Mothers Work Reports February 2003 Sales
Mothers Work, Inc. , the world's leading maternity apparel retailer, today announced that net sales for the month of February 2003 increased 1.2% to $33.6 million from $33.2 million reported for the month of February 2002. Comparable store sales for February 2003 decreased 5.0% (based on 835 locations) versus a comparable store sales increase of 5.0% (based on 726 locations) for the February 2002 period. During February 2003, the Company opened 13 locations and closed 4 locations, ending the month with 942 locations compared to 889 at February 2002, reflecting the Company's net new store openings partially offset by the closure of 29 acquired iMaternity® stores during the last twelve months.
Rebecca Matthias, President and Chief Operating Officer of Mothers Work, noted, "We are obviously disappointed with our performance for the month of February, but believe the results were primarily caused by the extremely adverse weather conditions in many regions of the United States, as well as heightened global political concerns and a continued deterioration in consumer confidence, all of which resulted in significantly reduced shopping activity. Our sales were particularly weak during the second half of February, including Presidents Day weekend, when severe winter weather conditions drastically affected sales, especially in the Northeast and mid-Atlantic regions. The harsh weather conditions particularly hurt sales of Spring merchandise, which also negatively impacted overall gross margin compared to our plan as customers gravitated more towards Fall markdown merchandise and less to full price Spring merchandise than is typical for February. Nonetheless, we continued to realize meaningful gross margin increases over last year, primarily due to our success at reducing product costs through our aggressive sourcing initiatives.
Based on our results for February, we are revising our sales and earnings guidance for our second quarter ending March 31, 2003. Our revised guidance for second quarter sales is approximately $111 million, compared to our previous guidance of $114 million. This revised sales guidance reflects an essentially flat comparable store sales forecast for the second quarter, compared to our previous guidance of a 2.5% to 3.5% comparable store sales increase for the quarter, and assumes approximately a 1% comparable store sales increase for the month of March. Based on this revised sales guidance, we project second quarter diluted earnings per share in the range of $0.15 per share, a reduction from our previous guidance of between $0.22 and $0.27 per share. Of course, our ability to achieve these targeted results depends on, among other factors, achieving our targeted sales for March and the overall retail, economic, political and competitive environment. With respect to our full year guidance for fiscal 2003, upon the completion of the second quarter, we will review the impact, if any, on our full year guidance of both our second quarter results and our outlook for the third and fourth quarters. We expect to comment on our full year guidance for fiscal 2003 and revise such guidance if necessary when we release our second quarter earnings in mid- April.
We continue to focus on our objectives of increasing sales (primarily through store openings), realizing product cost reductions and gross margin improvements, and controlling expenses. We believe we are well positioned strategically and financially to meet current challenges and capitalize on future opportunities."
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 942 maternity locations, including 794 stores and 148 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/
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