RTW Retailwinds swings earnings boost in first phase of brand transformation
NYC-based specialty apparel retail group RTW Retailwinds, Inc., formerly known as New York & Company, reported improved Q3 earnings off the back of improved margins and reduced expenses on Thursday.
The company reported net income of $1.7 million in the third quarter ended November 3, 2018, up from $0.4 million in the prior-year period.
This progress was achieved despite a decline in net sales, which totaled $210.8 million, compared to the $214.2 million reported in Q3 2017. Revenues were negatively impacted by the closure of 31 stores, which was partially offset by growth in the company’s e-commerce channel, as well as at its Fashion to Figure brand.
Comparable store sales increased 0.2%, driven by increases in RTW Retailwinds’ e-commerce and outlet channels.
Operating income for the period came to $1.6 million, up from $0.6 million.
The company announced its name change, along with a full rebranding plan, in September. RTW Retailwinds CEO Gregory Scott explains in a release that the new name seeks to establish “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.”
Moving forward, the group’s new strategy involves doubling down on its digital capabilities and data analytics, as well as growing its celebrity lifestyle brands, which currently include collaborations with Eva Mendes, Gabrielle Union and Kate Hudson.
The company’s plans also include accelerating the expansion of its plus-size brand Fashion To Figure, in order to take full advantage of the rapid growth of the inclusively sized apparel market, and launching a new lingerie lifestyle brand.
Year to date, RTW Retailwinds’ sales totaled $646.0 million, down from $648.2 million, while net income came to $7.9 million, a significant improvement when compared to the $928,000 reported in the prior-year period.
The company now expects to see operating income in the range of $2.5 million to $4.5 million in the Fall season, combining the third and fourth quarters.
This reflects a predicted operating income of between $1 million and $3 million in Q4, compared to $5.0 million in the fourth quarter of 2017. Quarterly net sales are expected to decrease in the mid to high single-digit range, while comps are expected to remain flat.
“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,” said Scott. “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.”
RTW Retailwinds currently operates 428 stores, with one opening and between 14 and 16 closures planned for Q4.
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