RTW Retailwinds slow January spurs Q4 loss
RTW Retailwinds, Inc., formerly known as New York & Company, reported full-year results on Thursday that outlined a slow fourth-quarter, hurt by lacklustre sales in January.
For the fourth quarter ended February 2, 2019, RTW Retailwinds posted a net loss of $3.6 million, or 6 cents per diluted share, compared with net income of $4.7 million, or 7 cents per share.
Net sales fell to $247.3 million, as compared to $278.7 million in the prior year, with 36 fewer stores, while comparable store sales decreased 1.5 percent.
As a result, net income for the full-year was $4.2 million, or earnings of 6 cents per share compared to the prior fiscal year net income of $5.7 million, or earnings of 9 cents per share for the twelve months.
Net sales for the year were also down at $893.2 million, as compared to $926.9 million for fiscal year 2017. Comparable store sales increased 0.4 percent.
Gregory Scott, RTW Retailwinds, Inc. CEO, noted that sales softened in January causing the business to loose momentum.
“The challenges we experienced in the fourth quarter reflected declines in traffic and new customer acquisition as well as decreased product acceptance in our SoHo Jeans sub-brand,” he explained.
“We are rebalancing are marketing media mix towards new customer acquisition, have made leadership changes in our digital organization, and are adjusting our go-forward assortments in SoHo Jeans to improve the overall trend. Despite this, 2018 was a highly productive year. In fact, financially the year saw increased comparable sales, expansion in gross margin, expense discipline, and inventory management resulting in a $2.5 million increase in adjusted operating income as compared to fiscal 2017.”
Looking ahead at the company’s upcoming quarter results, net sales are expected to decrease in the high single-digit range.
Still, the CEO is optimistic about his company's upcoming launches that will see two digitally native brands launch including Happy x Nature, Kate Hudson's first ready-to-wear collection and a new lingerie lifestyle brand called Uncommon Sense.
During the year, the company -- whose portfolio includes New York & Company, Fashion to Figure, and collaborations with Eva Mendes, Gabrielle Union and Kate Hudson -- will continue to clean up its retail business opening and closing about 15 to 20 stores. It expects to end the fiscal year with roughly 407 to 412 stores, and approximately 2.0 million selling square feet.
“We are confident in our strategy and expect the execution of our initiatives to position us to achieve our goal of long-term sustained profitable growth," said Scott.
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