$2.8 million of non-recurring charges drove net loss higher from a year ago quarter at speciality apparel retailer, New York & Company, in the third quarter ended November 1, 2014.
New York & Company said GAAP net loss for the third quarter of 2014 was $9.7 million, or a loss of $0.15 per diluted share as against prior year’s GAAP net loss of $3.4 million, or a loss of $0.05 per diluted share.
According to the NYSE-listed retailer, it incurred $2.8 million of non-recurring charges, including $1.0 million of duplicative rent expense related to the relocation of the Company’s corporate headquarters.
In addition it reported $0.8 million of certain severance and recruiting expenses and $1.0 million of consulting expenses associated with a cost savings program initiated during the third quarter of 2014.
This resulted in $2.8 million of expenses being charged to selling, general and administrative expenses, increasing operating loss and net loss for the third quarter of 2014.
New York & Company which operates 512 retail stores posted net sales at $210.3 million in the quarter under review, down from $217.6 million in corresponding quarter of 2013.
Comparable store sales decreased 3.4 per cent against an increase of 3.0 per cent in the third quarter of 2013.
Gross profit as a percentage of net sales fell 80 basis points versus the prior year period, from hike in promotional activity, higher freight costs and a deleverage of fixed store occupancy costs.
Selling, general and administrative expenses on a GAAP basis increased by approximately $2.6 million, as compared to the same quarter of 2013.
While, on a non-GAAP basis, selling, general and administrative expenses were essentially flat to the year-ago period.
GAAP operating loss touched $9.5 million in the reporting quarter. On a non-GAAP basis, adjusted operating loss was $6.7 million, as compared to the prior year’s third quarter GAAP operating loss of $3.1 million.
Total quarter-end inventory increased 1.4 per cent from last year’s third quarter, reflecting slightly higher levels of in-store inventory, partially offset by lower levels of in-transit inventory.
Capital spending for the third quarter of fiscal year 2014 was $10.3 million, as compared to $5.6 million in the previous year’s third quarter.
“Hike in capex primarily reflects remodelling of six New York & Company stores and the opening of six new stores, including five Outlet stores,” the retailer explained.
It opened six new stores and closed three stores, ending with 512 stores, including 62 Outlet stores, and 2.6 million selling square feet in operation during the third quarter.
The Company ended the quarter with $57.7 million of cash and no outstanding borrowings under its revolving credit facility, as compared to $37.4 million in cash at the end of last year’s third quarter. (AR)