Destination Maternity Reports Sales For October 2010

PHILADELPHIA, Nov. 4, 2010 /PRNewswire-FirstCall/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today reported that net sales for the month of October 2010 increased 2.6% to $45.5 million from $44.3 million reported for the month of October 2009.  Comparable retail sales data (which consists of comparable store sales and Internet sales) for the month of October 2010 and 2009 is included in the table below.

The increase in total reported sales for October 2010 compared to October 2009 resulted primarily from increased sales due to the October 2009 re-launch of the exclusive Two Hearts® Maternity collection in Sears® and Kmart® stores and the September/October 2010 expansion into additional Sears and Kmart locations, increased sales from the Company's licensed relationship, increased Internet sales and the increase in comparable store sales, partially offset by lower international sales.

Ed Krell, Chief Executive Officer and President of Destination Maternity, noted, "We are pleased to report positive comparable retail sales for October and to make continued progress in improving our sales performance, in spite of the continued difficult overall retail environment and unseasonably warm weather for the month.  Even after considering the effect of the calendar shift, our comparable retail sales were up approximately 0.8%.  Our sales for the month of October were in line with our expectations, and we achieved this sales performance with improved merchandise gross margin performance versus last year.  

"As we have indicated previously, we are keenly focused on initiatives to drive profitable sales growth, and in September and October we completed the planned expansion into 217 additional Sears and Kmart locations.  Among our other initiatives, the significant expansion of our maternity apparel leased department relationship with Macy's® will occur in February 2011, through which we will expand from our current 113 Macy's locations to over 615 Macy's locations throughout the United States, offering a mix of Motherhood Maternity® and A Pea in the Pod® branded merchandise.  This expansion with Macy's will deepen our position as the leading maternity apparel retailer in the world.  In addition, we are focused on continuing to enhance our merchandise assortments, merchandise presentation and customer experience."

During October 2010, the Company did not open any stores and closed four stores.  As of the end of October 2010, the Company operates 694 stores, 1,193 leased department locations and 1,887 total retail locations, compared to 722 stores, 976 leased department locations and 1,698 total retail locations operated at the end of October 2009.  The increase in leased department locations at the end of October 2010 versus the end of October 2009 predominantly reflects the opening of an additional 217 Sears and Kmart leased department locations in September and October 2010, with 168 of these locations having opened during October.

Days Adjustment Calendar 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, comparable retail sales and comparable store sales due to different days of the week typically contributing more sales than other days of the week.  For October 2010, there was one more Sunday and one less Thursday compared to October 2009.  The Company estimates this calendar shift favorably impacted its reported comparable retail sales for October 2010 by approximately 0.4 percentage points.  For October 2009, there was one more Saturday and one less Wednesday compared to October 2008.  The Company estimates this calendar shift favorably impacted its reported comparable retail sales for October 2009 by approximately 2.9 percentage points.

Destination Maternity Corporation is the world's largest designer and retailer of maternity apparel.  In the United States and Canada, as of October 31, 2010, Destination Maternity operates 1,887 retail locations, including 694 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 retail 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, 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 and through the Internet, 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, unanticipated 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, 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