Maidenform Brands Inc. raised its full-year guidance after it posted an 87.7 percent jump in second-quarter profits boosted by strong sales gains in its wholesale channel.
The innerwear maker said Wednesday that for the period ended July 3, net income increased to $13.7 million, or 59 cents a diluted share, from $7.3 million, or 31 cents a share, in the year-ago quarter. Sales spiked 30.8 percent to $149.4 million for the quarter, versus $114.2 million in 2009. Analysts polled by Yahoo anticipated EPS of 47 cents on revenue of $136.9 million.
According to the company, wholesale sales expanded 35.3 percent to $134.9 million, driven by a 61.3 percent jump in revenue from mass merchants, which totaled $42.9 million. Sales at department stores improved 17.5 percent to $65.9 million. Sales in the retail segment were unchanged at $14.5 million, as quarterly same-store sales edged up 0.8 percent. Gross margin improved slightly to 36.2 percent of sales versus year-ago gross margin of 36 percent.
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“Although we are pleased with our year-to-date results, we remain cautious due to margin pressures in department and chain stores, slight deceleration of sales in retail and increasing costs in the supply chain,” chief executive officer Maurice Reznik said on the company call.
Reznik pointed to the “extremely underpenetrated” international business as a potential growth vehicle for the company. International sales expanded by 39 percent in the second quarter, the ceo said, noting that international growth strategies are expected to “drive double-digit increases in 2010 and beyond.”
Brean Murray, Carret & Co. analyst Eric Beder, who rates the company a “buy,” echoed management’s sentiment and added that Maidenform “stands to benefit from the industry’s shift to branded items, especially at department stores, and the consumer’s preference for new and innovative product.”
For the first half, income mushroomed 94.2 percent to $25.8 million, or $1.10 a diluted share, versus year-ago profit of $13.3 million, or 57 cents. Sales rose 28 percent to $292.3 million, from $228.4 million.
Maidenform projected third-quarter EPS of 50 cents to 55 cents a diluted share, while net sales are expected to be roughly $145.4 million to $149.3 million. As a result, the company forecasted full-year earnings of $1.88 to $1.93, up from prior projections of $1.75 to $1.80. Sales are anticipated to be in the range of approximately $545.5 million to $554.8 million. Analysts were looking for third-quarter EPS of 51 cents on sales of $137.4 million, and annual EPS of $1.81 on sales of $531.6 million.