Aug 8, 2012
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Maidenform forecasts profit below Street estimates

Aug 8, 2012

Lingerie maker Maidenform Brands Inc forecast the current quarter and full-year earnings below Wall Street estimates as it expects continued weakness in Europe and in the United States.

Photo: Maidenform

The company forecast earnings of 40 to 45 cents per share for the quarter ending Sept. 30. Analysts on average were expecting 64 cents per share, according to Thomson Reuters I/B/E/S.

Maidenform expects full-year earnings of between $1.50 and $1.60 per share. Analysts were expecting $1.78 per share.

Intimate wear sales have deteriorated as efforts to pass on higher raw material costs to customers have not succeeded, prompting retailers to discount more.

Maidenform's gross margins declined to 34 percent from 34.8 percent in the second quarter as a result of increased promotional and off-price retailer activity.

Rival Hanesbrands Inc reported lower second-quarter earnings last month as higher cotton costs eroded its margins. The company has trimmed its operations by exiting or selling some of its divisions to boost margins.

Maidenform, which also competes with Limited Brands Inc's Victoria's Secret, reported second-quarter earnings of $11.4 million, or 49 cents per share, compared with $11.6 million, or 50 cents per share, a year earlier.

Excluding items, Maidenform earned 67 cents per share.

Sales dropped 7 percent to $157.5 million.

The Iselin, New Jersey-based company's shares closed at $22.34 on Tuesday on the New York Stock Exchange.

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