New York & Company Q4 comparable sales increase 3 percent

New York & Company’s net sales were 278.7 million dollars compared to 266.3 million dollars in the prior year. Comparable store sales increased 3 percent largely driven by a double-digit percentage increase in the company’s ecommerce business, combined with increased royalty and related revenue from the private label credit card agreement. Net sales were 926.9 million dollars for fiscal year 2017 compared to 929.1 million dollars for fiscal year 2016. Comparable store sales increased 1 percent compared to a decrease of 0.7 percent in the prior fiscal year.

Commenting on the results, Gregory Scott, New York & Company’s CEO stated in a media release: “The fourth quarter was highlighted by a 3.0 percent increase in comparable sales, with positive traffic, expansion in gross margin and leverage in expenses. Combined, this led to GAAP operating profit of 5 million dollars, representing growth of 14.2 million dollars, as compared to the GAAP operating loss from the fourth quarter last year. For the full year 2017 we were pleased to generate almost 30 million dollars of EBITDA, which is up more than 21 million dollars to last year.”

Highlights of New York & Company’s Q4 performance

Gross profit as a percentage of net sales increased 210 basis points to 29.5 percent versus the fiscal year 2016 fourth quarter gross profit percentage of 27.4 percent, reflecting the highest gross margin rate achieved in the fourth quarter since 2006. The increase during the quarter reflects a 160 basis point improvement in the leverage of buying and occupancy costs and a 50 basis point increase in merchandise margin.

GAAP operating income improved to income of 5 million dollars, which included non-operating charges of 0.3 million dollars. Excluding the 0.3 million dollars of non-operating charges, adjusted non-GAAP operating income was 5.3 million dollars, compared to the prior year’s non-GAAP operating loss of 3 million dollars, which excluded 6.2 million dollars of non-operating charges.

GAAP net income for the quarter was 4.7 million dollars or earnings of 0.07 dollars per diluted share, as compared to the prior year’s GAAP net loss of 10 million dollars or a loss of 0.16 dollar per diluted share. On a non-GAAP basis, the company’s adjusted net income was 5 million dollars or earnings of 0.08 dollar per diluted share compared to prior year’s fourth quarter, non-GAAP adjusted net loss of 3.8 million dollars or a loss of 0.06 dollar per diluted share.

Review of New York & Company’s full year results

GAAP operating income for the year was 6.9 million dollars. On a non-GAAP basis, adjusted operating income was 7.7 million dollars compared to a GAAP operating loss of 15.4 million dollars and a non-GAAP, adjusted operating loss of 9.7 million dollars for fiscal year 2016.

EBITDA was 29.7 million dollars for the full fiscal year compared to 8.6 million dollars for fiscal year 2016 representing an improvement of 21.1 million dollars. On an adjusted basis, excluding the impact of non-operating charges of 0.8 million dollars in fiscal year 2017 and 5.7 million dollars in fiscal year 2016, adjusted EBITDA was 30.5 million dollars in fiscal year 2017 compared to 14.4 million dollars in fiscal year 2016.

Net income was 5.7 million dollars or earnings of 0.09 dollar per diluted share. On a non-GAAP basis, adjusted net income was 6.4 million dollars or earnings of 0.10 dollar per diluted share compared to the prior fiscal year net loss of 17.3 million dollars or a loss of 0.27 dollar per diluted share. On a non-GAAP basis, prior fiscal year adjusted net loss was 11.6 million dollars or a loss of 0.18 dollar per diluted share.

New York & Company projects outlook for Q1 and FY18

For the spring season, combined first and second quarter of fiscal year 2018, the company expects non-GAAP operating income to be in the range of 3 million dollars to 5 million dollars, excluding the impact of non-operating charges of 0.6 million dollars compared to the prior year non-GAAP operating income of 1.2 million dollars. Adjusted EBITDA for the spring season, excluding the severance charges is expected to be in the range of 15 million dollars to 17 million dollars compared to 12.8 million dollars for the prior spring season after excluding non-operating charges and benefits.

For the first quarter the company expects non-GAAP operating income to be in the range of 2 million dollars to 3 million dollars excluding the impact of non-operating charges of 0.6 million dollars primarily related to severance compared to a non-GAAP operating loss of 2.3 million dollars in the prior year. Adjusted EBITDA for the first quarter is expected to be in the range of 8 million dollars to 9 million dollars compared to 3.8 million dollars of adjusted EBITDA in the prior year period.

Net sales for the quarter are expected to increase in the low to mid-single-digit percentage range, reflecting the combined effect of the shift of the calendar due to the 53rd week in 2017, and growth in ecommerce sales, partially offset by a reduced store count. Comparable store sales, which are shifted to compare like calendar weeks, are expected to increase in the low single-digit percentage range. Gross margin on a GAAP basis is expected to be up 150 basis points to 200 basis points.

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