Women's apparel retailer New York & Co. Inc. (NWY) said Friday morning that profit for the second quarter climbed more than two-fold from last year on higher margins and quarterly sales growth. However, comparable store sales declined 2.2%. Earnings per share from continuing operations climbed 75% and came in above analysts' estimate. The company also provided earnings guidance for the third quarter and raised earnings forecast for fiscal 2008.
The company noted that during the quarter, sales met expectations and it achieved a significant increase in gross profit margin driven by the strength of its offerings and actions to tightly control inventory and eliminate non brand-building promotions.
The New York-based company reported net income for the second quarter of $8.78 million or $0.14 per share, higher than $3.50 million or $0.06 per share in the prior-year quarter. Net income for the prior-year quarter included a loss of $1.54 million or $0.02 per share from discontinued operations.
Income from continuing operations for the quarter rose to $8.61 million or $0.14 per share, from year-ago quarter's $5.04 million or $0.08 per share. Earnings per share rose 75%.
On average, seven analysts polled by First Call/Thomson Financial expected earnings of $0.09 per share for the second quarter.
Net sales for the quarter were $295.67 million, up from $284.97 million in the same quarter last year. Four Wall Street analysts had a consensus revenue estimate of $283.61 million for the second quarter. Comparable store sales declined 2.2% over the prior-year quarter increase of 4.9%.
Operating income for the quarter was $14.45 million or 4.9% of net sales, up from $8.64 million or 3.0% of net sales, in the comparable quarter a year ago. Selling, general and administrative expenses increased to $73.93 million or 25.0% of net sales, from $70.05 million or 24.6% of net sales, in the prior-year quarter.
Gross margin, as a percentage of sales, increased to 29.9% from 27.6% in the year-ago quarter, driven by the strength of its offerings and tight inventory control as well as non-brand-building promotions.
Commenting on the results, chairman and chief executive officer, Richard Crystal said, "We are pleased to continue our positive momentum and deliver better than expected second quarter results. Our performance this quarter demonstrates the success of our strategies to maximize profitability in a tough environment and our ability to deliver compelling assortments and value to our customers."
For the first six months, the company reported net income of $15.50 million or $0.25 per share, higher than $4.30 million or $0.07 per share in the prior-year period. Net income for the prior-year period included a loss of $5.91 million or $0.10 per share from discontinued operations.
Income from continuing operations for the period rose to $15.33 million or $0.25 per share, from year-ago period's $10.21 million or $0.17 per share. Earnings per share rose 47%.
Net sales for the six-month period were $565.74 million, up from $559.15 million in the same period last year. Comparable store sales declined 4.3% over the prior-year period increase of 2.0%.
"As we begin the second half of the year, we believe we are well positioned to accomplish our goals and will continue to emphasize the strategies that generated our strong first half performance," Crystal added.
Looking ahead to the third quarter, the company currently expects earnings in a range of $0.08 to $0.12 per share on comparable store sales in the low to mid negative single-digit range. The Street is presently anticipating earnings of $0.11 per share for the third quarter.
For fiscal 2008, the company raised its earnings outlook to a range of $0.52 to $0.60 per share from the prior guidance in the range of $0.44 to $0.54 per share. The company also expects full-year comparable store sales in the low to mid negative single-digit range. Analysts currently estimate full-year earnings of $0.54 per share.
NWY closed Thursday's regular trading session at $10.02, down $0.19 on a volume of 0.44 million shares, lower than the three-month average volume of 0.65 million shares.
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