Expansive growth in the mass market helped Maidenform Brands to gains in profits and sales in the first quarter.

In the three months ended 31 March, the Bayonne, New Jersey-based intimate apparel maker registered net income of US$10.6m, or $0.44 a diluted share, 69.6% above the $6.2m, or $0.26, reported for the prior-year quarter.

Excluding an after-tax curtailment gain of $3.6m, net income in the quarter was $7m, or $0.29, slightly above the $0.28 expected by analysts and 11.5% above last year's period.

Net sales were up 6.3% to $107.2m from $100.8m in the 2006 quarter despite a 9.8% decline in sales to department and national chain stores, to $53.5m.

The decline was more than offset by a 49.7% increase in sales to mass merchants, which finished the quarter at $28.6m. Sales at Maidenform's own stores declined 1.9% to $10.2m and same-store sales were down 4% due to reduced customer traffic.

The increase in sales to mass merchants contributed to a decline in gross margins to 36.3% of sales from 37.7% a year ago.

"We are pleased that the strong foundation we have built continued to deliver solid performance in the first quarter of 2007," said Thomas Ward, CEO. "Our momentum in the mass merchant branded business drove our 6.3% net sales increase."

He indicated that the firm's latest product line, The Smooth Bra, "has performed extremely well since its roll-out. We fully expect this collection to be a strong performance driver for the department stores and national chain stores channel this year."

Maidenform reiterated previous guidance of 15% to 18% growth in EPS for the year, along with net sales growth of 6% to 7% and low double-digit net sales growth in the branded wholesale business.

In addition to Maidenform, the company's brand line-up includes Flexees, Sweet Nothings and Self Expressions.
By Arnold J Karr.