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Share Name | Share Symbol | Market | Type |
---|---|---|---|
New York & Company New York & Company, Inc. | NYSE:NWY | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 3.50 | 0.00 | 01:00:00 |
~ Comparable Store Sales Increase 0.2% for the Third Quarter ~
~ GAAP Operating Income of $1.6 Million Increasing from $0.6 Million in Third Quarter Last Year ~
~ Non-GAAP Operating Income of $2.4 Million Exceeds Guidance of $1 Million to $2 Million ~
~ Reports $7.6 Million in Non-GAAP EBITDA for Third Quarter ~
~ Reports $83.7 Million in Cash with no Debt Outstanding ~
RTW Retailwinds, Inc. [NYSE:RTW], formerly known as New York & Company, Inc. [NYSE:NWY], an omni-channel specialty apparel retail platform for powerful celebrity and consumer brands, today announced results for the third fiscal quarter of 2018 representing the 13-weeks ended November 3, 2018. Due to the 53-week year in fiscal 2017 the prior year third quarter ended October 28, 2017.
Gregory Scott, RTW Retailwinds, Inc. CEO stated: “We are pleased to see continued favorable momentum in our business with the third quarter highlighted by an increase in comparable store sales, expansion in gross margin and expense discipline, which drove operating income that met our guidance. The sustained positive performance of our business reflects the success of our differentiated market position supported with our celebrity collaborations, sub-brands, and omni-channel operating platform. Additionally, in changing our name to RTW Retailwinds, we’re establishing a strong and distinct corporate identity which reflects our evolution into one of the largest specialty women’s omni-channel and digitally enabled retailers with a powerful multi-brand lifestyle platform poised for growth. We continue to execute across our 2018 strategic initiatives and we believe our longstanding Eva Mendes and Gabrielle Union collaborations, along with the 2019 Kate Hudson and intimates launches, will bring more excitement, awareness and interest to our customers.”
Commenting on fourth quarter, Mr. Scott added: “Despite a soft start in November, we were pleased with Black Friday week which matched last year’s performance and culminated with a record-breaking Cyber Monday. While our revised Fall Season guidance reflects performance through Cyber Monday and our expectation for the balance of the quarter, key holiday shopping weeks are ahead of us, and we are encouraged by the comp improvement in our recent trend, which is reflected in our comp and operating income expectations.”
Third Quarter Fiscal Year 2018 Results (13-week period ended November 3, 2018 compared to the 13-week period ended October 28, 2017):
Third Quarter
As it relates to the third quarter of fiscal year 2018, the Company noted the following:
Please refer to the “Reconciliation of GAAP to Non-GAAP Financial Measures” in Exhibits 5 and 6 of this press release, which delineate the non-operating adjustments for the three and nine months ended November 3, 2018 and October 28, 2017. GAAP is defined as Generally Accepted Accounting Principles in the United States.
Other Financial and Operational Highlights:
Outlook:
Regarding expectations for fiscal year 2018, the Company continues to focus on improving its operating results to drive increases in both annual operating income and EBITDA. As previously disclosed, fiscal year 2017 included an extra week in the traditional retail calendar, which contributed approximately $12 million of sales and related margin to the prior year results. As such, the 2018 Fall season and more specifically, the fourth quarter includes one less week of sales than the prior year period. As the Company enters the holiday season, the combined effects of one less week, a shift in the calendar resulting from the 53rd week in 2017 and the new revenue recognition accounting standard will impact the overall Fall and fourth quarter, and as such, the Company is providing commentary on the overall Fall season, which combines the third and fourth quarters of fiscal year 2018, in addition to more detailed commentary on fourth quarter financial metrics.
For the Fall season, combined third and fourth quarter of fiscal year 2018, the Company expects comparable store sales to be approximately flat. The Company expects GAAP operating income to be in the range of $2.5 million to $4.5 million, inclusive of approximately $3 million of non-operating expenses including $1 million of charges reported as non-GAAP adjustments, and new business start-up costs of $2 million, as compared to our prior guidance of $5.5 million to $7.5 million.
For the fourth quarter, the Company is expecting GAAP operating income of $1 million to $3 million, as compared to a GAAP operating income of $5.0 million in the prior year.
The fourth quarter guidance reflects the following:
Additional Outlook:
Comparable Store Sales:
A store is included in the comparable store sales calculation after it has completed 13 full fiscal months of operations from the store's opening date or once it has been reopened after remodeling if the gross square footage did not change by more than 20%. Sales from the Company's eCommerce store, including Fashion to Figure eCommerce sales, and private label credit card royalties and related revenue are included in comparable store sales. Fashion to Figure retail locations are not included in comparable store sales calculations until they complete 13 full fiscal months of operation. In addition, in a year with 53 weeks, sales in the last week of the year are not included in determining comparable store sales.
Conference Call Information
A conference call to discuss third quarter results is scheduled for today, Thursday, November 29, 2018 at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-0784 and reference conference ID number 13685036 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.nyandcompany.com. A replay of this call will be available at 7:30 p.m. Eastern Time on November 29, 2018 until 11:59 p.m. Eastern Time on December 6, 2018 and can be accessed by dialing (844) 512-2921 and entering conference ID number 13685036.
As a supplement to this press release, slides with information regarding the third quarter results and outlook for fourth quarter 2018 will also be available at: www.nyandcompany.com at approximately 4:20 p.m. Eastern Time on Thursday, November 29, 2018.
About RTW Retailwinds
RTW Retailwinds, Inc. (formerly known as New York & Company, Inc.) is a specialty women’s omni-channel and digitally enabled retailer with a powerful multi-brand lifestyle platform providing curated lifestyle solutions that are versatile, on-trend, and stylish at a great value. The specialty retailer, first incorporated in 1918, has grown to now operate 428 retail and outlet locations in 36 states while also growing a substantial eCommerce business. The Company’s portfolio includes branded merchandise, from New York & Company, Fashion to Figure, and collaborations with Eva Mendes, Gabrielle Union and Kate Hudson. Its branded merchandise is sold exclusively at its retail and outlet locations and online at www.nyandcompany.com. Additionally, certain product, press releases and SEC filing information concerning the Company are available at the Company's website: www.nyandcompany.com.
Forward-looking Statements
This press release contains certain forward-looking statements, including statements made within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Some of these statements can be identified by terms and phrases such as “expect,” “anticipate,” “believe,” “intend,” “estimate,” “continue,” “could,” “may,” “plan,” “project,” “predict,” and similar expressions and references to assumptions that the Company believes are reasonable and relate to its future prospects, developments and business strategies. Such statements, including information under “Outlook” and “Additional Outlook” above, are subject to various risks and uncertainties that could cause actual results to differ materially. These include, but are not limited to: (i) the Company’s dependence on mall traffic for its sales and the continued reduction in the volume of mall traffic; (ii) the Company’s ability to anticipate and respond to fashion trends; (iii) the impact of general economic conditions and their effect on consumer confidence and spending patterns; (iv) changes in the cost of raw materials, distribution services or labor; (v) the potential for economic conditions to negatively impact the Company's merchandise vendors and their ability to deliver products; (vi) the Company’s ability to open and operate stores successfully; (vii) seasonal fluctuations in the Company’s business; (viii) competition in the Company’s market, including promotional and pricing competition; (ix) the Company’s ability to retain, recruit and train key personnel; (x) the Company’s reliance on third parties to manage some aspects of its business; (xi) the Company’s reliance on foreign sources of production; (xii) the Company’s ability to protect its trademarks and other intellectual property rights; (xiii) the Company’s ability to maintain, and its reliance on, its information technology infrastructure; (xiv) the effects of government regulation; (xv) the control of the Company by its largest shareholder and any potential change of ownership of the Company including the shares held by its largest shareholder; and (xvi) other risks and uncertainties as described in the Company’s documents filed with the SEC, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. The Company undertakes no obligation to revise the forward-looking statements included in this press release to reflect any future events or circumstances.
Exhibit (1)
RTW Retailwinds, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands, except per share amounts) Three monthsendedNovember 3, 2018
% ofnet sales Three monthsendedOctober 28, 2017
% ofnet sales Net sales $ 210,758 100.0 % $ 214,182 100.0 % Cost of goods sold, buying and occupancy costs 142,383 67.6 % 146,584 68.4 % Gross profit 68,375 32.4 % 67,598 31.6 % Selling, general and administrative expenses 66,802 31.7 % 66,980 31.3 % Operating income 1,573 0.7 % 618 0.3 % Net interest (income) expense (258) (0.1) % 161 0.1 % Income before income taxes 1,831 0.8 % 457 0.2 % Provision for income taxes 106 — % 105 — % Net income $ 1,725 0.8 % $ 352 0.2 % Basic earnings per share $ 0.03 $ 0.01 Diluted earnings per share $ 0.03 $ 0.01 Weighted average shares outstanding: Basic shares of common stock 63,940 63,242 Diluted shares of common stock 66,289 64,099 Selected operating data: (Dollars in thousands, except square foot data) Comparable store sales increase 0.2 % 2.2%
Net sales per average selling square foot (a) $ 99 $ 93 Net sales per average store (b) $ 495 $ 467 Average selling square footage per store (c) 4,987 5,026 Ending store count 428 459
(a)
Net sales per average selling square foot is defined as net sales divided by the average of beginning and monthly end of period selling square feet.
(b)
Net sales per average store is defined as net sales divided by the average of beginning and monthly end of period number of stores.
(c)
Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores.
Exhibit (2)
RTW Retailwinds, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands, except per share amounts) Nine monthsendedNovember 3, 2018
% ofnet sales Nine monthsendedOctober 28, 2017
% ofnet sales Net sales $ 645,957 100.0 % $ 648,155 100.0 % Cost of goods sold, buying and occupancy costs 438,247 67.8 % 447,574 69.1 % Gross profit 207,710 32.2 % 200,581 30.9 % Selling, general and administrative expenses 199,605 30.9 % 198,659 30.6 % Operating income 8,105 1.3 % 1,922 0.3 % Net interest (income) expense (453) (0.1) % 678 0.1 % Loss on extinguishment of debt 239 — % — — % Income before income taxes 8,319 1.4 % 1,244 0.2 % Provision for income taxes 441 0.2 % 316 0.1 % Net income $ 7,878 1.2 % $ 928 0.1 % Basic earnings per share $ 0.12 $ 0.01 Diluted earnings per share $ 0.12 $ 0.01 Weighted average shares outstanding: Basic shares of common stock 63,738 63,213 Diluted shares of common stock 65,979 63,842 Selected operating data: (Dollars in thousands, except square foot data) Comparable store sales increase 1.2%
0.1 % Net sales per average selling square foot (a) $ 301 $ 279 Net sales per average store (b) $ 1,502 $ 1,406 Average selling square footage per store (c) 4,987 5,026
(a)
Net sales per average selling square foot is defined as net sales divided by the average of beginning and monthly end of period selling square feet.
(b)
Net sales per average store is defined as net sales divided by the average of beginning and monthly end of period number of stores.
(c)
Average selling square footage per store is defined as end of period selling square feet divided by end of period number of stores.
Exhibit (3)
RTW Retailwinds, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Amounts in thousands) November 3, 2018 February 3, 2018* October 29, 2017 (Unaudited) (Unaudited) Assets Current assets: Cash and cash equivalents $ 83,662 $ 90,908 $ 69,235 Accounts receivable 14,134 12,528 16,242 Income taxes receivable 55 115 115 Inventories, net 121,586 84,498 125,604 Prepaid expenses 16,894 16,447 17,648 Other current assets 2,308 1,924 2,587 Total current assets 238,639 206,420 231,431 Property and equipment, net 65,292 77,906 78,796 Intangible assets 16,891 17,125 14,879 Other assets 1,411 1,505 1,635 Total assets $ 322,233 $ 302,956 $ 326,741 Liabilities and stockholders’ equity Current liabilities: Current portion—long-term debt $ — $ 841 $ 841 Accounts payable 107,231 70,089 105,419 Accrued expenses 66,487 70,677 61,714 Income taxes payable 16 28 — Total current liabilities 173,734 141,635 167,974 Long-term debt, net of current portion — 10,644 10,854 Deferred rent 25,623 27,217 28,192 Other liabilities 32,226 36,599 38,498 Total liabilities 231,583 216,095 245,518 Total stockholders’ equity 90,650 86,861 81,223 Total liabilities and stockholders’ equity $ 322,233 $ 302,956 $ 326,741* Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018.
Exhibit (4)
RTW Retailwinds, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
Nine monthsended
November 3, 2018
Nine monthsended
October 28, 2017
Operating activities Net income $ 7,878 $ 928 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 15,833 16,354 Loss from impairment charges 486 611 Amortization of intangible assets 234 — Amortization of deferred financing costs 49 142 Write-off of unamortized deferred financing costs 239 — Share-based compensation expense 1,997 1,756 Changes in operating assets and liabilities: Accounts receivable (1,981) (4,455) Income taxes receivable 60 29 Inventories, net (37,088) (47,560) Prepaid expenses (447) 1,098 Accounts payable 37,142 37,351 Accrued expenses (10,202) (7,872) Income taxes payable (12) (174) Deferred rent (1,594) (1,847) Other assets and liabilities (3,131) (4,978) Net cash provided by (used in) operating activities 9,463 (8,617) Investing activities Capital expenditures (3,705) (7,794) Insurance recoveries 375 50 Net cash used in investing activities (3,330) (7,744) Financing activities Repayment of long-term debt (11,750) (750) Principal payments on capital lease obligations (1,320) (1,199) Repurchase of treasury stock — (622) Shares withheld for payment of employee payroll taxes (309) (202) Net cash used in financing activities (13,379) (2,773) Net decrease in cash and cash equivalents (7,246) (19,134) Cash and cash equivalents at beginning of period 90,908 88,369 Cash and cash equivalents at end of period $ 83,662 $ 69,235 Non-cash capital lease transactions $ — $ 818Exhibit (5)
RTW Retailwinds, Inc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Measures(Unaudited)
A reconciliation of the Company’s GAAP to non-GAAP financial statement information for the three months ended November 3, 2018 and October 28, 2017 is indicated below. This information reflects, on a non-GAAP basis, the Company’s adjusted operating results after excluding certain non-operating adjustments. This non-GAAP financial information is provided to enhance the user’s overall understanding of the Company’s current financial performance. Specifically, the Company believes the non-GAAP adjusted results provide useful information to both management and investors by excluding expenses and credits that the Company believes are not indicative of the Company’s continuing operating results. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, measures of financial performance prepared in accordance with GAAP.
Three months ended November 3, 2018
Cost of goods Selling, general sold, buying and Earnings per (Amounts in thousands, except per and occupancyGross
administrative Operating diluted share amounts) costsprofit
expenses income Net income share GAAP as reported $ 142,383 $ 68,375 $ 66,802 $ 1,573 $ 1,725 $ 0.03Adjustments affecting comparability
Company name change and Registration Statement
— — 341 341 341 Reversal of certain severance accruals — — (67) (67) (67) Consulting expense — — 418 418 418 Legal expenses — — 103 103 103 Total adjustments (1) — — 795 795 795 0.01Non-GAAP as adjusted
$ 142,383 $ 68,375 $ 66,007 $ 2,368 $ 2,520 $ 0.04Three months ended October 28, 2017
Cost of goods Selling, general sold, buying and Earnings per (Amounts in thousands, except per and occupancy Gross administrative Operating diluted share amounts) costs profit expenses income Net income share GAAP as reported $ 146,584 $ 67,598 $ 66,980 $ 618 $ 352 $ 0.01Adjustments affecting comparability
Certain severance expense (206) (206) 633 427 427 Consulting expense — — 114 114 114 Legal settlement fees — — 102 102 102 Total adjustments (1) (206) (206) 849 643 643 0.01Non-GAAP as adjusted
$ 146,790 $ 67,392 $ 66,131 $ 1,261 $ 995 $ 0.02(1) The tax effect of the $0.8 million and $0.6 million of non-operating adjustments during the three months ended November 3, 2018 and October 28, 2017, respectively, is offset by a full valuation allowance against deferred tax assets.
Exhibit (6)
RTW Retailwinds, Inc. and SubsidiariesReconciliation of GAAP to Non-GAAP Financial Measures(Unaudited)
A reconciliation of the Company’s GAAP to non-GAAP financial statement information for the nine months ended November 3, 2018 and October 28, 2017 is indicated below. This information reflects, on a non-GAAP basis, the Company’s adjusted operating results after excluding certain non-operating adjustments. This non-GAAP financial information is provided to enhance the user’s overall understanding of the Company’s current financial performance. Specifically, the Company believes the non-GAAP adjusted results provide useful information to both management and investors by excluding expenses and credits that the Company believes are not indicative of the Company’s continuing operating results. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, measures of financial performance prepared in accordance with GAAP.
Nine months ended November 3, 2018
Cost of goods Selling, general sold, buying and Earnings per (Amounts in thousands, except per and occupancy Gross administrative diluted share amounts) costs profit expenses Operating income Net income share GAAP as reported $ 438,247 $ 207,710 $ 199,605 $ 8,105 $ 7,878 $ 0.12Adjustments affecting comparability
Company name change and Registration Statement — — 341 341 341 Certain severance expense 286 286 285 571 571 Reversal of certain employee relocation accruals — — (135) (135) (135) Consulting expense — — 610 610 610 Legal expenses — — 655 655 655 Total adjustments (1) 286 286 1,756 2,042 2,042 0.03Non-GAAP as adjusted
$ 437,961 $ 207,996 $ 197,849 $ 10,147 $ 9,920 $ 0.15Nine months ended October 28, 2017
Cost of goods Selling, general sold, buying and Earnings per (Amounts in thousands, except per and occupancy Gross administrative diluted share amounts) costs profit expenses Operating income Net income share GAAP as reported $ 447,574 $ 200,581 $ 198,659 $ 1,922 $ 928 $ 0.01Adjustments affecting comparability
Certain severance expense 342 342 633 975 975 Consulting expense — — 1,195 1,195 1,195 Certain executive relocation expense — — 401 401 401Legal settlement fees net accrual reversal (trademark infringement case)
—
—
(2,051 ) (2,051 ) (2,051 ) Total adjustments (1) 342 342 178 520 520 0.01Non-GAAP as adjusted
$ 447,232 $ 200,923 $ 198,481 $ 2,442 $ 1,448 $ 0.02(1) The tax effect of $2.0 million and $0.5 million of non-operating adjustments during the nine months ended November 3, 2018 and October 28, 2017, respectively, is offset by a full valuation allowance against deferred tax assets.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181129005768/en/
ICR, Inc.(203) 682-8200Investors: Allison Malkin
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