(Filed Under Financial and General Interest News). “2012 was a disappointing year overall, with weak category, customer and consumer trends in our key markets, and increased shapewear competition in department and chain stores,” said Maidenform CEO Maurice Reznik, in remarks that accompanied the firm’s results for 2012. And the start of 2013 will be even worse. Maidenform expects “a sales decline of approximately $20 million compared to 2012, as a result of non-recurring warehouse club and private label business” and a projects a “first quarter loss per share in a range of $0.05 to $0.10.”
On the positive side, Maidenform had a strong fourth quarter 2012 which helped the company post a slight earnings gain over 2011. For the year 2012 the company earned $33,459,000 on sales of $600,277,000 compared with earnings of $33,192,000 on higher sales of $606,327,000 in 2011.
Predicting results for the full year 2013, Maidenform said it expects a small decline in overall sales with “net sales in a range of $575 million to $595 million. Full year EPS in a range of $1.20 to $1.30 per share,” are projected.
“2013 will be a transition year for us as we take additional and more substantial steps to invest in our iconic brand, processes and infrastructure,” continued Reznik. “Additionally, we will be pruning under performing businesses and slow moving products, while improving gross margins and carefully investing in infrastructure.
The goal of these actions is to return Maidenform to sustained long-term growth with top line increases in the mid-single digits and EPS growth of 10% or better starting in 2014. While we focus on these actions, we will continue to introduce new and innovative products. In 2013, we are excited to expand upon our Comfort Devotion collection and, in the fourth quarter, launch a new full figure collection at department and chain stores.”
For the three months ended December 29, 2012, Maidenform earned $5,491,000 on sales of $135,124,000 compared with a loss of $3,075,000 on lower sales of $124,516,000 for the three months. Within that sales increase, “Wholesale segment net sales for the fourth quarter of 2012 increased $11.0 million, or 10.0%, to $120.8 million. Retail segment net sales decreased $0.4 million, or 2.7%, to $14.3 million,” according to the company. Within the wholesale segment, “Net sales for the department stores and national chain stores channel increased $2.0 million, or 3.9%, to $53.9 million for the fourth quarter of 2012. This increase was led by growth in the bra and pants categories, which included the introduction of the company’s Comfort Devotion collection that shipped for the first time in the fourth quarter of 2012. Partially offsetting these increases were sales declines in the shapewear category from increased competition along with a sales decline at a mid-tier department store as it transitions to a new pricing and merchandising strategy.”
In the mass arena, “Mass merchant channel net sales increased $2.4 million, or 6.6%, to $38.7 million for the fourth quarter of 2012, resulting from increased shipments to most customers that were partially offset by lower sales to a warehouse club.”
“Net sales in the other channel increased $6.6 million, or 30.6%, to $28.2 million for the fourth quarter of 2012 from increased program sales to off-price retailers that more than offset sales declines to a private label customer. Total international net sales, which are included in the wholesale segment, decreased $1.3 million, or 9.1%, to $13.0 million. This sales decline was driven by Canada, Germany, and the Benelux countries, which more than offset sales increases in smaller markets such as Brazil.”
In the retail segment, which includes Maidenform’s own chain of stores, “Total retail segment net sales decreased $0.4 million, or 2.7%, to $14.3 million. Same store sales, defined as outlet stores that have been open for more than one year, decreased 5.9% due to reduced customer traffic. Internet sales increased $0.4 million, or 23.5%, to $2.1 million for the fourth quarter of 2012. The retail segment operated 77 outlet stores as of the end of fiscal 2012 and 74 outlet stores as of the end of fiscal 2011.”
Looking within the results for the full year, Maidenform reported “Department stores and national chain stores net sales increased $1.9 million, or 0.8%, to $247.1 million for 2012. This increase was led by growth in the bra and pant categories, which included the introduction of the Comfort Devotion collection and a private label brand that shipped for the first time during 2012. Partially offsetting this increase was an assortment expansion in 2011 at one of the company’s chain store customers that did not repeat in 2012, a sales decline at a mid-tier department store customer as it transitions to a new pricing and merchandising strategy and sales declines in the shapewear category from increased competition.”
Maidenform also reported that its “mass merchant channel net sales decreased $5.5 million, or 2.8%, to $190.7 million from varying results with our mass merchant customers. Some of the factors that drove this decrease were decreased doors at retail and program sales that did not repeat in 2012. Partially offsetting this decrease was a strong performance in full figure and shapewear sales at one of our mass customers.”
“The other channel decreased $3.7 million, or 3.5%, to $100.7 million due to lower sales to a specialty retailer that was partially offset by increased program sales to off-price retailers. Total international net sales increased $2.5 million, or 4.3%, to $60.9 million, driven by growth in major markets, such as Canada, the United Kingdom and Mexico. Partially offsetting these increases were sales decreases in other major markets, such as the Benelux countries, Sweden and Germany, including the impact of unfavorable currency exchange rates on sales. Retail segment net sales for 2012 increased $1.3 million, or 2.1%, to $61.8 million. Same store sales for Maidenform’s retail outlet stores decreased 1.2%. Internet sales increased $2.3 million, or 34.3%, to $9.0 million, resulting primarily from promotional events that more than offset the sales declines at our stores.”
According to the Maidenform explanations the accompanied the 2012 results, “Consolidated gross margins for 2012 were 30.9% versus 31.6% for the same period in 2011. Changes in channel and product mix favorably impacted gross margin but were more than offset by unfavorable off-price retailer activity to drive inventory productivity, additional promotional activities and inventory related clearing costs. Included in 2012 results are markdowns associated with exiting the Maidenform’s Charmed brand. Included in the 2011 results was the discontinuation of a product line that did not repeat in the current year.”
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