New York 8-K 2009
FINAL: For Release
NEW YORK & COMPANY, INC. ANNOUNCES FIRST
QUARTER 2009 RESULTS, IN LINE
New York, New York May 21, 2009 New York & Company, Inc. [NYSE:NWY], a specialty apparel chain with 588 retail stores, today announced results for the first quarter ended May 2, 2009. For the first quarter of fiscal year 2009, net sales were $232.9 million, as compared to $270.1 million for the first quarter of fiscal year 2008. Comparable store sales for the first quarter of fiscal year 2009 decreased 15.0%, compared to a 6.6% decrease in the prior year first quarter. Net loss from continuing operations for the first quarter of fiscal year 2009 was $4.9 million, or $0.08 per diluted share, as compared to prior year net income from continuing operations of $6.7 million, or $0.11 per diluted share.
Richard P. Crystal, New York & Companys Chairman and CEO, stated: While our first quarter results were in line with our expectations and included solid progress toward achieving our merchandising, expense and inventory management goals, our top line sales performance was disappointing. Our performance for the quarter did, however, reflect dramatic improvements in margin versus the fourth quarter. As we look ahead, the environment remains challenging and while we believe our assortments are fashion right, we continue to see customers reluctant to purchase at regular price. We remain on track to achieve our expense reduction plans, and we will continue to implement the strategies that have proven successful this quarter while capitalizing on opportunities to improve the trend in certain areas of our business such as our casual segment. Although we have conservatively planned for the Spring season, based upon the consumers ongoing preference toward buying on discount versus regular price, we have tempered our expectations for the second quarter. We remain confident in our strategies and continue to reinforce our fashion value message and we expect our initiatives will position us for sustained long term growth and increased value for our shareholders when our customer is once again comfortable spending on herself.
During the quarter, the Company achieved the following significant accomplishments:
· Net sales at the Companys E-commerce store increased by more than 12% during the quarter, on top of a significant increase in the prior year.
· The accessories business continued to improve during the quarter and delivered positive comparable store sales.
· Inventory remains under tight control with apparel units per average store down approximately 8% compared to the prior year quarter end. On a cost basis, total inventory increased slightly due to a shift in the timing of our Summer floorset, which now sets prior to Memorial Day and as a result, in-transit inventory at quarter end has increased significantly to support the earlier floorset.
· Selling, general and administrative expenses declined by 8.3% on an average store basis, reflecting the positive impact of the Companys restructuring program launched in January 2009.
· The Company ended the quarter with $31 million of cash-on-hand and no outstanding borrowings under its revolving credit facility.
The Company believes that the economic environment will remain challenging and continues to plan conservatively for fiscal year 2009. As a result, the Company will limit its future outlook to one quarter and as such will provide earnings guidance for the second quarter of fiscal year 2009, along with guidance on certain key financial metrics.
· Based on the softness in sales experienced during the Mothers Day selling period, the Company has tempered its expectations for the second quarter, and now expects the comparable store sales trend for the second quarter to be similar to the trend experienced in the first quarter.
· Gross margins are expected to be similar to the first quarter of fiscal year 2009, but are expected to decline compared to the second quarter last year as consumers continue to be price sensitive and hold back spending while looking for value.
· Selling, general and administrative expenses per average store will continue to decrease as compared to last year, reflecting the success of the Companys restructuring program which remains on track.
· The Company currently expects a loss per diluted share in the second quarter of fiscal year 2009 similar to the loss incurred during the first quarter. This compares to actual second quarter of fiscal year 2008 earnings per diluted share of $0.14.
· Inventory will continue to be managed tightly with goods available for sale per average store down in the high single-digits on a percentage basis versus the prior year. In-store inventory is expected to be down 10% to 15% per average store at the end of the second quarter.
· Cash-on-hand at the end of the second quarter is expected to be approximately $50 million and is expected to increase during the second half of the year.
· The Company has no outstanding borrowings under its revolving credit facility and does not anticipate the need to use the facility during the second quarter.
· During fiscal year 2009, the Company plans to open approximately three new stores, remodel four existing locations, and close 10 to 15 stores, ending the year with 577 to 582 stores. Capital expenditures are expected to be $15 million for the full fiscal year versus $45 million in fiscal year 2008. Depreciation expense is estimated at $42 million.
As previously announced, the Companys Board of Directors has authorized the repurchase of up to 3,750,000 shares over a 12-month period ending in November 2009. As of May 2, 2009, the Company has repurchased 142,400 shares under this program. Repurchases, if any, will be made from time to time in a manner the Company believes is appropriate through open market or private transactions including through pre-established trading plans.
Conference Call Information
A conference call to discuss the first quarter of fiscal year 2009 results is scheduled for today Thursday, May 21, 2009 at 8:00 am Eastern Daylight Time. Investors and analysts interested in participating in the call are invited to dial 800-922-9655, referencing conference ID number 99284177, approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at www.nyandcompany.com. A replay of this call will be available until midnight on May 28, 2009 and can be accessed by dialing 800-642-1687 and entering conference ID number 99284177 and pin: 1079.
Integrated Corporate Relations
Investor: Allison Malkin
Media: Kellie Baldyga
Forward Looking Statements: This press release contains certain forward looking statements. Some of these statements can be identified by terms and phrases such as anticipate, believe, intend, estimate, expect, continue, could, may, plan, project, predict, and similar expressions and include references to assumptions that we believe are reasonable and relate to our future prospects, developments and business strategies. Such statements are subject to various risks and uncertainties that could cause actual results to differ materially. These include, but are not limited to: (i) the impact of general economic conditions and their effect on consumer confidence and spending patterns, which have recently deteriorated significantly and may continue to do so for the foreseeable future; (ii) our ability to successfully integrate our restructuring and cost reduction program; (iii) the deteriorating economic conditions could negatively impact the Companys merchandise vendors and their ability to deliver products; (iv) our ability to open and operate stores successfully; (v) seasonal fluctuations in our business; (vi) our ability to anticipate and respond to fashion trends; (vii) our dependence on mall traffic for our sales; (viii) competition in our market, including promotional and pricing competition; (ix) our ability to retain, recruit and train key personnel; (x) our reliance on third parties to manage some aspects of our business; (xi) our reliance on foreign sources of production; (xii) our ability to protect our trademarks and other intellectual property rights; (xiii) our ability to maintain, and our reliance on, our information technology infrastructure; (xiv) the effects of government regulation; (xv) the control of the company by our sponsors and any potential change of ownership of those sponsors; and (xvi) other risks and uncertainties as described in our documents filed with the SEC, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to revise the forward looking statements included in this press release to reflect any future events or circumstances.
About New York & Company, Inc.
New York & Company, Inc., founded in 1918, is a leading specialty retailer of fashion oriented, moderately priced womens apparel. The Companys proprietary branded New York & Company merchandise is sold exclusively through its national network of retail stores and E-commerce store at www.nyandcompany.com. The Company currently operates 588 stores in 44 states. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Companys website: www.nyandcompany.com.
New York & Company, Inc. and
New York & Company, Inc. and
New York & Company, Inc. and Subsidiaries