Mothers Work Reports Comparable Store Sales Increase of 3.4% and Total Sales Increase of 6.6% for December 2002
Company Expects to Exceed Its Previous First Quarter Earnings Guidance
Mothers Work, Inc. , the world's leading maternity apparel retailer, today announced that net sales for the month of December 2002 increased 6.6% to $47.4 million from $44.5 million reported for the month of December 2001. Comparable store sales for December 2002 increased 3.4% (based on 838 locations) versus a comparable store sales increase of 0.3% (based on 727 locations) for the December 2001 period. During December 2002, the Company opened 3 locations and closed 2 locations, ending the month with 935 locations compared to 939 at December 2001, reflecting iMaternity® store closures during the last twelve months.
Net sales increased 10.5% to $126.4 million for the first quarter of fiscal 2003 ended December 31, 2002, from $114.4 million for the same period of the preceding year. Comparable store sales increased 5.1% during the first quarter of fiscal 2003 (based on 746 locations) versus a comparable store sales decrease of 2.5% during the first quarter of fiscal 2002 (based on 687 locations). For the quarter ended December 31, 2002, the Company opened 30 new locations and closed 4 locations, including 2 iMaternity stores closed during the month of December in connection with the consolidation of the acquired store chain. Based on the Company's strong sales and gross margin performance and its continued focus on controlling expenses, Mothers Work expects that its earnings for the first quarter will exceed the high end of its previous range of guidance for first quarter diluted earnings per share of $0.45 to $0.55.
Rebecca Matthias, President and Chief Operating Officer of Mothers Work, noted, "We are pleased with our performance for the month of December, particularly given the difficult retail environment. Our comparable store sales increase of 3.4% for the month would have been approximately 3 percentage points higher if we did not have one less Saturday in December 2002 (four Saturdays) compared to December 2001 (five Saturdays). On a combined basis for November and December, in which there were nine Saturdays both this year and last year, we delivered a comparable store sales increase of 5.4%. Our comparable store sales increase continues to show the strong reception of our product lines by our customers. Our comparable store sales percentage increase for the month benefited by approximately 1 percentage point due to the strong comparable store sales increases in the remaining acquired iMaternity stores, which were included in our comparable store sales results for the first time in the month of November 2002. These remaining iMaternity stores are not included in our comparable store sales results for the first quarter, because we did not own and operate these stores for the entire first quarter of last year. We believe our sales results also benefited by the continued transfer of sales from closed iMaternity stores to existing Motherhood and Mimi stores. Since our acquisition of the 166-store iMaternity business on October 17, 2001, consistent with our plan, we closed 90 of the iMaternity stores (including 2 stores closed in the first quarter of fiscal 2003) where we believed we could transfer a sufficient portion of the sales to our existing stores within the same market while eliminating acquired store expenses and improving inventory utilization. Our 935 locations at the end of December 2002 was lower than our 939 locations at the end of December 2001, reflecting the closure of 75 of the acquired iMaternity stores after the end of December 2001, largely offset by our own new store openings during this time period. We have continued to realize meaningful gross margin increases over last year, primarily due to our success at reducing product costs through our aggressive sourcing initiatives, and we were able to achieve our sales results for the month without increased price promotional activity compared to last year. In addition, our inventory management initiatives, including our sell-down of acquired iMaternity inventory, have enabled us to maintain an overall inventory level only modestly higher than last December, while delivering a 10.5% sales increase for the quarter."
Mothers Work is the world's largest designer and retailer of maternity apparel, using its custom TrendTrack™ merchandise analysis and planning system as well as its quick response replenishment process to "give the customer what she wants, when she wants it." Mothers Work operates 935 maternity locations, including 785 stores and 150 leased departments, predominantly under the tradenames Motherhood Maternity®, A Pea in the Pod®, and Mimi Maternity® and sells on the web through its maternitymall.com and brand-specific websites.
The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or made from time to time by management of the Company, including expected results of operations, involve risks and uncertainties, and are subject to change based on various important factors. The following factors, among others, in some cases have affected and in the future could affect the Company's financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any such forward-looking statements: changes in consumer spending patterns, raw material price increases, consumer preferences and overall economic conditions, the impact of competition and pricing, availability of suitable store locations, continued availability of capital and financing, ability to hire and develop senior management and sales associates, ability to develop and source merchandise, ability to receive production from foreign sources on a timely basis, and other factors set forth in the Company's periodic filings and registration statements filed with the Securities and Exchange Commission, or in materials incorporated therein by reference.
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SOURCE: Mothers Work, Inc.
CONTACT: Edward M. Krell, Senior Vice President - Chief Financial
Officer of Mothers Work, Inc., +1-215-873-2220
Web site: http://www.motherswork.com/
Company News On-Call: http://www.prnewswire.com/comp/581877.html