New York & Co. (NWY) Reports Q4 EPS of $0.08 on Revenues of $278.7M

New York & Co. (NYSE: NWY) reported Q4 EPS of $0.08. Revenue for the quarter came in at $278.7 million.

Fourth Quarter Fiscal Year 2017 Results (14-weeks ended February 3, 2018 compared to the 13-weeks ended January 28, 2017):

• Net sales were $278.7 million, which included $7.1 million of royalty and related revenue from the private label credit card agreement, as compared to $266.3 million in the prior year, which included $5.4 million of royalty and related revenue from the private label credit card agreement. The Company noted that fiscal year 2017 included 53 weeks while fiscal year 2016 included 52 weeks, with the additional week occurring in the fourth quarter.
• Comparable store sales increased 3.0% largely driven by a double-digit percentage increase in the Company’s eCommerce business, combined with increased royalty and related revenue from the private label credit card agreement. All quarterly comparable store sales figures are based on a 13-week comparable time period.
• Gross profit as a percentage of net sales increased 210 basis points to 29.5% versus the fiscal year 2016 fourth quarter gross profit percentage of 27.4%, reflecting the highest gross margin rate achieved in the fourth quarter since 2006. The increase during the quarter reflects a 160 basis point improvement in the leverage of buying and occupancy costs and a 50 basis point increase in merchandise margin.During the quarter, the Company continued to aggressively reduce expenses which led to a $1.8 million decrease in buying and occupancy costs, resulting primarily from rent reductions which contributed to the 160 basis point improvement in the leverage of these expenses, as compared to the prior year period.The 50 basis point increase in merchandise margin was primarily driven by reduced product costs, combined with a $1.7 million increase in royalties under the private label credit card agreement, partially offset by a $2.7 million increase in shipping costs resulting from significant growth in the eCommerce business.
• On a GAAP basis, selling, general and administrative expenses were well below our guidance at $77.2 million, or 27.7% of net sales, as compared to $82.3 million, or 30.9% of net sales in the prior year period. The current year period includes expenses associated with the 53rd week, as well as $0.3 million of various non-operating charges. The prior year period does not include expenses associated with the 53rd week, but does include a $6.2 million legal reserve that the Company established relating to an ongoing trademark infringement case where the Company received an unfavorable judgment. On a non-GAAP basis, selling, general and administrative expenses were $77.0 million, or 27.6% of net sales inclusive of the extra week of sales and expenses, or 14-week period, as compared to non-GAAP selling, general and administrative expenses of $76.1 million, or 28.6% of net sales in the prior year, which represented a 13-week period.
• GAAP operating income improved significantly to income of $5.0 million, which included non-operating charges of $0.3 million. Excluding the $0.3 million of non-operating charges, adjusted non-GAAP operating income was $5.3 million, compared to the prior year’s non-GAAP operating loss of $3.0 million, which excluded $6.2 million of non-operating charges. Operating income on a GAAP basis exceeded the high-end of the Company’s increased guidance provided on January 8, 2018.
• GAAP net income for the fourth quarter of fiscal year 2017 was $4.7 million, or earnings of $0.07 per diluted share, as compared to the prior year’s GAAP net loss of $10.0 million, or a loss of $0.16 per diluted share. On a non-GAAP basis, the Company’s fourth quarter 2017 adjusted net income was $5.0 million, or earnings of $0.08 per diluted share. This compares to prior year’s fourth quarter, non-GAAP adjusted net loss of $3.8 million, or a loss of $0.06 per diluted share.

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

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