(Updated) Mothers Work shares, sales fall
(Adds analyst comments in paragraph 6)
Shares of Mothers Work, Inc. (Nasdaq: MWRK) are sagging on news the Philadelphia, Pa.-based retailer of maternity apparel saw its May same-store sales decline 3.6%.
Comparable store sales (sales at store open more than one year) fell 3.6% in May, compared with an increase of 5.5% in the same month of 2006, the company announced before the opening bell. That resulted in a 4% decline in net sales to $54.1 million, compared with $56.3 million during May of 2006.
“Our sales for May were weaker than we had planned and we attribute this primarily to an overall difficult economic and retail environment,” President and Chief Creative Officer Rebecca Matthias said. She added that weaker sales were partially attributed to the “negative impact from the current popularity of certain styles in the non-maternity women’s apparel market.”
Mothers Work operated 792 stores, 820 leased department locations and 1,612 total retail locations as of the end of May, compared with 818 stores, 727 leased department locations and 1,545 total retail locations operated at the end of May 2006.
Looking ahead, Matthias said she believes Mother Work can manage its inventory levels without resorting to excessive markdown levels, even though the company has increased its planned markdown levels somewhat in response to our weaker-than-expected sales.
“I don’t expect the negative trends to go away soon,” said Ian Corydon, a senior analyst with investment bank B. Riley & Co. “Store inventories have been ticking up, which could lead to price decreases if same-store sales stay below expectations.” Corydon maintained his “Neutral” rating on the company’s stock.
Also, Mothers Work said it expects to continue opening new stores and raise its sales and gross margins while increasing earnings from some of its marketing partnerships. The company did not disclose specific financial information.
At 3:11 p.m. ET shares were down $2.04, or 6%, to $33.86. The 52-week high is $57.65, established on Nov. 21, 2006. The 52-week low of $27.51 was set on June 13, 2006.
