Shares of women’s apparel retailer New York & Co. Inc. leaped 7 percent to $4.72 on Thursday after it swung to a profit from a year-ago loss in the fourth quarter.
The company, which credited its results to improved fashion as well as strict inventory and expense management, said that for the three months ended Jan. 30, net income totaled $2.5 million, or 4 cents a diluted share, versus a year-ago net loss of $27.4 million, or 46 cents a share. Adjusted net income from continuing operations, excluding pretax charges of $19 million, met analysts’ estimates of 6 cents a share.
Quarterly revenue slid 8.3 percent to $298 million, from $325.1 million, narrowly missing expectations of $301.7 million. Comparable-store sales fell 7.7 percent, as gross margin as a percentage of sales improved to 26.8 percent versus 18.8 percent a year ago. Selling, general and administrative expenses were reduced by 10.7 percent for the quarter to $74.6 million, from $83.5 million, and the company noted that inventory for the year declined by 15.1 percent versus 2008.
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“Our fourth-quarter results were in line with our expectations and were driven by a significant improvement in merchandise margin and the ongoing benefit of our cost reduction strategies,” chairman and chief executive officer Richard Crystal said on the conference call. “In fiscal 2010, we will increase our inventory commitment in key categories where we see opportunity including denim, streetwear, pants and weatherwear.”
The company said that to build sales, in addition to upping its inventory, it plans to open approximately 25 stores and remodel roughly eight locations. The retailer also expects to shutter 10 stores, ending the first half of fiscal 2010 with 591 stores.
The 576-door chain said that, in 2009, it narrowed its loss to $13.5 million, or 23 cents a diluted share, from $19.8 million, or 33 cents, a year earlier. Net sales shrank 11.7 percent to $1 billion from $1.1 billion.
The company did not provide earnings guidance, but said it anticipates comps for the first half to turn positive, reaching the low-single-digit range.