New York—New York & Company Inc. swung into a first quarter profit which the company credited to better pricing and merchandise selected.
For the quarter ended May 4, the specialty retailer reported after hours Thursday, May 23, net income of $1.6 million, or 3 cents a share, compared to a loss of $211,000, or break-even per share, last year. The latest results included a $600,000 income-tax benefit for the reversal of an uncertain tax position.
Net sales edged down 0.1% to $227.5 million compared to $227.7 million in first quarter last year. That was better than analysts’ average estimate that expected a loss of 7 cents a share on sales of $216.8 million.
According to Gregory Scott, chief executive, sales started out slow in the quarter but the retailer instituted special promotions that increases traffic and helped sales. The company also reported gains in online and outlet sales.
“As we progressed through the quarter, our team immediately addressed a difficult business trend by capitalizing on product opportunities and introducing traffic generating events,” Scott said, noting especially Easter and pre-Mother’s Day events.
Comparable store sales were down 2% compared to a 2.9% decline a year ago. Gross margin, however, increased 90 basis points to 29.2% compared to last year. Operating margin was 0.5%, 50 basis points better than the prior-year quarter. Net margin was 0.7%, 80 basis points better than the prior-year quarter.
New York & Co. forecast that it expects its second quarter results to range between break-even to a loss of $4 million in part due to the 25 fewer stores it has this year.