Destination Maternity swings to loss in calendar transition

Moorestown, N.J. – Destination Maternity Corp. swung from profit to loss during the four-month period ended Jan. 31, 2015. This period marks the transition period related to the company's previously announced fiscal year-end change from Sept. 30 to the Saturday nearest Jan. 31 each year.



Destination Maternity reported a net loss of $17.38 million, compared to net income of $3.09 million in the same period a year earlier. Higher cost of goods sold and a variety of impairment charges pushed Destination Maternity into the red.



During fiscal 2015, Destination Maternity expects $25 million in capital expenditures, including $9 million related to the relocation and $16 million of capital expenditures related to new stores, store relocations and remodels, as well as continued investment in information systems and technology, including inventory allocation technology.



Net sales declined 3% to $165.64 million, from $170 59 million. Same-store sales dropped 2%.



"Although our financial results for the transition period are challenging, it was successful and productive,” said Anthony M. Romano, CEO. “Although we are not satisfied with the total sales for the period, our 2% same-store sales decrease was incrementally better month by month and was positive in January. Our core operating results were about where we expected, and we took some difficult but necessary actions to correct foundational issues in our business to improve our prospects for long term success, including an inventory write-down of approximately $11 million.”



For fiscal year ended Jan. 31 2015 (which does not directly correlate to the prior fiscal year), Destination Maternity reported net loss of $10 million and net sales of $512 million.