Maidenform, the global intimate apparel marketer, has said that on the back of the launch of its Dream franchise and other products introductions, it was expecting a 13% rise in net sales for 2005.

In a statement, Maidenform said it was expecting to report net sales for 2005 in the range of US$381m to $383m, up from US$337m in 2004. As well as the product launches, the company said sales had been driven by new store growth from customers and two specific product rollouts in the first quarter of 2005 to one mass merchant customer and one chain store customer.

However the company added that the results were expected to fall short of previously estimated net sales in the range of $385m to $390m. It said these projections were impacted late in the fourth quarter of 2005 by a strong promotional environment and a greater emphasis on decreasing year-end inventories by select customers.

"Maidenform also experienced certain unexpected product shortages late in the fourth quarter of 2005 with strong demand from specific styles largely in Flexees and Lilyette. The company is addressing such increased consumer demand for these brands by securing additional capacity with Maidenform's sourcing partners," the statement said.
The company said it expects adjusted non-GAAP gross margins for 2005 to be approximately 36.5% compared to 38.7% in 2004 in part due to the impact of a strong promotional environment and a change in channel mix.

In the statement Maidenform said its board of directors has approved a share repurchase programme in an amount up to US$20m.

Looking forward to 2006, the company projected that its net sales for 2006 will increase 5% to 7% from original net sales expectations of 7% to 10% reflecting a more cautious position primarily due to a currently strong promotional climate and more aggressive retail store consolidation.

"Net sales for the first quarter of 2006 will reflect a more challenging year-over-year comparison as a result of a $21.6m net sales increase in 2005, or 28% net sales growth from 2004, significantly driven by $10m in a rollout to all stores for one mass merchant customer and a launch of a panty programme with a chain store customer," the statement said.
Maidenform projected operating income growth for 2006 to be in the range of 8% to 12% from its original expectations of 12% to 18%.

Chief executive officer Thomas J. Ward of Maidenform said: "Our team accomplished a great deal in 2005. We launched the Dream franchise, achieved 13% net sales growth, exited internal manufacturing and moved to 100% sourcing, became a public company, refinanced our outstanding debt at significantly lower rates and paid down $22.5m of debt.

"Even with that, we believe that Maidenform had the capacity to do even better and that is why I made the decision not to take my 2005 incentive bonus. Some of the business challenges that we encountered late in 2005 are with us in 2006.

"However, the company is taking the actions necessary to build and grow the business such as introducing speed teams to be first to market with our innovative products and to best serve our customers, driving margin improvement by working with our sourcing partners to identify additional cost savings and seizing global opportunities."

Ward added: "The announced share repurchase program approved by the Board also clearly demonstrates our belief in the Company and its ability to enhance value for shareholders."