Maidenform predicts 1Q loss; year view disappoints
ISELIN, N.J. (AP) — Maidenform's outlook for the year disappointed investors, and the company says it will make changes to the business as competition increases for some kinds of underwear and sales decline in its own stores.
It plans to get rid of some of its weaker businesses and products as it tries to return to profit growth. The company has been cutting jobs and has plans to close stores. It also expects to increase promotional spending to clear out merchandise, and predicted a first-quarter loss that surprised analysts.
Last year was a "disappointing year overall, with weak category, customer and consumer trends in our key markets, and increased shapewear competition in department and chain stores," said the underwear maker's CEO, Maurice Reznik, in a statement Wednesday. Shapewear is underwear meant to help slim one's appearance.
Shares fell more than 6 percent in Wednesday premarket trading.
For the three months ended Dec. 29, Maidenform Brands earned $5.5 million, or 24 cents per share. That compares with a loss of $3.1 million, or 13 cents per share a year ago. Excluding costs tied to job cuts and other items, earnings were 22 cents per share, matching expectations of analysts surveyed by FactSet.
Revenue rose 8.5 percent to $135.1 million from $124.5 million, topping Wall Street's forecast of $132.3 million. Revenue at Maidenform's own outlet stores fell nearly 3 percent to $14.3 million, with a metric tracking only established stores down 5.9 percent because of lower traffic. Sales to department stores and other retailers rose 10 percent to $120.8 million.
For all of 2012, profit was almost unchanged, at $33.5 million, or $1.43 per share. Revenue dipped 1 percent to $600.3 million.
Maidenform predicted a first-quarter loss of 5 cents to 10 cents per share and a revenue decline, to $137.5 million. Analysts were expecting a profit of 44 cents per share.
For the year, the company forecast a drop in earnings, to $1.20 to $1.30 per share with revenue in a range of $575 million to $595 million. Wall Street foresees earnings of $1.61 per share on revenue of $621.6 million.
Maidenform is aiming for revenue to rise by a mid-single-digit percentage and earnings per share to grow 10 percent or more per year starting in 2014.
Shares of Maidenform declined $1.22 to $17.45 before the market open. The stock has dropped 9.4 percent over the past 12 months.