Destination Maternity Reports Q4 sales decrease and CFO resignation

By

Jennifer Braun

Published
Mar 29, 2016

Leading maternity apparel retailer Destination Maternity reported on Tuesday a sales decrease of 3.5 percent in its fourth quarter, down to $118.3 million from $121.2 million seen for the same period last year. 
 
The company says the comparable sales decline was due to the challenging retail environment, unseasonably warm weather and merchandising issues.

 
"Our sales were adversely impacted by merchandising issues in our "must have/must win" categories – bottoms, dresses and intimates. Our bottoms program offered too many options regarding lengths and leg openings, which resulted in insufficient depth in the best styles, while we lacked the right mix of special occasion dresses and fresh deliveries later in the quarter in our dress assortment. Our intimates sleep-wear program was short on planned receipts impacted by quality issues as we migrated to a new factory base," Chief Executive Officer and President Anthony Romano commented.
 
Still, gross profit margins for the fourth quarter was up significantly at 49.8 percent, compared to gross margins of 38.4 percent seen the year before.

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Ultimately, the full year 2015 financial results were also effected. Net sales were down $498.8 million compared with $510.6 million for the comparable twelve-month period which ended January 31, 2015.
 
Adjusted net loss was $1.5 million, or $0.11 per diluted share, compared to adjusted net loss of $13.8 million, or $1.02 per diluted share, seen the year before. 
 
Destination Maternity also announced on Tuesday the resignation of its Executive Vice President & Chief Financial Officer Judd P. Tirnauer. He will remain with the Company until April 22, 2016.
 
Destination Maternity Corporation is the world's largest designer and retailer of maternity apparel. It currently operates 1,815 retail locations in the United States, Canada, Puerto Rico and England.