New York & Company reports rise in Q2 comparable sales

New York & Company said that its second quarter net sales were 232.8 million dollars, as compared to 235.7 million dollars in the prior year. Comparable store sales increased 0.3 percent driven by strength in the company’s ecommerce business and increased royalty and related revenue from its new private label credit card agreement.

“Our second quarter results were highlighted by positive comp sales in line with our guidance and earnings at the high end of guidance. Our second quarter sales performance accelerated from the trend we experienced in Q1 and early May, which we attribute to more seasonal weather, enhanced flexibility within our go to market process, our targeted marketing efforts, and the ongoing benefits from our omni-channel and credit card loyalty initiatives,” said Gregory Scott, New York & company’s CEO.

Review of the second quarter results

Gross profit as a percentage of net sales increased 30 basis points to 28.8 percent against 28.5 percent last year reflecting benefits from the new private label credit card agreement, ongoing benefits of Project Excellence through reduced product costs, and a 90 basis point improvement in the leverage of buying and occupancy costs, partially offset by decreases in product margins.

GAAP net income was 0.9 million dollars or earnings per diluted share of 0.01 dollars compared to the prior year’s GAAP net loss of 0.1 million dollars or breakeven per diluted share.

The company opened one New York & Company store, remodelled two stores, and closed two New York & Company stores and one Outlet store during the second quarter, ending the second quarter with 486 stores, including 131 Outlet stores.

Expects flat to low single-digit rise in Q3 net sales

For the third quarter, the company expects net sales and comparable store sales to be flat to up in the low single-digit range. Gross margin is expected to be up by approximately 50 basis points to 150 basis points reflecting benefits from the new private label credit card agreement, reductions in product costs and agent expenses resulting from Project Excellence, and reductions in occupancy costs, partially offset by increased shipping costs associated with the growing omni-channel business.

While operating results on a GAAP basis for the third quarter are expected to reflect a loss, the company anticipates that the results will improve from the prior year operating loss of 4.9 million dollars.

During the third quarter, the company expects to open one New York & Company store and close three New York & Company stores, ending the quarter with 484 stores, including 131 Outlet stores. For the fourth quarter, the company expects to close between 20 and 25 stores, ending the year with between 459 and 464 stores, including approximately 125 Outlet stores.

Picture:New York & Company