=New York & Co (NWY) reported earnings on Thur 17 Aug 2017 (a/h)

NEW YORK--(BUSINESS WIRE)--

New York & Company, Inc. (NWY), a specialty women’s apparel chain with 460 retail stores, today announced results for the second quarter ended July 29, 2017.

Gregory Scott, New York & Company’s CEO stated: “We are pleased to report better-than-expected second quarter results reflecting a significant increase in both operating income and diluted earnings per share as compared to the fiscal 2016 second quarter. The quarter marked our highest gross margin and operating income since second quarter 2005 and 2008, respectively. We also made progress on our profit improvement objectives which resulted in lower product costs, reductions in occupancy costs, decreases in buying expenses, savings in selling, general and administrative expenses, all while advancing our omni-channel and loyalty initiatives.”

“Most notably in the quarter was the significant improvement in the traffic trends to our NY&CO brick-and-mortar stores, which we attribute to the success of our product and marketing including the launch of Gabrielle Union for 7th Avenue and the continued growth in our Eva Mendes Collection,” continued Mr. Scott. “The quarter also saw the launch of our new private label credit card program, which we expect to lead to increases in consumer loyalty and shopping visits over time. While comparable sales were down slightly, we were pleased to experience continued growth in eCommerce, which increased by a double-digit percentage. In addition, we believe we are positioned well at the start of the third quarter, and we are optimistic that the implementation of our strategies will lead to sustainable long-term sales and profit growth and increased value for our shareholders.”

Second Quarter Fiscal Year 2017 Results (13-weeks ended July 29, 2017 compared to the 13-weeks ended July 30, 2016):

• Net sales were $224.1 million, decreasing 3.7% as compared to $232.8 million in the prior year, reflecting growth in eCommerce, offset by the impact of a lower store count (460 this year versus 486 last year) and decreased comparable store sales.
• Comparable store sales decreased 1.1%, reflecting double-digit percentage growth in eCommerce offset by decreases in comparable store sales in brick-and-mortar stores.
• Gross profit as a percentage of net sales increased 180 basis points to 30.6% versus 28.8% for the fiscal year 2016 second quarter, reflecting the highest gross margin rate achieved in the second quarter since 2005. The increase during the quarter reflects a 30 basis point increase in merchandise margin and a 150 basis point improvement in the leverage of buying and occupancy expenses.
  
  The 30 basis point improvement in merchandise margin was driven by a 100 basis point increase in product margin partially offset by a 70 basis point impact of a $1.4 million increase in shipping costs associated with the growing eCommerce business. The 100 basis point increase in product margin resulted from a $3.5 million increase in royalties under the new private label credit card agreement which contributed to a 70 basis point improvement combined with a 30 basis point improvement in product costs. For the period, royalties under the new private label credit card agreement increased to $6.0 million from $2.5 million in the prior year second quarter.