UPDATE 2-Mothers Work posts wider Q4 loss, cuts '08 view
(Adds details, CFO comments, share movement)
BANGALORE Nov 20 (Reuters) - Maternity apparel retailer Mothers Work Inc MWRK.O posted a wider fourth-quarter loss and cut its fiscal 2008 outlook, mainly due to a fall in sales.
Chief Financial Officer Edward Krell said by phone that weak overall economic and retail environment, unfavorable weather and popularity of certain styles in the non-maternity women's apparel market were the main reasons for the weakness in sales.
The retailer posted a fourth-quarter net loss of $5.4 million or 92 cents a share, compared with a loss of $602 000, or 11 cents a share, a year ago.
Net sales fell 4.9 percent to $135.8 million.
The company said the decrease in sales compared with the year-ago was mainly from a drop in comparable store sales, partially offset by increased sales from its leased department and licensed relationships and marketing partnerships.
Two analysts on average had expected Mothers Work to post a loss of 93 cents a share, excluding exceptional items, while three analysts on average expected revenue of $137.7 million, according to Reuters Estimates.
The company said its fourth-quarter selling, general and administrative expense was about 5 percent higher than the year-ago quarter due to negative expense leverage from the decrease in comparable store sales, increased legal expenses and increased employee benefits costs.
Mothers Work sells maternity apparel through four chains - A Pea in the Pod, Destination Maternity, Mimi Maternity, and Motherhood Maternity.
The Philadelphia-based company sees fiscal 2008 earnings of $1.00 to $1.50 a share on net sales of $574 million to $586.5 million. It had previously forecast fiscal 2008 earnings of $1.89 to $2.56 a share, on revenue $595 million to $611 million.
Mothers Work said its 2008 sales outlook reflected the non-renewal of its relationship with leased department store Sears which will end in the third quarter of fiscal 2008.
Analysts on average were expecting earnings of $1.56 cents a share, on revenue of $580.2 million.
For the 2008 first quarter, the company expects to earn 11 cents to 25 cents a share on net sales of $144 million to $147 million. Analysts on average were expecting earnings of 42 cents a share on revenue of $148.1 million.
Shares of the company were trading down by about 2 percent at $16.97 in afternoon trade on the Nasdaq. (Reporting by Swagata Gupta in Bangalore; Editing by Jarshad Kakkrakandy)
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