Destination Maternity (DEST) Q1 Sales Slightly Miss Views; Comps Rose 1.9%

January 8, 2013 6:11 AM EST
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Destination Maternity Corporation (Nasdaq: DEST) reported sales for the first quarter of fiscal 2013 ended December 31, 2012, and announced that it expects its first quarter fiscal 2013 earnings to be near the middle of its prior earnings guidance range and to significantly exceed last year's first quarter earnings.

Net sales for the first quarter of fiscal 2013 decreased 0.8% to $135.3 million from $136.4 million reported for the first quarter of fiscal 2012. Comparable sales (which include Internet sales) increased 1.9% versus a comparable sales decrease of 4.1% for the first quarter of fiscal 2012. The slight decrease in total reported sales for the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012 resulted primarily from decreased sales related to the Company's continued efforts to close underperforming stores, partially offset by the increase in comparable sales.

*** The Street was looking for Q1 sales of $135.5 million.

For the quarter ended December 31, 2012, the Company opened two new multi-brand Destination Maternity stores, and closed six stores, including two store closings related to Destination Maternity store openings. As of December 31, 2012, the Company operates 621 stores, 1,266 leased department locations and 1,887 total retail locations, compared to 656 stores, 1,405 leased department locations and 2,061 total retail locations operated as of December 31, 2011. In connection with the Company's new broad-based partnership with Bed Bath & Beyond Inc. and its subsidiary, Buy Buy Baby, Inc., the Company discontinued operation of its 124 remaining leased departments in Babies"R"UsĀ® stores in late October 2012 and began to open leased departments in select buybuy BABY stores. As of November 24, 2012, Bed Bath & Beyond Inc. had 78 buybuy BABY stores, including 12 stores as of December 31, 2012, in which the Company operates leased departments. Over time, the Company expects to significantly increase the number of buybuy BABY stores in which it has a maternity apparel leased department.

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