trend improved significantly in the latter part of April, as the weather returned to more seasonable temperatures and even significantly warmer than normal temperatures in many regions of the U.S. We are also very pleased to have achieved our sales performance with significantly lower inventory levels and markdown levels versus last year, and strong improvement in merchandise gross margin versus last year."
During April 2009, the Company opened its 22nd Destination Maternity Superstore and closed two stores, both related to the opening of the superstore. As of the end of April 2009, the Company operates 733 stores, 355 leased department locations and 1,088 total retail locations, compared to 758 stores, 771 leased department locations and 1,529 total retail locations operated at the end of April 2008. The decrease in leased department locations at the end of April 2009 versus the end of April 2008 predominantly reflects the closure of the leased departments within Sears stores as compared to the 477 Sears leased departments operated by the Company at the end of April 2008, partially offset by the opening of an additional 69 Babies"R"Us(R) leased department locations in January 2009 and February 2009.
Days Adjustment Calendar Shift and Easter Timing 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 April 2009, there was one more Thursday and one less Tuesday compared to April 2008, which did not have a significant impact on reported sales. However, Easter fell in April this year (April 12, 2009) compared to March in last year (March 23, 2008), and the Company estimates that this Easter timing shift favorably impacted its reported comparable store sales for April 2009 by approximately 2 percentage points. The comparable store sales increase of 2.3% for April 2008 was unfavorably impacted by approximately 2 to 3 percentage points due to the earlier timing of Easter compared to the previous year (March 23, 2008 compared to April 8, 2007) and due to having four Sundays in April 2008 compared to five Sundays in April 2007.
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." In the United States and Canada, Destination Maternity operates, as of April 30, 2009, 1,088 retail locations, including 733 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. Destination Maternity also 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. In addition, Destination Maternity is expanding internationally and has recently entered into exclusive store franchise and product supply relationships in India and the Middle East.
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 net sales, comparable store sales, other 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: 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 implement our merchandise brand and retail nameplate restructuring, the success of our international expansion, 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, 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.
