PHILADELPHIA, April 6 /PRNewswire-FirstCall/ -- Mothers Work, Inc.
(Nasdaq:
MWRK), the world's leading maternity apparel retailer, today
announced net sales for March 2006 and increased its earnings guidance for
the second quarter of fiscal 2006 ended March 31, 2006. Net sales for the
month of March 2006 increased 7.0% to $56.8 million from $53.0 million
reported for the month of March 2005. The increase in net sales for March
2006 was primarily driven by sales from the expansion of the Company's
proprietary Two Hearts(TM) Maternity collection to an additional 497
Sears(R) locations during late March 2005, as well as increases in
comparable store sales, internet sales, and sales from the Company's Oh
Baby! by Motherhood(TM) licensed arrangement with Kohl's(R), which launched
during the second quarter of fiscal 2005. Comparable store sales for March
2006 increased 2.2% (based on 1,006 locations) versus a comparable store
sales decrease of 3.0% (based on 909 locations) for March 2005. This 2.2%
comparable store sales increase for the month of March 2006 would have been
approximately 1.0 percentage points higher if there had not been a shift in
the timing of Easter to April this year compared to March last year.
    During March 2006, the Company opened two stores, including its
eleventh Destination Maternity(TM) superstore, and closed four stores. The
Company ended the month with 831 stores and 1,559 total retail locations,
compared to 869 stores and 1,597 total retail locations at the end of March
2005.
    Net sales increased 3.3% to $144.6 million for the second quarter of
fiscal 2006 ended March 31, 2006, from $140.0 million for the same period
of the preceding year. Comparable store sales increased 1.4% during the
second quarter of fiscal 2006 (based on 998 locations) versus a comparable
store sales decrease of 3.0% during the second quarter of fiscal 2005
(based on 898 locations). For the quarter ended March 31, 2006, the Company
opened five stores, including three multi-brand stores, and closed 25
stores, with 11 of these store closings related to multi-brand store
openings.
    Rebecca Matthias, President and Chief Operating Officer of Mothers
Work, noted, "We are very pleased to report that our sales for the month of
March exceeded our expectations, as we delivered a comparable store sales
increase of 2.2% for the month despite the adverse effect of the Easter
timing shift, which we estimate hurt our March comparable store sales
results by approximately 1 percentage point. Our preliminary sales for the
second quarter of $144.6 million slightly exceeded the top end of our
guidance range of $142.5 million to $144.5 million, and our comparable
store sales increase of 1.4% for the second quarter was right in line with
our comparable store sales guidance of an increase of 0.5% to 2.0% for the
quarter. We estimate that our comparable store sales increase of 1.4% for
the second quarter was unfavorably affected by approximately 0.7 percentage
points, due to January 2006 having one less Saturday than January 2005 and
the Easter timing shift to April in 2006 from March in 2005. In addition,
we continue to experience strong improvement in gross margin versus last
year, driven by decreased price promotional activity compared to last year
as well as a continued reduction in our product costs. As we have stated in
our recent press releases, we believe the oversupply conditions that
plagued the maternity apparel business during our fiscal 2004 and fiscal
2005 have eased somewhat, and we believe that our strong sales trend
beginning this past September reflects this.
    "We are very pleased to report that, with our strong sales and gross
margin performance and our continued tight expense controls, we expect our
second quarter earnings to exceed the top end of our previous earnings
guidance range. We expect our second quarter earnings per share after stock
option expense to be at least $0.06 per share, significantly higher than
our previous earnings guidance range of between a loss of $(0.05) per share
to earnings of $0.01 per share after stock option expense. We expect our
second quarter earnings per share before stock option expense to be at
least $0.09 per share, significantly higher than our previous earnings
guidance range of between a loss of $(0.02) per share to earnings of $0.04
per share before stock option expense.
    "Looking forward, we feel very good about our product lines and our
inventory position, and feel very confident about our business. We continue
to be very optimistic about delivering significantly improved financial
results and continuing our strategic transition in fiscal 2006, as we
expect to see a continuation of our improved sales and gross margin trend
and expect to realize increased earnings contribution from our new
strategic initiatives, including increased contribution from our marketing
partnerships, a full year contribution from our Sears and Kohl's
initiatives, and the continued rollout of our multi-brand stores. We
continue to be very excited that our new strategic business initiatives
will promote our long-term growth in sales and profitability, while
addressing the continued competitive pressures in the maternity apparel
business.
    "We will report results for our second quarter and hold an investor
conference call on April 25, 2006, at which time we will provide additional
information related to our results for the second quarter, our future
financial guidance and our strategic business initiatives."
    Mothers Work is the world's largest designer and retailer of maternity
apparel, using its custom TrendTrack(TM) merchandise analysis and planning
system as well as its quick response replenishment process to "give the
customer what she wants, when she wants it." As of March 31, 2006, Mothers
Work operates 1,559 maternity locations, including 831 stores,
predominantly under the tradenames Motherhood Maternity(R), A Pea in the
Pod(R), Mimi Maternity(R), and Destination Maternity(TM), and sells on the
web through its
http://www.DestinationMaternity.com and brand-specific
websites.
    The Company cautions that any forward-looking statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995)
contained in this press release or made from time to time by management of
the Company, including those regarding expected results of operations and
new business initiatives, involve risks and uncertainties, and are subject
to change based on various important factors. The following factors, among
others, in some cases have affected and in the future could affect the
Company's financial performance and actual results and could cause actual
results to differ materially from those expressed or implied in any such
forward-looking statements: our ability to successfully manage our new
initiatives, future sales trends in our existing store base, changes in
consumer spending patterns, raw material price increases, consumer
preferences and overall economic conditions, the impact of competition and
pricing, availability of suitable store locations, continued availability
of capital and financing, ability to hire and develop senior management and
sales associates, ability to develop and source merchandise, ability to
receive production from foreign sources on a timely basis, potential stock
repurchases, potential debt repurchases, war or acts of terrorism, and
other factors set forth in the Company's periodic filings with the
Securities and Exchange Commission, or in materials incorporated therein by
reference.
    Mothers Work press releases available through Company News On-Call at
http://www.prnewswire.com/comp/581877.html


SOURCE Mothers Work, Inc.
Web Site:
http://www.motherswork.com
http://www.DestinationMaternity.com
Company News On Call: http://www.prnewswire.com/comp/581877.html
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