During the quarter, the Company accomplished the following:
- The Company’s eCommerce business produced strong results with sales increasing 22.6% from the year-ago period.
- Outlets continue to be a successful growth vehicle for the Company. During the quarter the Company opened nine Outlet stores.
- Gross profit as a percentage of net sales improved by 240 basis points versus the prior year, driven by improvements in product costs and leverage in buying and occupancy costs through continued expense reductions.
- Total quarter-end inventory declined by 13.5%, as compared to the end of last year’s first quarter. Inventory per average store at the end of the first quarter decreased 11.6%, as compared to the end of last year’s first quarter.
- The Company ended the quarter with $29.5 million of cash-on-hand and no outstanding borrowings under its revolving credit facility.
- The Company opened 10 new stores, including nine Outlet stores, remodeled four existing stores and closed one store, ending with 541 stores, including 35 Outlet stores, and 2.9 million selling square feet in operation.
- Comparable store sales for the second quarter of fiscal year 2012 are expected to be down slightly, and the Company expects to have five fewer stores in operation compared to the second quarter of fiscal year 2011.
- Gross margin is expected to increase between 300 and 400 basis points from the prior year’s rate primarily driven by improved product costs resulting in merchandise margin increases.
- Selling, general and administrative expenses as a percentage of net sales are expected to increase approximately 200 basis points versus the prior year’s second quarter reflecting investments in marketing, increases in variable based compensation, and incremental spending necessary to support the Company’s growing eCommerce and Outlet businesses.
- The Company expects the effective tax rate for the second quarter of fiscal year 2012 to be approximately 0%. As previously announced, the Company continues to provide for adjustments to the deferred tax valuation allowance initially recorded in the second quarter of fiscal year 2010, offsetting any future tax provisions or benefits resulting in an approximately 0% effective tax rate.
- The Company expects inventory at the end of the second quarter of fiscal year 2012 to be up by a low single-digit percentage versus the prior year. Inventory per average store is expected to be down throughout the second quarter but is expected to increase toward the end of the quarter to ensure the Company is in an appropriate inventory position entering the Fall season.
- Capital expenditures are expected to be approximately $6.0 million for the second quarter of fiscal year 2012, as compared to $3.7 million in the second quarter last year. Depreciation expense for the second quarter of fiscal year 2012 is estimated at $9.0 million.
- During the second quarter of fiscal year 2012, the Company expects to open six new Outlet stores, remodel five existing locations, and close nine stores, ending the second quarter of fiscal year 2012 with 538 stores, including 41 Outlet stores.
- The Company does not anticipate the need to borrow under its revolving credit facility during the second quarter of fiscal year 2012.
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 the Company believes are reasonable and relate to its 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; (ii) changes in the cost of raw materials, distribution services or labor; (iii) the potential for current economic conditions to negatively impact the Company's merchandise vendors and their ability to deliver products; (iv) the Company’s ability to open and operate stores successfully; (v) seasonal fluctuations in the Company’s business; (vi) the Company’s ability to anticipate and respond to fashion trends; (vii) the Company’s dependence on mall traffic for its sales; (viii) competition in the Company’s market, including promotional and pricing competition; (ix) the Company’s ability to retain, recruit and train key personnel; (x) the Company’s reliance on third parties to manage some aspects of its business; (xi) the Company’s reliance on foreign sources of production; (xii) the Company’s ability to protect its trademarks and other intellectual property rights; (xiii) the Company’s ability to maintain, and its reliance on, its information technology infrastructure; (xiv) the effects of government regulation; (xv) the control of the Company by its sponsors and any potential change of ownership of those sponsors; and (xvi) other risks and uncertainties as described in the Company’s documents filed with the SEC, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no obligation to revise the forward looking statements included in this press release to reflect any future events or circumstances.
|New York & Company, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited)|
|(Amounts in thousands, except per share amounts)||Three months ended April 28, 2012||% of net sales||Three months ended April 30, 2011||% of net sales|
|Cost of goods sold, buying and occupancy costs||163,186||71.7||%||177,364||74.1||%|
|Selling, general and administrative expenses||64,626||28.3||%||65,589||27.4||%|
|Interest expense, net of interest income||90||0.0||%||130||0.1||%|
|Loss before income taxes||(166||)||0.0||%||(3,729||)||(1.6||)%|
|Provision (benefit) for income taxes||45||0.1||%||(51||)||(0.1||)%|
|Basic loss per share||$||(0.00||)||$||(0.06||)|
|Diluted loss per share||$||(0.00||)||$||(0.06||)|
|Weighted average shares outstanding:|
|Basic shares of common stock||61,302||60,021|
|Diluted shares of common stock||61,302||60,021|
|Selected operating data:|
|(Dollars in thousands, except square foot data)|
|Comparable store sales (decrease) increase||(2.9||)%||2.5||%|
|Net sales per average selling square foot (a)||$||79||$||79|
|Net sales per average store (b)||$||424||$||432|
|Average selling square footage per store (c)||5,329||5,449|
|(a)||Net sales per average selling square foot is defined as net sales divided by the average of beginning and end of period selling square feet.|
|(b)||Net sales per average store is defined as net sales divided by the average of beginning and end of period number of stores.|
|(c)||Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores.|
|New York & Company, Inc. and Subsidiaries Condensed Consolidated Balance Sheets|
|(Amounts in thousands)||April 28, 2012||January 28, 2012||April 30, 2011|
|Cash and cash equivalents||$||29,481||$||50,787||$||35,072|
|Income taxes receivable||475||477||957|
|Other current assets||1,091||968||2,279|
|Total current assets||161,086||161,886||184,151|
|Property and equipment, net||112,408||115,280||136,903|
|Deferred income taxes||4,361||4,361||3,362|
|Liabilities and stockholders’ equity|
|Current portion – long-term debt||$||—||$||—||$||6,000|
|Income taxes payable||3,043||3,064||105|
|Deferred income taxes||4,361||4,361||3,362|
|Total current liabilities||130,842||134,868||136,970|
|Total stockholders’ equity||101,114||100,105||133,089|
|Total liabilities and stockholders’ equity||$||293,663||$||297,356||$||339,940|
|New York & Company, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)|
|(Amounts in thousands)||Three months ended April 28, 2012||Three months ended April 30, 2011|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization||8,735||9,894|
|Amortization of deferred financing costs||30||54|
|Share-based compensation expense||1,108||816|
|Changes in operating assets and liabilities:|
|Income taxes receivable||2||(430||)|
|Income taxes payable||(21||)||(155||)|
|Other assets and liabilities||(382||)||(729||)|
|Net cash used in operating activities||(15,508||)||(40,743||)|
|Net cash used in investing activities||(5,863||)||(2,226||)|
|Repayment of debt||—||(1,500||)|
|Proceeds from exercise of stock options||65||2,149|
|Net cash provided by financing activities||65||649|
|Net decrease in cash and cash equivalents||(21,306||)||(42,320||)|
|Cash and cash equivalents at beginning of period||50,787||77,392|
|Cash and cash equivalents at end of period||$||29,481||$||35,072|