Destination Maternity reports sales of $92.8 mn in Q3

Comparable sales for Q3 of fiscal 2018 decreased 2.6 per cent, compared to an increase of 1.1 per cent in Q3 of fiscal 2017.Gross margin for Q3 FY2018 was 52.4 per cent, a decrease of 40 basis points from the comparable prior year gross margin, said a media release by Destination Maternity.

“Our Q3 illustrate our continued discipline in right-sizing the organisation, rationalising expenses and improving profitability as part of our multi-year strategic plan,” said Marla Ryan, chief executive officer of Destination Maternity. “SG&A expenses in Q3 declined 8.7 per cent year-over-year, and adjusted EBITDA before other charges improved 95 per cent over the prior year period due to ongoing cost management efforts.”

“During Q3, we also continued to manage the business for long term profitability, focusing on strengthening profitability rather than driving revenue in the short term. This was especially true in our e-commerce division where we are tightly managing expenses to grow profits in our digital flagship. While total e-commerce revenues were flat compared to the prior year, excluding 3rd party e-commerce sites, sales were up 8 per cent. Total e-commerce product gross margins also improved by 230 basis points versus last year. Mobile sales were also strong, up 29 per cent year-over-year, representing 54 per cent of total online sales in Q3.”

“Our brick and mortar sales remain sluggish as we continue to shutter unprofitable stores and aggressively manage our long-term inventory position through increased markdowns and promotional activity. In the short-term, we expect inventory levels will be higher than optimal. While this negatively impacts margins, right sizing inventory and our store portfolio will create a leaner organisation, better positioning us for future growth. We expect to generate $7 million in cash flow from working capital in FY 2019 from our on-going inventory reduction efforts,” added Ryan. (PC)

Fibre2Fashion News Desk – India