Destination Maternity Reports Sales for November 2009

PHILADELPHIA, Dec. 3 /PRNewswire-FirstCall/ — Destination Maternity Corporation (Nasdaq: DEST), the world’s leading maternity apparel retailer, today reported sales for the month of November 2009. Net sales for the month of November 2009 decreased 3.1% to $42.7 million from $44.0 million reported for the month of November 2008. Comparable store sales for the month of November 2009 decreased 11.6% on a reported basis, and decreased approximately 8.1% after adjusting for the “days adjustment calendar timing shift.” This decrease in comparable store sales for November is in line with the Company’s guidance range for November comparable store sales decrease of between 10.0% and 12.5% on a reported basis, and between 6.5% and 9.0% after adjusting for the calendar shift, which was provided in its November 18, 2009 press release. For November 2008, the Company’s comparable store sales increased 0.6% on a reported basis, and decreased approximately 1.4% to 2.4% after adjusting for the calendar shift. The decrease in total reported sales for November 2009 compared to November 2008 resulted primarily from the decrease in comparable store sales, partially offset by increased sales from the Company’s licensed and leased department relationships, including sales due to the re-launch of the exclusive Two Hearts® Maternity collection in Sears® and Kmart® stores in October 2009, and increased internet sales.

Ed Krell, Chief Executive Officer of Destination Maternity, noted, “Our November sales results were in line with our revised mid-month outlook, although weaker than originally planned, reflecting: (i) the continued extremely difficult overall retail environment; (ii) our relatively strong comparable store sales last November, especially compared to most apparel retailers; and (iii) unseasonably warm weather in many regions of the United States in November, which hurts demand for Fall apparel. It is important to note, though, that with our much cleaner inventory position versus a year ago, our merchandise gross margin this November was significantly higher than last November.”

During November 2009, the Company opened one store and closed two stores. As of the end of November 2009, the Company operates 721 stores, 980 leased department locations and 1,701 total retail locations, compared to 754 stores, 283 leased department locations and 1,037 total retail locations operated at the end of November 2008. The increase in leased department locations at the end of November 2009 versus the end of November 2008 predominantly reflects the opening of 623 Sears and Kmart leased department locations in connection with the October 2009 re-launch of the Two Hearts Maternity collection.

Days Adjustment Calendar Shift

Destination Maternity reports sales on a calendar month basis, rather than on a “4-5-4 retail fiscal calendar” where each fiscal week and fiscal month starts on a Sunday and ends on a Saturday. Thus, for each calendar month, there is a “days adjustment calendar shift” which may help or hurt reported calendar month sales and comparable store sales due to different days of the week typically contributing more sales than other days of the week. For November 2009, there was one more Monday and one less Saturday compared to November 2008. The Company estimates this calendar shift unfavorably impacted its reported comparable store sales for November 2009 by approximately 3.5 percentage points. The comparable store sales increase of 0.6% for November 2008 was favorably impacted by approximately 2 to 3 percentage points due to having one more Saturday and Sunday and one less Thursday and Friday in November 2008 compared to November 2007.

Destination Maternity Corporation is the world’s largest designer and retailer of maternity apparel, using its quick response replenishment system to “give the customer what she wants, when she wants it.” In the United States and Canada, Destination Maternity operates, as of November 30, 2009, 1,701 retail locations, including 721 stores, predominantly under the tradenames Motherhood Maternity®, A Pea in the Pod®, and Destination Maternity®, and sells on the web through its DestinationMaternity.com and brand-specific websites. Destination Maternity also distributes its Oh Baby by Motherhood® collection through a licensed arrangement at Kohl’s® stores throughout the United States and on Kohls.com, and, in October 2009, re-launched its Two Hearts Maternity® by Destination Maternity collection in Sears® stores and certain Kmart® stores through a leased department relationship with Sears. In addition, Destination Maternity is expanding internationally and has entered into exclusive store franchise and product supply relationships in India and the Middle East.

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 net sales, comparable store sales, other results of operations, liquidity and financial condition, and various 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: the impact of the current global economic slowdown on the retail industry in general and on apparel purchases in particular, our ability to successfully manage our various business initiatives, our ability to successfully implement our merchandise brand and retail nameplate restructuring, the success of our international expansion, our ability to successfully manage and retain our leased department and licensed relationships and marketing partnerships, future sales trends in our existing store base, unusual weather patterns, changes in consumer preferences and spending patterns, demographics and other macroeconomic factors that may impact the level of spending for maternity apparel, overall economic conditions and other factors affecting consumer confidence, expense savings initiatives, the impact of competition and fluctuations in the price, availability and quality of raw materials and contracted products, availability of suitable store locations, continued availability of capital and financing, goodwill impairment charges, 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 prepayments, changes in market interest rates, 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.

SOURCE Destination Maternity Corporation