Destination Maternity reports Q2 loss

Philadelphia Destination Maternity Corp. reported a net loss for the second quarter of fiscal 2009, ended March 31, of $1.9 million, which included a $3.4 million non-cash goodwill impairment charge, compared with a net loss of $0.4 million last year. The results exceeded the company’s prior guidance.

"We are very pleased with our earnings performance for the second quarter, as well as the continued actions we are taking to further improve our profitability and cash flow, which has enabled us to increase our full year fiscal 2009 guidance for earnings and cash flow,” said Ed Krell, CEO, Destination Maternity Corp. “Our earnings for the second quarter, excluding the goodwill impairment charge, significantly exceeded both the top end of our prior earnings guidance range and our last year second quarter earnings, as a result of our strong merchandise gross margin performance and continued tight management of expenses.”

Net sales for quarter decreased 6.4% to $130.1 million, from $139.0 million in the year-ago period and were within the company's guidance. The company attributed the decrease primarily due to the closure of all its remaining leased departments within Sears stores during the month of June 2008, and a decrease in comparable-store sales.

Same-store sales fell 2.8% during the second quarter of fiscal 2009, with the shift in Easter a major contributing factor. The company had forecast a decrease of 3.0% to 5.0% for the quarter.

The retailer plans to open approximately 13 to 17 new stores during the year, including approximately four to seven new multi-brand stores, and close approximately 40 to 50 stores. Approximately eight to 12 of these planned store closings are related to openings of new multi-brand stores, including Destination Maternity Superstores.