US: Maidenform moves into black in Q4 and year
Maidenform Brands erased year-ago losses in both the fourth quarter and full year as the firm leveraged higher sales with improved margins.
In the three months ended 30 December, net income available to common shareholders was US$3.2m, or 13 cents a diluted share, versus a loss of $209,000, or 1 cent, in the prior-year quarter.
Net sales picked up 6.9% to $85m from $79.5, led by a 7.5% increase in volume from department and national chain stores, to $45.6m, and a 9.4% increase in revenues with mass merchants, to $16.3m. The company indicated that the growth in the mass channel was largely driven by its entry into the shapewear category with a single mass-market customer.
Same-store sales of Maidenform outlet stores grew 4.2% in the quarter as its store count ended the year at 76, an increase of two.
The Bayonne, New Jersey-based intimate apparel supplier said gross margin picked up a lusty 450 basis points to 37.4% of sales in the quarter. Maidenform said that the improvement reflected a better product mix and improved sourcing, as well as a decline in promotional activity as compared to the final quarter of 2005.
"The company's performance was driven by our efforts to grow our brand franchises and enter new product categories with our customers," said Thomas Ward, chief executive officer.
For the full year, net income totalled $27.8m, or $1.15 a diluted share, versus a loss of $8.3m, or 39 cents, in 2005. The year-ago bottom line was reduced by $17.3m because of preferred stock dividends and changes in redemption value, which eradicated $8.9m in net income before special distributions.
Net sales for the year were up 9.1% to $416.8m from $382.2m. Sales to mass merchants grew 22.1%, to $91.8m, and those to department and national chains stores rose 9.9%, to $222.8m.
In guidance for 2007, the company said it expects earnings per share growth of between 15% and 18% on top of a 10% to 14% in operating income.
Gross margin is expected to come in at about 38%, slightly higher than in the fourth quarter, but is expected to be lower than the annual projection in the first quarter due to higher sales to mass merchants. Sales are expected to rise 6% to 7% with low double-digit gains in the wholesale segment.
The company's brand portfolio includes Maidenform, Flexees, Collection MTM and Lilyette.
By Arnold J Karr.
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