US: Poor weather hurts Destination Maternity Q2 profit
- Q2 profit slumps 45.8% to $3.2m
- Sales fall 6.5% to $126.1m
- Comparable store sales drop 5.1%
Destination Maternity has blamed adverse weather and challenging economic conditions for a 45.8% decline in second-quarter profit.
Net income came to US$3.2m for the three months to 31 March, compared to $5.9m in the prior year period.
The US maternity wear retailer said this included charges of $3m related to the company's planned relocation of its headquarters and distribution facilities.
Sales declined 6.5% to $126.1m from $134.9m last year, while comparable store sales fell 5.1%.
"We are disappointed in our sales and earnings results for the second quarter," said CEO Ed Krell. "Our sales for the quarter were considerably weaker than planned.
The main reason, he added, was adverse weather conditions, including snow and icy conditions which suppressed store traffic.
"We believe that our weaker than planned sales results also reflect the continued challenging overall economic environment which has affected many retailers in recent months," Krell emphasised.
During the first six months of the year, net income declined 29.3% to $7.5m from $9.7m in the previous year, while sales slipped 3.4% to $260.9 against $270.1m last year.
The company expects full-year earnings per share to fall between 7% and 15% to $1.53-1.66, compared to its earlier guidance of $1.61-1.79.
Net sales are forecast to decline 1-2.3% to be between $528m and $535m, down from its earlier expectations of $539-$550m.
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Destination Maternity has moved to a loss in its fourth-quarter on the back of charges related to management and organisational changes....
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