Needham & Company Maintains a 'Strong Buy' on Destination Maternity (DEST); FY11 Ends On Weakness; Guidance "Cautiously Optimistic"

Needham & Company maintains a 'Strong Buy' on Destination Maternity (NASDAQ: DEST) price target cut $2 to $22.00.

Needham analyst says, "DEST had preannounced sales figures of $129.4 mm for Q4 and indicated that EPS would be towards the low end of their guided range of $0.18 – $0.28—the actual reported EPS was $0.20. Management provided 2012 guidance that was cautious in that is wasn’t calling for a heroic turnaround, but optimistic in that there is little evidence that business will improve as expected. Comp-store sales are down 4% in Q1 to date. Continued margin pressure and cannibalization from the company’s Macy’s (NYSE: M)(N/R) operations will impact financial results well into FY 2012. We have cut our EPS estimates for 2012 and 2013, and have lowered our price target to $22, but still see sufficient upside to warrant rating the stock as a Strong Buy."

For an analyst ratings summary and ratings history on Destination Maternity click here. For more ratings news on Destination Maternity click here.

Shares of Destination Maternity closed at $14.51 yesterday.

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