Via https://newsapi.org online business online marketing online business opportunities RTW Retailwinds, Inc. Announces 2019 1st Quarter Results

Via https://newsapi.org online business online marketing online business opportunities

NEW YORK–()–RTW Retailwinds, Inc. [NYSE:RTW], an omni-channel specialty apparel
retail platform for powerful celebrity and consumer brands, today
announced results for the first quarter of fiscal year 2019 ended May 4,
2019.

“For the first quarter, we executed against our strategic plan of
growing our multi-brand portfolio by continuing to build our Fashion to
Figure business and by bringing to market digitally native brands that
address customer opportunities. Regarding Fashion to Figure, we are
pleased to see the ongoing implementation of our strategic plan resonate
with the customer, as reflected in the brand’s 30% comp for the quarter.
In addition, on April 4thwe introduced Happy x Nature, Kate
Hudson’s first ready-to-wear collection supported by Kate’s active and
engaged social network. On April 25th, we introduced
Uncommon Sense, a lingerie lifestyle brand which solves the challenges
many women face in their lingerie choices through smarter fits,
technology, and support that looks great and feels amazing,” said
Gregory Scott, RTW Retailwinds, Inc. CEO.

“That said, we were disappointed by our first quarter performance in our
core New York & Company business with February performance being
particularly challenging, though we did experience sequential
improvement throughout the quarter during the combined March and April
period,” Mr. Scott continued. “Traffic, along with new customer
acquisition and weak results from our SoHo Jeans sub-brand contributed
to the overall disappointing results in the first quarter.”

“Moving on to the second quarter, we did experience improved performance
during the first two weeks of May, including the Mother’s Day holiday.
This improvement is reflected in our guidance for the second quarter,
which includes the continued investments in our new businesses,” said
Mr. Scott

“Looking ahead to our long term growth, as announced today we are
pleased to announce that Traci Inglis will be joining RTW in June as our
President, Chief marketing and Customer Officer. In this newly created
position, Traci brings exactly what we are looking for with her track
record in translating customer data, analytics, and insights into
innovative, customer-first strategies. She joins us at an important time
in our multi-brand evolution and her experience will be incredibly
important to our portfolio of brands as we work to reinvent the way we
market and deliver experiences to our customers across all channels.
Traci is the ideal leader to leverage the power of our information to
engage customers and build digital brands through optimized customer
experiences and new customer acquisition. I look forward to working with
her on building for the future of RTW and transforming our customer
journey across our portfolio of brands,” according to Mr. Scott.

For the first quarter of fiscal year 2019, the Company reported the
following:

  • Net sales were $201.0 million, as compared to $218.8 million in the
    prior year, reflecting a 5.3% decrease in comparable store sales,
    which reflects a reduction in store count by 22 closed stores from the
    prior year first quarter, partially offset by the inclusion of sales
    from Fashion to Figure.
  • Gross profit as a percentage of net sales decreased 80 basis points to
    31.2% versus fiscal year 2018 first quarter gross profit percentage of
    32.0%. The decrease reflects increases in shipping rates and decreases
    in leverage of buying and occupancy costs.
  • Selling, general and administrative expenses decreased by $1.4 million
    to $65.1 million, or 32.4% of net sales, as compared to $66.5 million,
    or 30.4% of net sales in the first quarter of fiscal year 2018.
    Included in selling, general and administrative expenses in the first
    quarter of fiscal year 2019 is $2.3 million of incremental spending
    incurred in connection with the incubation of three new businesses
    (Fashion to Figure, Happy x Nature, and Uncommon Sense), which was
    offset by a reduction in variable compensation and store selling
    expenses.
  • Operating loss for the first quarter of fiscal year 2019 was $2.5
    million, inclusive of $1.5 million of losses from three new
    businesses. This compares to operating income of $3.5 million for the
    first quarter of fiscal year 2018. There was no impact on operating
    income for the first quarter of fiscal year 2018 from the Company’s
    new businesses.
  • Net loss for the first quarter of fiscal year 2019 was $2.2 million,
    or a loss of $0.04 per diluted share, as compared to net income of
    $3.1 million, or earnings of $0.05 per diluted share in the first
    quarter of fiscal year 2018.

Other Financial and Operational Highlights for the First Quarter of
Fiscal Year 2019:

  • Total quarter end inventory increased 4.3%, as compared to the end of
    the prior year period, to support the new businesses and shifts in the
    timing of receipts.
  • Capital expenditures were $0.9 million, as compared to $0.3 million in
    the prior year period, reflecting continued spending to support new
    stores and the remodel/refresh of existing stores and investments in
    the IT infrastructure to support new businesses.
  • The Company opened 1 New York & Company store, closed 1 New York &
    Company store, and remodeled/refreshed 2 New York & Company stores and
    1 Outlet store, ending the first quarter with 410 stores, including
    119 Outlet stores (of which 58 are clearance stores), with 2.0 million
    selling square feet in operation. The Company continues to maintain a
    highly flexible lease portfolio with approximately 70% of its leases
    expiring in 2 years or less.
  • The Company ended the first quarter with $83.2 million of cash on-hand
    versus $78.0 million at the end of the first quarter of fiscal year
    2018, with no outstanding borrowings under its revolving credit
    facility and no long-term debt.

Outlook:

Regarding expectations for fiscal year 2019, the Company continues to
focus on growth and focus on improving its operating results to drive
increases in comparable store sales and annual operating income.

For the second quarter of fiscal year 2019:

  • Net sales are expected to decrease in the low single-digit percentage
    range, reflecting the combination of reduced store count, and
    comparable store sales which are expected to be down slightly.
  • Gross margin is expected to be down slightly, primarily reflecting
    increased shipping costs, partially offset by increased leverage of
    buying and occupancy costs.
  • Selling, general and administrative expenses are expected to decrease
    by approximately $1 million versus the prior year’s second quarter.
    This reflects reductions in variable compensation and reduced payroll,
    partially offset by an increase in marketing expenses and an increase
    in selling expenses, driven by growth in eCommerce variable costs and
    the costs to support new businesses.
  • Operating income for the second quarter is expected to be
    approximately breakeven, which includes approximately $1.5 million of
    losses associated with the three new businesses.

Additional Outlook:

  • On-hand inventory at the end of the second quarter of fiscal year 2019
    in the core New York & Company business is expected to be down in the
    low single digit percentage range, offset by increased in-transit
    levels due to the timing of receipts and inventory to support the new
    businesses with total inventory expected to be up in the low single
    digit percentage range.
  • Capital expenditures for the second quarter of fiscal year 2019 are
    projected to be approximately $5 million to support new stores and the
    remodel/refresh of existing stores, investments in IT infrastructure,
    and investments in new businesses, as compared to $1.4 million of
    capital expenditures in the second quarter of 2018. For fiscal year
    2019, capital expenditures are projected to be $12 million to $13
    million, as compared to $8.5 million in capital expenditures in fiscal
    year 2018.
  • Depreciation and amortization expense for the second quarter of fiscal
    year 2019 is estimated to be approximately $16 million, with
    approximately $11 million attributable to amortization of the
    Company’s right-of-use asset resulting from the adoption of Accounting
    Standards Codification 842, “Leases” on the first day of fiscal year
    2019.
  • During the second quarter of fiscal year 2019, the Company expects to
    open 5 New York & Company stores and 2 Fashion to Figure stores,
    convert 2 New York & Company stores to Outlet stores, remodel/refresh
    2 New York & Company stores, and close 1 New York & Company store.
  • For fiscal year 2019, the Company expects to open approximately 8 New
    York & Company stores and 2 Fashion to Figure stores, convert 2 New
    York & Company stores to Outlet stores, and remodel/refresh 7 New York
    & Company stores and 2 Outlet stores, and close 12 to 17 New York &
    Company stores and up to 3 Outlet stores. The Company plans to end
    fiscal year 2019 with roughly 400 to 405 stores, and approximately 2.0
    million of selling square feet.

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 stores, and private label credit card royalties and related
revenue are included in comparable store sales. 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 fourth quarter results is scheduled for
today, Wednesday, May 29, 2019 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 13690146 approximately
ten minutes prior to the start of the call. The conference call will
also be webcast live atwww.nyandcompany.com.
A replay of this call will be available at 7:30 p.m. Eastern Time on May
29, 2019 until 11:59 p.m. Eastern Time on June 5, 2019 and can be
accessed by dialing (844) 512-2921 and entering conference ID number
13690146.

As a supplement to this press release, slides with information regarding
the first quarter results and outlook for second quarter 2019 will also
be available at:www.nyandcompany.com
at approximately 4:20 p.m. Eastern Time on Wednesday, May 29, 2019.

About RTW Retailwinds

RTW Retailwinds, Inc. (together with its subsidiaries, the “Company”) is
a specialty women’s omni-channel and digitally enabled retailer with a
powerful multi-brand lifestyle platform providing curated fashion
solutions that are versatile, on-trend, and stylish at a great value.
The specialty retailer, first incorporated in 1918, has grown to now
operate 410 retail and outlet locations in 35 states while also growing
a substantial eCommerce business. The Company’s portfolio includes
branded merchandise from New York & Company, Fashion to Figure, Happy x
Nature, Uncommon Sense, and collaborations with Eva Mendes, Gabrielle
Union and Kate Hudson. The Company’s branded merchandise is sold
exclusively at its retail locations and online atwww.nyandcompany.com,
www.nyandcompanycloset.com,
www.fashiontofigure.com,
www.happyxnature.com,
andwww.uncommonsense.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; (xvi) the impact of tariff increases or new
tariffs; and (xvii) 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)

13 weeks
ended
May 4, 2019

% of
net sales

13 weeks
ended
May 5, 2018

% of
net sales

Net sales $ 200,963 100.0 % $ 218,829 100.0 %
 
Cost of goods sold, buying and occupancy costs 138,321 68.8 % 148,868 68.0 %
 
Gross profit 62,642 31.2 % 69,961 32.0 %
 
Selling, general and administrative expenses 65,092 32.4 % 66,486 30.4 %
 
Operating (loss) income (2,450) (1.2) % 3,475 1.6 %
 
Net interest (income) expense (315) (0.2) % 22 %
 
Loss on extinguishment of debt % 239 0.1 %
 
(Loss) income before income taxes (2,135) (1.0) % 3,214 1.5 %
 
Provision for income taxes 114 0.1 % 128 0.1 %
 
Net (loss) income $ (2,249) (1.1) % $ 3,086 1.4 %
 
 
Basic (loss) earnings per share $ (0.04) $ 0.05
 
Diluted (loss) earnings per share $ (0.04) $ 0.05
 
Weighted average shares outstanding:
Basic shares of common stock 64,193 63,527
Diluted shares of common stock 64,193 65,404
 
Selected operating data:
(Dollars in thousands, except square foot data)
Comparable store sales (decrease) increase (5.3) % 2.7 %
Net sales per average selling square foot (a) $ 98 $ 101
Net sales per average store (b) $ 490 $ 504
Average selling square footage per store (c) 4,964 4,985
Ending store count 410 432
 
(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 Balance Sheets
 
(Amounts in thousands) May 4, 2019 February 2, 2019* May 5, 2018
(Unaudited) (Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 83,180 $ 95,542 $ 78,019
Accounts receivable 11,729 9,879 14,850
Inventories, net 94,932 82,803 90,984
Prepaid expenses 11,862 16,921 16,557
Other current assets 1,877 1,818 2,059
Total current assets 203,580 206,963 202,469
 
Property and equipment, net 59,795 63,791 72,701
Operating lease assets 227,342
Intangible assets 16,766 16,813 17,047
Other assets 883 1,311 1,469
Total assets $ 508,366 $ 288,878 $ 293,686
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 74,884 $ 77,050 $ 73,937
Accrued expenses 71,426 68,585 73,535
Current operating lease liabilities 40,865
Income taxes payable 422 375 71
Total current liabilities 187,597 146,010 147,543
 
Deferred rent 25,090 26,353
Non-current operating lease liabilities 216,306
Other liabilities 29,864 31,165 35,142
Total liabilities 433,767 202,265 209,038
 
Total stockholders’ equity 74,599 86,613 84,648
Total liabilities and stockholders’ equity $ 508,366 $ 288,878 $ 293,686
 
*   Derived from the audited consolidated financial statements included
in the Company’s Annual Report on Form 10-K for the fiscal year
ended February 2, 2019.
 
     
Exhibit (3)
RTW Retailwinds, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 

(Amounts in thousands)

13 weeks
ended
May 4, 2019

13 weeks
ended
May 5, 2018

 
Operating activities
Net (loss) income $ (2,249) $ 3,086
Adjustments to reconcile net (loss) income to net cash used in
operating activities:
Depreciation and amortization 4,880 5,479
Non-cash lease expense 11,029
Loss from impairment charges 82
Amortization of intangible assets 47 78
Amortization of deferred financing costs 8 34
Write-off of unamortized deferred financing costs 239
Share-based compensation expense 710 642
Changes in operating assets and liabilities:
Accounts receivable (1,251) (2,506)
Inventories, net (12,129) (6,486)
Prepaid expenses (104) (110)
Accounts payable (2,166) 3,848
Accrued expenses 2,566 (3,022)
Income taxes payable 47 43
Deferred rent (864)
Operating lease liabilities (11,645)
Other assets and liabilities   (758)   (935)
Net cash used in operating activities   (10,933)   (474)
 
Investing activities
Capital expenditures (910) (274)
Insurance recoveries     184
Net cash used in investing activities   (910)   (90)
 
Financing activities
Repayment of long-term debt (11,750)
Principal payments on capital lease obligations (481) (482)
Shares withheld for payment of employee payroll taxes   (38)   (93)
Net cash used in financing activities   (519)   (12,325)
 
Net decrease in cash and cash equivalents (12,362) (12,889)
Cash and cash equivalents at beginning of period   95,542   90,908
Cash and cash equivalents at end of period $ 83,180 $ 78,019
 

via https://newsapi.org online business online marketing online business opportunities

Read More

Be the first to comment on "Via https://newsapi.org online business online marketing online business opportunities RTW Retailwinds, Inc. Announces 2019 1st Quarter Results"

Leave a comment

Your email address will not be published.


*