Destination Maternity second-quarter comp sales improve, strong online growth
Destination Maternity said comparable sales for the second quarter gained 1.2% and online revenues witnessed double-digit growth, signalling a turnaround for the mother's brand, despite an overall decline in net sales for the period ending August 4.
The Moorestown, New Jersey-based firm said that net sales fell 1.9% to $96.4 million, on the back of 27 store closures during the quarter.
In a sign of improvement, Destination Maternity recorded an adjusted net loss for the second quarter of $1.6 million, or $0.11 per diluted share, narrowing compared to the net loss of $1.8 million, or $0.13 per diluted share in 2017.
For the first six months of fiscal 2018, the maternity wear retailer recorded a 2.5% decrease in net sales to $199.6 million, offset partially by a 0.5% comparable sales increase, which improved dramatically on last year's 5.5% comparable sales decline.
For the first-half of the year ending August 4, the company reported an adjusted net loss of $0.5 million, or $0.04 per diluted share, compared a $2.5 million net loss, or $0.18 per diluted share.
In a news statement, Destination Maternity said it managed to narrow net losses and improved profitability in the second quarter, thanks to the rationalising of expenses, comparable sales turnaround and an increase in online sales.
“The hard work of our entire team drove an 18.4% year-over-year increase in e-commerce sales in the quarter, the 11th consecutive quarter of online sales growth," said Marla Ryan, Chief Executive Officer of Destination Maternity.
"On the e-commerce front, we are rolling out enhanced site capabilities and faster shipping solutions over the next 90 days to better serve the needs of the digital savvy, millennial mom. We have retained a leading marketing advisory firm to assist us in identifying ways to drive higher e-commerce revenue growth, improve online conversion, and maximize our marketing spend."
In regard to the physical store landscape, Destination Maternity said the network is "stabilizing" and the brand continues to rejig its product offering by designing more "evergreen" pieces, in a bid to drive sales.
"We are confident the right steps are being taken to position the business for future success," added Ryan.
Looking ahead, the CEO reaffirmed the brand's full-year guidance of 30% to 45% growth in adjusted EBITDA, before other charges.
"We expect Adjusted EBITDA, before other charges will more than double over last year’s second half," she added.
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