Destination Maternity Corporation, the world's leading maternity apparel retailer reported a marginal dip in net sales for the first quarter ended May 2, 2015.
Net sales for the first quarter of fiscal 2016 were $141.6 million compared with $143.5 million for the comparable three month period ended May 3, 2014.
“The slight decrease in total sales resulted from decline in sales related to our efforts to close underperforming stores and a fall in comparable sales,” a press release from the retailer informed.
“The primary driver of the comparable sales decrease was adverse weather conditions across much of the US during February, which suppressed store traffic and adversely impacted sales,” it added.
Comparable sales for the first quarter of fiscal 2016 were down 1.1 per cent as against a 4.0 per cent drop in the same period of last fiscal.
Gross margin for the reporting quarter too reduced to 50.4 per cent from 54.4 per cent in the comparable quarter of prior fiscal.
“The fall in gross margin is consistent with our estimates and reflects price promotional and markdown activity to spur sales and more aggressively manage inventory,” it noted.
Selling, general and administrative expenses (SG&A) for the first quarter of fiscal 2016 too slipped 0.7 per cent to $64.0 million from $64.5 million for the first quarter of fiscal 2015.
As a percentage of net sales, SG&A increased to 45.2 per cent for the quarter under review compared to 45.0 per cent in the prior fiscal first quarter.
“The slight decrease in expense reflects a non-recurring reduction of $1.2 million from settlement of certain unclaimed property matters and cost reductions from closure of underperforming stores,” it observed.
Store closing, asset impairment and asset disposal expenses for the first quarter of fiscal 2016 increased to $1.0 million from $0.3 million in the first quarter of fiscal 2015, mainly from hike in store asset impairments.
Adjusted EBITDA was down massively to $10.4 million for the first quarter of fiscal 2016 as against $17.8 million for the three months ended May 3, 2014.
Adjusted EBITDA before other charges was $12.0 million for the first quarter of fiscal 2016, compared to $18.1 million for the corresponding fiscal of previous fiscal.
Net income for the first quarter of fiscal 2016 also skid to $2.5 million, compared to net income of $7.7 million for the three months ended May 3, 2014.
CEO Anthony Romano said, “"In summary, it has been a productive quarter and our culture change is in full swing and customer focused decisions are being made more consistently.”
“We have ingrained inventory discipline into the culture with clear strategies and life cycle for each SKU and have assembled a strongleadership team and have aligned corporate and store team members,” he too added.
