New York & Company posts 2.9 percent decline in Q1 net sales

New York & Company’s first quarter net sales were 209.9 million dollars, decreasing 2.9 percent compared to 216 million dollars in the prior year, reflecting growth in ecommerce, offset by decreases in brick-and-mortar stores due to the combination of lower store count and 0.7 percent decrease in comparable store sales.

Commenting on the results, Gregory Scott, New York & Company’s CEO said in a press release, “Our first quarter top and bottom-line results were in line with our guidance, and were highlighted by the continued success of our celebrity collaborations, a double-digit percentage increase in ecommerce sales and strong gross margin expansion to its highest level in the first quarter since 2008. We expect that the continued execution of our strategies will drive increased sales productivity and profitability in this fiscal year.”

Gross profit increases 300 basis points

The company said, gross profit as a percentage of net sales increased 300 basis points to 30.7 percent versus the fiscal year 2016 first quarter gross profit percentage of 27.7 percent, reflecting the highest gross margin rate achieved in the first quarter since 2008.

GAAP operating results narrowed to a loss of 3.9 million dollars compared to the prior year’s first quarter GAAP operating loss of 5.4 million dollars. Excluding 1.6 million dollars of non-operating charges, the non-GAAP adjusted operating loss in the current year’s first quarter was 2.3 million dollars. GAAP net loss for the first quarter of fiscal year 2017 was 4.2 million dollars or a loss of 0.07 dollar per diluted share compared to the prior year’s GAAP net loss of 5.7 million dollars or a loss of 0.09 dollar per diluted share.

Q2 to net sales expected to be flat

For the second quarter, the company expects net sales and comparable store sales to be flat to down in the low single-digit percentage range. Gross margin is expected to be up 250 to 300 basis points from the prior year’s second quarter rate. The company is expecting approximately 1 million dollars to 3 million dollars in operating income compared to 1.3 million dollars in the prior year, resulting in anticipated diluted earnings per share in the range of 0.01 dollar to 0.04 dollar.

During the second quarter, the Company expects to open one New York & Company store and two Outlet stores, remodel/refresh three New York & Company stores, and close five New York & Company stores, ending the second quarter with 461 stores, including 125 Outlet stores.

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