Destination Maternity Corporation, the world's leading maternity apparel retailer, reported sales for the second quarter of fiscal 2013 ended March 31, 2013, and announced that it expects its second quarter fiscal 2013 earnings to be in the top half of its prior earnings guidance range and to exceed last year's second quarter earnings.
Net sales for the second quarter of fiscal 2013 decreased 2.1% to $134.9 million from $137.8 million reported for the second quarter of fiscal 2012.
The decrease in total reported sales for the first six months of fiscal 2013 compared to the first six months of fiscal 2012 resulted primarily from decreased sales due to the closure of all of the Company's remaining leased departments within Babies"R"Us stores during the month of October 2012, and decreased sales related to the Company's continued efforts to close underperforming stores, partially offset by the increase in comparable sales.
Ed Krell, Chief Executive Officer of Destination Maternity, noted, "We are pleased with our continued positive comparable sales results and our strong earnings performance, with our expected earnings for the second quarter in the top half of our prior earnings guidance range. For the quarter, our sales were within, but toward the lower end of, our sales guidance range.
We believe that our sales for the month of March and for the second quarter as a whole were negatively impacted by unseasonably cold weather in March 2013 throughout many regions of the United States, especially compared to the significantly warmer Spring-like weather of March 2012.
Nonetheless, with our continued tight management of expenses, we expect our diluted earnings per share for the second quarter to be in the top half of our prior earnings guidance range of $0.38 to $0.44 per share that we provided in our January 31, 2013 press release, and to be higher than last year's second quarter diluted earnings of $0.38 per share.
This represents our third consecutive quarter of achieving both a comparable sales increase and an increase in earnings over the prior year, showing the continued progress we have made with our sales initiatives, while maintaining strong operational and expense discipline.
"Our progress in improving our comparable sales results can be seen by our adjusted comparable sales increases of 2.4% for the second quarter and 3.1% for the first six months of fiscal 2013, both adjusted for the calendar timing shift as described later in this press release.
"Our total sales of $134.9 million for the second quarter were within our sales guidance range of $134 to $138 million provided in our January 31 press release, primarily due to our reported comparable sales increase of 1.6%, which was within our guidance range for a comparable sales increase of between 0.5% and 3.5% for the quarter.
For the quarter ended March 31, 2013, the Company opened eight stores, three of which were multi-brand Destination Maternity stores, including the Company's first Destination Maternity superstore in Canada, and closed 16 stores, including five store closings related to Destination Maternity store openings.
As of March 31, 2013, the Company operates 613 stores, 1,262 leased department locations and 1,875 total retail locations, compared to 643 stores, 1,384 leased department locations and 2,027 total retail locations operated as of March 31, 2012.
In connection with the Company's new broad-based partnership with Bed Bath & Beyond Inc. and its subsidiary, Buy Buy Baby, Inc., the Company discontinued operation of its 124 remaining leased departments in Babies"R"Us stores in late October 2012 and began to open leased departments in select buybuy BABY stores.
According to Bed Bath & Beyond Inc.'s latest public disclosure, as of April 10, 2013 there are 83 buybuy BABY stores. As of March 31, 2013, the Company operates leased departments in 14 of these stores. Over time, the Company expects to significantly increase the number of buybuy BABY stores in which it has a maternity apparel leased department.
