Feature News

PHILADELPHIA, June 4 /PRNewswire-FirstCall/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today reported sales for the month of May 2009. Net sales for the month of May 2009 decreased 5.3% to $51.3 million from $54.2 million reported for the month of May 2008. Comparable store sales for the month of May 2009 decreased 5.4% on a reported basis, and decreased approximately 5.7% after adjusting for the "days adjustment calendar timing shift." For May 2008, the Company's comparable store sales increased 4.3% on a reported basis, and increased approximately 0.3% after adjusting for the calendar shift. The decrease in total reported sales for May 2009 compared to May 2008 resulted primarily from the decrease in comparable store sales and 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.

Ed Krell, Chief Executive Officer of Destination Maternity, noted, "Our sales for May were somewhat weaker than originally planned, which we attribute to the continued extremely difficult overall retail environment and some shifting of sales from May into late April with the significantly warmer than normal weather conditions experienced in the latter part of April. In our April sales release we noted a strong improvement in our sales trend during the latter part of April, which enabled our comparable store sales performance for the full month of April to significantly exceed our previous expectations and guidance range. Our comparable store sales for April decreased 1.2%, significantly better than our guidance range of a decrease of between 3.0% and 6.0% that we provided in our April 22, 2009 press release. Our sales results for April and May combined are right in line with the April 22 guidance we provided for a fiscal third quarter (April through June) comparable store sales decrease of between 2.5% and 5.5%. Also, it is important to point out that we are operating our business with significantly lower inventory levels and markdown levels versus last year, and thus we are realizing strong improvement in merchandise gross margin versus last year."

During May 2009, the Company did not open any new stores and closed three stores. As of the end of May 2009, the Company operates 730 stores, 357 leased department locations and 1,087 total retail locations, compared to 760 stores, 771 leased department locations and 1,531 total retail locations operated at the end of May 2008. The decrease in leased department locations at the end of May 2009 versus the end of May 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 May 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

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 May 2009, there was one more Sunday and one less Thursday compared to May 2008, which the Company estimates favorably impacted its reported comparable store sales for May 2009 by approximately 0.3 percentage points. The comparable store sales increase of 4.3% for May 2008 was favorably impacted by approximately 4 percentage points due to having five Fridays and five Saturdays in May 2008 compared to four Fridays and four Saturdays in May 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 May 31, 2009, 1,087 retail locations, including 730 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.