by Alexandra Steigrad
Posted Friday March 18, 2011
From WWD.COM
New York & Company Inc.’s stock leaped more than 20 percent Friday, a day after the misses’ apparel retailer reported soaring fourth-quarter net income that was bolstered by fewer markdowns and strictly controlled inventory.
Updated fashions during the holiday season helped the New York-based company earn a profit of $15 million, or 25 cents a diluted share, for the quarter ended Jan. 29. This compared with income of $2.5 million, or 4 cents a share, in the year-ago period. Adjusted EPS totaled 13 cents.
Net sales rose 1.7 percent to $303.2 million, from $298 million, a year earlier. Wall Street had anticipated EPS of 17 cents on sales of $302.8 million, according to Yahoo Finance.
Quarterly same-store sales rose 1.7 percent, as an increase in full-priced selling propped up gross margins for the period to 29.1 percent of sales, versus year-ago margins of 26.8 percent.
“As we enter the spring season, and throughout fiscal 2011, we will continue to employ a disciplined approach to inventory management, which will help margin and at the same time allow us to expand our assortment in certain key categories, particularly tops and dresses,” chief executive officer Gregory Scott said on the company conference call. “New York & Company is and will remain a promotional brand. However, we will be more targeted with our events.”
Calling 2011 a “transition year,” Scott said the company is “rationalizing” its promotional calendar, as well as focusing on improving its product proposition.
Committed to closing unproductive locations, Scott, who took the reins as ceo last month following Richard Crystal’s retirement, said the retailer would close four stores in the first quarter. The company, which currently operates 555 stores, shuttered 43 stores in 2010.
In 2010, the firm’s net loss expanded to $76.5 million, or $1.29 a diluted share, from a year-ago loss of $13.5 million, or $23 cents a share. Net sales rose 1.5 percent to $1.02 billion, from $1 billion in 2009.
Shares ended the day at $6.61, up $1.16 or 21.3 percent.
