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New York & Company posts drop in Q2 revenue, comparable sales up 0.6 percent

By Prachi Singh

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Management |INTERACTIVE

For its second quarter, New York & Company, Inc. reported net sales of 216.4 million dollars compared to 224.1 million dollars in the prior year. The decrease in net sales, the company said, reflects a reduced store count and the shift of an important pre-Mother’s Day week into the first quarter and was partially offset by increased sales from Fashion to Figure. Comparable store sales increased 0.6 percent, led by growth in the company’s ecommerce business and strength in outlet stores, and in particular, outlet conversion stores.

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Commenting on the trading update, Gregory Scott, New York & Company’s CEO stated in a statement: “We were very pleased with our strong operating results in the second quarter with positive comparable store sales, expansion in gross margin and operating profit which significantly exceeded our guidance. I am excited about the opportunities that lie ahead and believe we remain well-positioned to continue our positive performance in the Fall season, which is further supported by our guidance that includes growth in operating income.”

New York & Company see positive spring season

For the spring season, the company said that it exceeded its most recent adjusted operating income guidance with GAAP operating income of 6.5 million dollars and non-GAAP operating income of 7.8 million dollars, as compared to 1.3 million dollars in GAAP operating income and 1.2 million dollars in non-GAAP operating income in the prior year period. Contributing to this strong performance was a comparable store sales increase of 1.7 percent for the season, margin expansion to the highest levels since 2005, and diligent management of expenses.

Gross profit as a percentage of net sales for the second quarter, increased 150 basis points to 32.1 percent versus fiscal year 2017 second quarter gross profit percentage of 30.6 percent, reflecting the highest gross margin rate achieved in the second quarter since 2005.

GAAP operating income was 3.1 million dollars compared to 5.2 million dollars in the prior year. Excluding non-operating adjustments, non-GAAP operating income was 3.5 million dollars, which the company added, exceeded its guidance of 0.7 million dollars to 1.7 million dollars and was flat to the prior year’s non-GAAP operating income of 3.5 million dollars.

GAAP net income for the second quarter was 3.1 million dollars or earnings of 0.05 dollar per diluted share compared to 4.8 million dollars or 0.08 dollar per diluted share in the prior year. On a non-GAAP basis, adjusted net income was 3.5 million dollars or 0.05 dollar per diluted share compared to 3.1 million dollars or 0.05 dollar per diluted share last year.

Ney York & Company expects low single-digit comparable sales growth for combined Q3 and Q4

For the fall season, combined third and fourth quarter of fiscal year 2018, the company expects comparable store sales to increase in the low single-digit range, leading to improvements in operating results. The company expects GAAP operating income to be in the range of 5.5 million dollars to 7.5 million dollars compared to the prior year GAAP operating income of 5.6 million dollars.

For the third quarter, the company is expecting GAAP operating income of 1 million dollars to 2 million dollars compared to 0.6 million dollars in the prior year. The third quarter guidance, the company said, reflects net sales increase in the low single-digit percentage range, reflecting benefits from the shift of the retail calendar, combined with growth in ecommerce sales, partially offset by a reduced store count.

Comparable store sales, which are shifted to compare like calendar weeks, are expected to increase in the low single-digit percentage range, driven by celebrity collaborations, the introduction of Kate Hudson for Soho Jeans Collection and growth in the digital business. Gross margin on a GAAP basis is expected to increase by 50 to 150 basis points.

Picture credit:New York & Company

New York & Company