New York & Co. (NWY) Tops Q2 EPS by 1c, Offers Outlook

New York & Co. (NYSE: NWY) reported Q2 EPS of $0.03, $0.01 better than the analyst estimate of $0.02. Revenue for the quarter came in at $235.7 million versus the consensus estimate of $231.89 million.

• Net sales and comparable store sales are expected to increase by a low to mid-single-digit percentage versus last year.
• Gross margin is expected to increase in the range of 100 - 200 basis points from the prior year’s third quarter rate reflecting improved product costs, reductions in certain inbound air freight costs incurred in the prior year due to West Coast port delays, and improved leverage of buying and occupancy costs, partially offset by increased shipping costs associated with the growing omni-channel business.
• Selling, general and administrative expenses are expected to be approximately flat to the prior year period reflecting the elimination of $2.8 million of non-operating charges incurred in the prior year and anticipated savings in payroll as a result of the Company’s organizational realignment offset by increases in the following areas of the Company’s business: (i) anticipated increases in performance-based compensation as compared to last year; (ii) increased rent and depreciation expense related to the Company’s new corporate headquarters and investments in information technology; and (iii) increases in variable costs associated with the growing eCommerce business. On a non-GAAP basis, excluding $2.8 million in non-operating charges in the prior year, selling, general and administrative expenses are expected to increase by approximately $2 million to $3 million due to the aforementioned factors; however, these expenses are expected to decrease as a percentage of net sales based upon higher sales.
• Operating results for the third quarter of fiscal year 2015 are expected to significantly improve versus the prior year period reflecting a modest loss versus a loss of $9.5 million in the prior year on a GAAP basis, which included non-operating charges of $2.8 million. The Company does not currently expect to incur any non-operating charges in the third quarter of fiscal year 2015.

For earnings history and earnings-related data on New York & Co. (NWY) click here.

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