Mothers Work Inc. (Philadelphia) has reported a 95 percent decline in net income for its first quarter of fiscal 2005 ended Dec. 31, 2004.
Net sales for the quarter increased 1.5 percent, while same-store sales decreased 4.2 percent.
For the quarter, the maternity apparel retailer opened 12 stores, including four multi-brand stores, and closed 15 stores, with eight of those related to multi-brand store openings. The company also opened one leased department location and closed two. It ended the quarter with 880 stores and 1111 total retail locations, compared to 870 stores and 1027 total retail locations at the end of December 2003.
“We are pleased and cautiously encouraged by the significant improvement in our sales trend for the first quarter of fiscal 2005, during which our comparable store sales declined 4.2 percent, compared to our 8.3 percent comparable store sales decline for the fourth quarter of fiscal 2004,” said president and coo Rebecca Matthias. “However, we recognize the continued significant impact on our results of the dramatically increased competitive pressures in the maternity apparel business. Although we were able to deliver earnings for the quarter within our most recent guidance range, and higher than our previous guidance range provided in November, we are not satisfied with our financial results for the quarter. Looking forward, we are very excited about our new strategic business initiatives, including our Kohl’s and Sears initiatives and our multi-brand store initiatives, to promote our continued long-term growth in sales and profitability, while addressing the increased competitive pressures in the maternity apparel industry.
“Mothers Work is well-positioned for fiscal 2005 and beyond. As we have previously stated, we see fiscal 2005 as an important year of strategic transition as we significantly increase the number of doors through which our maternity apparel products are sold to consumers through our new Kohl’s and significantly expanded Sears initiatives, and as we continue to develop and expand our multi-brand store concepts, including our Destination Maternity Superstore. These multi-brand store concepts are larger and have higher average sales volume than our average store, and provide the opportunity to lower our store operating expense percentage and improve store operating profit margins over time. Opening these multi-brand stores will typically involve closing two or more smaller stores and consolidating their business into one, and frequently will involve one-time store closing costs resulting primarily from early lease terminations.
“We are encouraged by the initial results of our multi-brand stores in terms of their ability to capture the sales from our related store closings and their potential to reduce store operating expense percentages. As of Dec. 31, 2004, we have 31 two-brand combo stores, two triplex stores, and six Destination Maternity superstores.”