- Prachi Singh |
For the third quarter, net sales at RTW Retailwinds, Inc. declined to 200.1 million dollars, reflecting a 4 percent decrease in comparable store sales, and a net reduction in store count by 14 stores from the prior year third quarter, partially offset by an increase in sales from new businesses. Net loss for the quarter was 11.6 million dollars or a loss of 18 cents per diluted share compared to net income of 1.7 million dollars or earnings of 3 cents per diluted share, in the third quarter of fiscal year 2018.
Commenting on the third quarter trading, Gregory Scott, Chief Executive Office of RTW Retailwinds, said: “Overall, we were disappointed with our third quarter results as softness in our store channel contributed to our sales decrease and operating loss below our expectations. While our reads in October and early November were above our expectations, our Black Friday performance was disappointing due to traffic in our store channel. We were pleased that our Cyber Monday results. We anticipate improving margin rate over the prior year period reflecting our merchandise strategies and expect to drive positive growth across our digital businesses and Fashion to Figure brand in the fourth quarter.”
RTW Retailwind’s third quarter results and Q4 outlook
Gross profit as a percentage of net sales for the quarter decreased 460 basis points to 27.8 percent. Operating loss for the third quarter was 12.1 million dollars, inclusive of 5.8 million dollars of losses from the company’s new businesses, including a charge of 4.2 million dollars to exit Uncommon Sense. On a non-GAAP basis, adjusted operating loss was 7.5 million dollars as compared to non-GAAP adjusted operating income of 2.4 million dollars for the third quarter of fiscal year 2018.
For the fourth quarter, the company said, net sales are expected to be down in the mid to upper single-digit percentage range, reflecting the combination of reduced store count, and a comparable store sales decrease in the mid-single-digit range. Gross margin as a percentage of net sales is expected to decrease up to 150 basis points, primarily reflecting increased shipping costs with product margins flat to up slightly. Operating results for the fourth quarter are expected to reflect a loss in the range of 4 million dollars to 8 million dollars.
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