Destination Maternity reports mixed first quarter fiscal 2016 results

By

Jennifer Braun

Published
May 26, 2016

Destination Maternity Corporation, a leading maternity apparel retailer, announced on Thursday mixed financial results for the first quarter of fiscal 2016 which ended April 30, 2016.
 
Compared to the first quarter of fiscal 2015, net sales were down to $124.4 million compared to $141.6 million. Comparable sales equally decreased 5.4 percent, compared to a 1.1 percent decrease seen in the first quarter of fiscal 2015.

 
Still, gross margin for the first quarter of fiscal 2016 improved 370 basis points to 54.1 percent, as did the adjusted EBITDA before other charges, jumping to $13.2 million compared to $12.0 million seen the previous year. Adjusted net income was also up at $4.5 million, or $0.33 per diluted share, compared to adjusted net income of $3.7 million, or $0.27 per diluted share, for the first quarter of fiscal 2015.
 
Anthony M. Romano, Chief Executive Officer, President & Interim Chief Financial Officer seemed pleased with the results in a news statement: "For the first quarter, in a challenging environment that pressured sales, we are pleased to report a 10.2 percent increase in adjusted EBITDA before other charges. Our positive earnings growth compared to the prior year demonstrates the early success of our merchandising, inventory and expense management initiatives, which led to a significant increase in gross margin, a reduction in SG&A and a decrease in ending inventory as compared to the first quarter of fiscal 2015.” 

For the rest of fiscal 2016, the company expects comparable sales to be flat for the full fiscal year with greater improvement anticipated for the second half of fiscal 2016.
 
The Company also plans to open 7 to 10 new stores and close 25 to 35 stores in 2016.
 
As of April 30, 2016 Destination Maternity operates 1,487 retail locations in the United States, Canada, Puerto Rico and, most recently, England.