Destination Maternity Reports Sales for April 2010

PHILADELPHIA, May 6 /PRNewswire-FirstCall/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today reported that net sales for the month of April 2010 decreased 2.2% to $48.8 million from $49.9 million reported for the month of April 2009.  Comparable store sales for the month of April 2010 decreased 6.3% on a reported basis and decreased approximately 7.3% after adjusting for the "days adjustment calendar shift," which the Company estimates helped its reported comparable store sales by approximately 1 percentage point.  For April 2009 the Company's comparable store sales decreased 1.2% on a reported basis, and decreased approximately 3.2% after adjusting for the Easter-related calendar timing shift, which the Company estimates helped its reported comparable store sales by approximately 2 percentage points.  The decrease in total reported sales for April 2010 compared to April 2009 resulted primarily from the decrease in comparable store sales, partially offset by increased leased department sales due to the re-launch of the exclusive Two Hearts® Maternity collection in Sears® and Kmart® stores in October 2009 and, to a lesser extent, increased international sales and Internet sales.

Ed Krell, Chief Executive Officer of Destination Maternity, noted, "Our April sales results were somewhat weaker than originally planned.  Our reported comparable store sales decrease of 6.3% for the month was within our guidance range of down 5.0% to 6.5%, which we provided in our April 28, 2010 press release.  Although our sales trend deteriorated in the latter part of April compared to the earlier part of April, our sales trend has improved in the first few days of May.  Also, it is important to note that our inventory remains in good control and our merchandise gross margin this April was higher than last April.  

"As we have indicated previously, although we are pleased with our continued progress in improving the profitability of our company, by no means are we satisfied or complacent, especially with regard to our sales performance, and we are keenly focused on initiatives to drive profitable sales growth, as evidenced by the re-launch of our business with Sears, the expansion of our international business, the increased focus on our Internet business, and the introduction in February of our two new exclusive maternity apparel lines with supermodel Heidi Klum, Lavish By Heidi Klum™ for A Pea in the Pod® and Loved By Heidi Klum™ for Motherhood®."

During April 2010, the Company opened one Destination Maternity® multi-brand store and closed two stores, including one store closing related to the Destination Maternity store opening.  As of the end of April 2010, the Company operates 708 stores, 978 leased department locations and 1,686 total retail locations, compared to 733 stores, 355 leased department locations and 1,088 total retail locations operated at the end of April 2009.  The increase in leased department locations at the end of April 2010 versus the end of April 2009 predominantly reflects the opening of 623 Sears and Kmart leased department locations in connection with the October 2009 re-launch of the Two Hearts Maternity collection.

Days Adjustment Calendar Shift and Easter Timing Shift

Destination Maternity reports sales on a calendar month basis, rather than on a "4-5-4 retail fiscal calendar" where each fiscal week and fiscal month starts on a Sunday and ends on a Saturday.  Thus, for each calendar month, there is a "days adjustment calendar shift" which may help or hurt reported calendar month sales and comparable store sales due to different days of the week typically contributing more sales than other days of the week.  For April 2010, there was one more Friday and one less Wednesday compared to April 2009.  The Company estimates this calendar shift favorably impacted its reported comparable store sales for April 2010 by approximately 1 percentage point.  For April 2009, there was one more Thursday and one less Tuesday compared to April 2008, which did not have a significant impact on reported sales.  However, in 2009 Easter fell in April (April 12, 2009) compared to March in 2008 (March 23, 2008), and the Company estimates that this Easter timing shift favorably impacted its reported comparable store sales for April 2009 by approximately 2 percentage points.

Destination Maternity Corporation is the world's largest designer and retailer of maternity apparel.  In the United States and Canada, as of April 30, 2010, Destination Maternity operates 1,686 retail locations, including 708 stores, predominantly under the tradenames Motherhood Maternity®, A Pea in the Pod®, and Destination Maternity®, and sells on the web through its DestinationMaternity.com and brand-specific websites.  Destination Maternity also distributes its Oh Baby by Motherhood® collection through a licensed arrangement at Kohl's® stores throughout the United States and on Kohls.com.  In addition, Destination Maternity is expanding internationally and has entered into exclusive store franchise and product supply relationships in India and the Middle East.

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or made from time to time by management of the Company, including those regarding net sales, comparable store sales, other results of operations, liquidity and financial condition, and various business initiatives, involve risks and uncertainties, and are subject to change based on various important factors.  The following factors, among others, in some cases have affected and in the future could affect the Company's financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any such forward-looking statements: the continuation of economic recovery of the retail industry in general and of apparel purchases in particular, our ability to successfully manage our various business initiatives, our ability to successfully implement our merchandise brand and retail nameplate restructuring, the success of our international expansion, our ability to successfully manage and retain our leased department and licensed relationships and marketing partnerships, future sales trends in our existing store base, unusual weather patterns, changes in consumer spending patterns, raw material price increases, overall economic conditions and other factors affecting consumer confidence, demographics and other macroeconomic factors that may impact the level of spending for maternity apparel,  expense savings initiatives, our ability to anticipate and respond to fashion trends and consumer preferences, anticipated fluctuations in our operating results, the impact of competition and fluctuations in the price, availability and quality of raw materials and contracted products, availability of suitable store locations, continued availability of capital and financing, goodwill impairment charges, our ability to hire and develop senior management and sales associates, our ability to develop and source merchandise, our ability to receive production from foreign sources on a timely basis, potential stock repurchases, potential debt prepayments, changes in market interest rates, war or acts of terrorism and other factors set forth in the Company's periodic filings with the Securities and Exchange Commission, or in materials incorporated therein by reference.

SOURCE Destination Maternity Corporation