~ Reports Total Sales of $224.0 Million
~
~ eCommerce Business Grew to 38% of Sales
from 33% in the Prior Year Quarter ~
~ Reports $60.6 Million in Cash / $0.94 Per
Diluted Share with No Debt Outstanding ~
RTW Retailwinds, Inc. (NYSE:RTW), an omni-channel specialty
apparel retail platform for powerful celebrity and consumer brands,
today announced results for the fourth quarter and full year fiscal
2019 representing the 13-weeks and 52-weeks ended February 1, 2020,
respectively. This compares to the 13-week fourth quarter and
52-week full year of fiscal 2018, which ended February 2, 2019.
Gregory Scott, Chief Executive Office of RTW Retailwinds,
stated: “We continue our strategic transition to a digitally
dominant retailer supported with a portfolio of celebrity and
lifestyle brands that unlock distinct market opportunities. While
we delivered near record results in 2018, we were disappointed with
our fourth quarter and fiscal 2019 performance stemming from
declines in store traffic and continued weakness in our casual
lifestyle sub-brand. These challenges offset growth in our core New
York & Company digital brand, celebrity brands and another
double-digit comp increase for our Fashion to Figure business in
excess of 50%, emphasizing the ability to adapt to the challenges
we face as a business.”
Mr. Scott continued: “In light of our performance and given the
current environment, we are taking decisive action and accelerating
our strategic transformation agenda and have engaged an outside
consultancy to assist with recalibrating our business to support a
profitable and more balanced direct to consumer operating model.
Today we are announcing our plan to permanently close up to 150
locations in the next 18 months as part of our transformation to a
digital first portfolio of brands. In addition, we have re-aligned
our internal Design and Merchandising organization to be product
focused and away from two distinct lifestyle teams, allowing us to
improve clarity of offer, optimize organizational efficiencies, and
reduce development expense. Finally, we are reviewing our entire
go-to-market process in conjunction with an external consultancy to
identify additional opportunities to improve our operating model.
These initiatives along with our previously announced customer
first strategy and digital re-platform, will allow us to
successfully adapt and navigate the retail environment of today and
tomorrow.”
Commenting on RTW's transformation to a digitally dominant
retailer, Traci Inglis, President, Chief Customer and Marketing
Officer added: "We have made significant investments in our
Customer First initiative over the past 9 months, including paid
digital marketing to support customer acquisition and relaunching
all of our brands on a new digital platform this Fall to enhance
and advance our customer experience. The combined impact of our
strategies positions our portfolio of brands to compete in today's
dynamic retail environment, setting us up for success as we
transition to being a digitally-dominant retailer.”
Regarding the first quarter, Mr. Scott added: “We opened the
quarter with well-managed inventory levels declining (8%). While
February and early March trends were largely in-line with our
expectations, the recent developments surrounding the coronavirus
(COVID-19) have negatively impacted mall traffic. We realize that
the situation is evolving and the safety of our customers and
associates is our primary concern. In the immediate term, we are
temporarily closing all New York & Company and Fashion to
Figure stores through March 28th, 2020 in response to the increased
impact from COVID-19. We appreciate that the road ahead is a
challenging one, but we believe that once the benefits of our
strategy are fully realized they will add significant value to our
portfolio of brands and to our shareholders.”
Fourth Quarter Fiscal Year 2019 Results (13-week period ended
February 1, 2020 as compared to the 13-week period ended February
2, 2019):
As it relates to the fourth quarter of fiscal year 2019, the
Company noted the following:
- Net sales were $224.0 million, as compared to $247.3 million in
the prior year, reflecting a reduction in comparable store sales,
and a reduction in store count, partially offset by growth in the
Company’s eCommerce business and the Fashion to Figure brand.
- Comparable store sales decreased 7.4%, as compared to the same
period last year, representing a decline in the Company’s
brick-and-mortar business, partially offset by growth in the
Company’s eCommerce business and the Fashion to Figure brand. All
quarterly comparable store sales results are based on a 13-week
comparable time period.
- Gross profit as a percentage of net sales decreased 460 basis
points to 24.2% versus fiscal year 2018 fourth quarter gross profit
percentage of 28.8%. The decrease reflects increased promotional
activity, including $0.4 million of inventory markdowns related to
the exit of the Uncommon Sense brand, decreased leverage of buying
and occupancy costs on lower sales, and increased shipping costs
primarily related to increased rates and partially from growth in
the Company's eCommerce channel.
- Selling, general and administrative expenses increased by $2.5
million to $74.3 million, or 33.2% of net sales, as compared to
$71.8 million, or 29.1% of net sales in the prior year period. The
increase primarily reflects an increase in marketing expense to
drive sales and accelerated depreciation related to the re-platform
of the Company’s existing eCommerce site, partially offset by a
decrease in store selling expense.
- Loss from impairment charges were $19.8 million, or 8.8% of net
sales as compared to $1.1 million, or 0.4% of net sales last year.
During the current period, the Company recorded a non-cash charge
of $11.8 million, representing the impairment of store operating
lease assets established under the new lease accounting standard
(ASC 842) that was adopted in fiscal year 2019, and non-cash fixed
asset impairment charges of $8.0 million primarily related to the
impairment of store level assets.
- GAAP operating loss for the fourth quarter of fiscal year 2019
of $39.8 million includes $19.8 million of non-cash asset
impairment costs, $0.6 million of accelerated depreciation related
to the Company’s existing eCommerce site, and $0.4 million of
charges related to the exit of the Uncommon Sense brand, as
compared to an operating loss of $1.6 million in the prior year.
Excluding the non-operating charges, non-GAAP operating loss was
$19.0 million, which compares to the prior year’s non-GAAP
operating income of $0.1 million.
Please refer to the “Reconciliation of GAAP to Non-GAAP
Financial Measures” in Exhibit 5 of this press release, which
delineates the non-operating adjustments for the 13 weeks ended
February 1, 2020 and the 13 weeks ended February 2, 2019. GAAP is
defined as Generally Accepted Accounting Principles in the United
States.
Full Fiscal Year 2019 Results (52-week period ended February
1, 2020 as compared to the 52-week period ended February 2,
2019)
- Net sales were $827.0 million for fiscal year 2019, as compared
to $893.2 million for fiscal year 2018. The reduction reflects a
reduction in store count, partially offset by the addition of
Fashion to Figure and growth in eCommerce. Comparable store sales
decreased 5.4%, as compared to the same period last year.
- GAAP operating loss was $61.9 million. On a non-GAAP basis,
adjusted operating loss was $35.8 million. This compares to GAAP
operating income of $6.5 million and non-GAAP, adjusted operating
income of $10.2 million for fiscal year 2018.
Please refer to the “Reconciliation of GAAP to Non-GAAP
Financial Measures” in Exhibit 5 of this press release, which
delineates the non-operating adjustments for the 52 weeks ended
February 1, 2020 and the 52 weeks ended February 2, 2019.
Other Financial and Operational Highlights:
- Total quarter end inventory decreased 8.1%, as compared to the
prior year period, reflecting lower store count and decreased
inventory in-transit, partially offset by an increase in eCommerce
inventory.
- Capital expenditures were $3.8 million for the fourth quarter
as compared to $4.8 million in the prior year period. Capital
expenditures for the full fiscal year were $8.5 million for the
current and prior fiscal years.
- During the fourth quarter, the Company closed 27 locations, and
remodeled/refreshed 1 existing location ending the fourth quarter
with 387 stores, including 116 Outlet stores (which includes 54
clearance stores) and 1.9 million selling square feet in
operation.
- The Company ended the fourth quarter with $60.6 million of cash
on-hand, no outstanding borrowings under its revolving credit
facility and no long-term debt.
Outlook:
Regarding expectations for fiscal year 2020, the Company
continues to invest in the transformation of its business from a
traditional brick-and-mortar retailer into a digitally dominant
retailer. The Company remains focused on growth in its digital
sales and improving its operating results to drive increases in
both annual operating income and EBITDA. In light of the rapidly
changing environment with the COVID-19 virus and its potential
implications on the supply chain and mall traffic patterns, the
Company is refraining from providing specific earnings guidance on
metrics but is evaluating and preparing for a variety of
scenarios.
Comparable Store Sales:
A store is included in the comparable store sales calculation
after it has completed 13 full fiscal months of operations from the
store's opening date or once it has been reopened after remodeling
if the gross square footage did not change by more than 20%. Sales
from the Company's eCommerce stores, and private label credit card
royalties and related revenue are included in comparable store
sales. In addition, in a year with 53 weeks, sales in the last week
of the year are not included in determining comparable store
sales.
Conference Call Information
A conference call to discuss fourth quarter results is scheduled
for today, Thursday, March 19, 2020 at 4:30 p.m. Eastern Time.
Investors and analysts interested in participating in the call are
invited to dial (877) 407-0784 and reference conference ID number
13699637 approximately ten minutes prior to the start of the call.
The conference call will also be webcast live at
www.nyandcompany.com. A replay of this call will be available at
7:30 p.m. Eastern Time on March 19, 2020 until 11:59 p.m. Eastern
Time on March 26, 2020 and can be accessed by dialing (844)
512-2921 and entering conference ID number 13699637.
About RTW Retailwinds
RTW Retailwinds, Inc. (together with its subsidiaries, the
"Company") is a specialty women's omni-channel retailer with a
powerful multi-brand lifestyle platform providing curated fashion
solutions that are versatile, on-trend, and stylish at a great
value. The specialty retailer, first incorporated in 1918, has
grown to now operate 387 retail and outlet locations in 33 states
while also growing a substantial eCommerce business. The Company's
portfolio includes branded merchandise from New York & Company,
Fashion to Figure, and Happy x Nature, and collaborations with Eva
Mendes, Gabrielle Union and Kate Hudson. The Company's branded
merchandise is sold exclusively at its retail locations and online
at www.nyandcompany.com, www.fashiontofigure.com,
www.happyxnature.com, and through its rental subscription
businesses at www.nyandcompanycloset.com and
www.fashiontofigurecloset.com. Additionally, certain product, press
releases and SEC filing information concerning the Company are
available at the Company's website: www.nyandcompany.com.
Forward-looking Statements
This press release contains certain forward-looking statements,
including statements made within the meaning of the safe harbor
provisions of the United States Private Securities Litigation
Reform Act of 1995. Some of these statements can be identified by
terms and phrases such as “expect,” “anticipate,” “believe,”
“intend,” “estimate,” “continue,” “could,” “may,” “plan,”
“project,” “predict,” and similar expressions and references to
assumptions that the Company believes are reasonable and relate to
its future prospects, developments and business strategies. Such
statements, including information under “Outlook” above, are
subject to various risks and uncertainties that could cause actual
results to differ materially. These include, but are not limited
to: (i) the Company’s dependence on mall traffic for its sales and
the continued reduction in the volume of mall traffic; (ii) the
Company’s ability to anticipate and respond to fashion trends;
(iii) the impact of general economic conditions and their effect on
consumer confidence and spending patterns; (iv) changes in the cost
of raw materials, distribution services or labor; (v) the potential
for economic conditions to negatively impact the Company's
merchandise vendors and their ability to deliver products; (vi) the
Company’s ability to open and operate stores successfully; (vii)
seasonal fluctuations in the Company’s business; (viii) competition
in the Company’s market, including promotional and pricing
competition; (ix) the Company’s ability to retain, recruit and
train key personnel; (x) the Company’s reliance on third parties to
manage some aspects of its business; (xi) the Company’s reliance on
foreign sources of production; (xii) the Company’s ability to
protect its trademarks and other intellectual property rights;
(xiii) the Company’s ability to maintain, and its reliance on, its
information technology infrastructure; (xiv) the effects of
government regulation; (xv) the control of the Company by its
largest shareholder and any potential change of ownership of the
Company including the shares held by its largest shareholder; (xvi)
the impact of tariff increases or new tariffs; (xvii) risks
associated with the spread of COVID-19 and its potential impact on
the Company’s sales and supply chain; and (xviii) other risks and
uncertainties as described in the Company’s documents filed with
the SEC, including its most recent Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q. The Company undertakes
no obligation to revise the forward-looking statements included in
this press release to reflect any future events or
circumstances.
Exhibit (1)
RTW Retailwinds, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Operations
(Unaudited)
(Amounts in thousands, except per share
amounts)
13 weeks ended
February 1, 2020
% of net sales
13 weeks ended
February 2, 2019
% of net sales
Net sales
$
224,016
100.0
%
$
247,267
100.0
%
Cost of goods sold, buying and occupancy
costs
169,791
75.8
%
175,965
71.2
%
Gross profit
54,225
24.2
%
71,302
28.8
%
Selling, general and administrative
expenses
74,274
33.2
%
71,824
29.1
%
Loss from impairment charges
19,787
8.8
%
1,112
0.4
%
Operating loss
(39,836)
(17.8)
%
(1,634)
(0.7)
%
Net interest income
(99)
—
%
(360)
(0.1)
%
Loss before income taxes
(39,737)
(17.8)
%
(1,274)
(0.6)
%
Provision for income taxes
498
0.2
%
2,374
0.9
%
Net loss
$
(40,235)
(18.0)
%
$
(3,648)
(1.5)
%
Basic loss per share
$
(0.62)
$
(0.06)
Diluted loss per share
$
(0.62)
$
(0.06)
Weighted average shares outstanding:
Basic shares of common stock
64,433
64,084
Diluted shares of common stock
64,433
64,084
Selected operating data:
(Dollars in thousands, except square
foot data)
Comparable store sales decrease
(7.4)
%
(1.5)
%
Net sales per average selling square foot
(a)
$
111
$
117
Net sales per average store (b)
$
550
$
583
Average selling square footage per store
(c)
5,004
4,981
Ending store count
387
411
(a)
Net sales per average selling square foot
is defined as net sales divided by the average of beginning and
monthly end of period selling square feet.
(b)
Net sales per average store is defined as
net sales divided by the average of beginning and monthly end of
period number of stores.
(c)
Average selling square footage per store
is defined as end of period selling square feet divided by end of
period number of stores.
Exhibit (2)
RTW Retailwinds, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Operations
(Unaudited)
(Amounts in thousands, except per share
amounts)
52 weeks ended February
1, 2020
% of net sales
52 weeks ended February
2, 2019
% of net sales
Net sales
$
826,990
100.0
%
$
893,224
100.0
%
Cost of goods sold, buying and occupancy
costs
594,890
71.9
%
614,212
68.8
%
Gross profit
232,100
28.1
%
279,012
31.2
%
Selling, general and administrative
expenses
273,456
33.1
%
270,943
30.3
%
Loss from impairment charges
20,569
2.5
%
1,598
0.2
%
Operating (loss) income
(61,925)
(7.5)
%
6,471
0.7
%
Net interest income
(833)
(0.1)
%
(813)
(0.1)
%
Loss on extinguishment of debt
—
—
%
239
—
%
(Loss) income before income taxes
(61,092)
(7.4)
%
7,045
0.8
%
Provision for income taxes
531
0.1
%
2,815
0.3
%
Net (loss) income
$
(61,623)
(7.5)
%
$
4,230
0.5
%
Basic (loss) earnings per share
$
(0.96)
$
0.07
Diluted (loss) earnings per share
$
(0.96)
$
0.06
Weighted average shares outstanding:
Basic shares of common stock
64,346
63,825
Diluted shares of common stock
64,346
65,913
Selected operating data:
(Dollars in thousands, except square
foot data)
Comparable store sales (decrease)
increase
(5.4)
%
0.4
%
Net sales per average selling square foot
(a)
$
406
$
418
Net sales per average store (b)
$
2,017
$
2,082
Average selling square footage per store
(c)
5,004
4,981
(a)
Net sales per average selling square foot
is defined as net sales divided by the average of beginning and
monthly end of period selling square feet.
(b)
Net sales per average store is defined as
net sales divided by the average of beginning and monthly end of
period number of stores.
(c)
Average selling square footage per store
is defined as end of period selling square feet divided by end of
period number of stores.
Exhibit (3)
RTW Retailwinds, Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
(Amounts in thousands)
February 1, 2020
February 2, 2019*
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
60,630
$
95,542
Accounts receivable
9,195
9,879
Inventories, net
76,122
82,803
Prepaid expenses
12,610
16,921
Other current assets
1,174
1,818
Total current assets
159,731
206,963
Property and equipment, net
44,896
63,791
Operating lease assets
189,794
—
Intangible assets
16,625
16,813
Other assets
938
1,311
Total assets
$
411,984
$
288,878
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
70,172
$
77,050
Accrued expenses
70,543
68,585
Current operating lease liabilities
40,350
—
Income taxes payable
110
375
Total current liabilities
181,175
146,010
Non-current operating lease
liabilities
189,154
—
Deferred rent
—
25,090
Other liabilities
25,698
31,165
Total liabilities
396,027
202,265
Total stockholders’ equity
15,957
86,613
Total liabilities and stockholders’
equity
$
411,984
$
288,878
* Derived from the audited consolidated financial statements
included in the Company’s Annual Report on Form 10-K for the fiscal
year ended February 2, 2019.
Exhibit (4)
RTW Retailwinds, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
52 weeks
ended
February 1, 2020
52 weeks
ended
February 2, 2019
Operating activities
Net (loss) income
$
(61,623)
$
4,230
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating activities:
Depreciation and amortization
19,925
21,044
Non-cash lease expense
45,498
—
Loss from impairment charges
20,569
1,598
Amortization of intangible assets
188
312
Amortization of deferred financing
costs
45
56
Write-off of unamortized deferred
financing costs
—
239
Share‑based compensation expense
2,086
2,335
Changes in operating assets and
liabilities:
Accounts receivable
879
2,274
Inventories, net
6,681
1,695
Prepaid expenses
(852)
(474)
Accounts payable
(6,878)
6,961
Accrued expenses
1,683
(7,975)
Income taxes payable
(265)
347
Deferred rent
—
(2,127)
Operating lease liabilities
(48,131)
—
Other assets and liabilities
(4,348)
(3,443)
Net cash (used in) provided by operating
activities
(24,543)
27,072
Investing activities
Capital expenditures
(8,547)
(8,527)
Insurance recoveries
404
375
Net cash used in investing activities
(8,143)
(8,152)
Financing activities
Repayment of long-term debt
—
(11,750)
Principal payments on capital lease
obligations
(1,761)
(1,994)
Payment of financing fees
(380)
—
Proceeds from exercise of stock
options
—
38
Shares withheld for payment of employee
payroll taxes
(85)
(580)
Net cash used in financing activities
(2,226)
(14,286)
Net (decrease) increase in cash and cash
equivalents
(34,912)
4,634
Cash and cash equivalents at beginning of
period
95,542
90,908
Cash and cash equivalents at end of
period
$
60,630
$
95,542
Non-cash capital lease transactions
$
—
$
—
Exhibit (5)
RTW Retailwinds, Inc. and Subsidiaries
Reconciliation of GAAP to non-GAAP Financial Measures
(Unaudited)
A reconciliation of the Company’s GAAP operating income (loss)
to non‑GAAP adjusted operating income (loss) is indicated below.
Adjusted operating income (loss) is being presented because it is a
key measure used by the Company’s management and board of directors
to understand and evaluate the Company’s core operating performance
and trends, to prepare the financial budget and to develop short
and long‑term operational plans. In particular, the exclusion of
certain expenses in calculating adjusted operating income (loss)
can provide a useful measure for period‑to‑period comparisons of
the Company’s core business. Accordingly, the Company believes that
adjusted operating income (loss) provides useful information to
investors and others in understanding and evaluating the Company’s
operating results in the same manner as the Company’s management
and its board of directors. This non‑GAAP financial information
should be considered in addition to, not as a substitute for or as
being superior to, measures of financial performance prepared in
accordance with GAAP.
(Amounts in thousands)
13 weeks
ended
February 1, 2020
13 weeks
ended
February 2, 2019
GAAP operating loss as reported
$(39,836)
$(1,634)
Adjustments affecting comparability
Loss on impairment charges
19,787
—
Accelerated depreciation – eCommerce
site
580
—
Uncommon Sense closeout
447
—
Certain severance expense
—
1,537
Company name change and Registration
Statement
—
64
Consulting expense‑Project Excellence
—
60
Legal expense
—
54
Total adjustments
20,814
1,715
Non‑GAAP adjusted operating (loss)
income
$(19,022)
$81
(Amounts in thousands)
52 weeks
ended
February 1, 2020
52 weeks
ended
February 2, 2019
GAAP operating (loss) income as
reported
$(61,925)
$6,471
Adjustments affecting comparability
Loss on impairment charges
20,569
—
Accelerated depreciation – eCommerce
site
580
—
Uncommon Sense closeout
4,672
—
Certain severance expense
578
2,108
Company name change and Registration
Statement
—
405
Consulting expense‑Project Excellence
—
670
Legal expense (reversal)
(209)
709
Reversal of certain employee relocation
accruals
—
(135)
Total adjustments
26,190
3,757
Non‑GAAP adjusted operating (loss)
income
$(35,735)
$10,228
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200319005774/en/
Investor Relations: ICR, Inc. (203) 682-8200 Allison
Malkin
Grafico Azioni RTW Retailwinds (NYSE:RTW)
Storico
Da Set 2024 a Ott 2024
Grafico Azioni RTW Retailwinds (NYSE:RTW)
Storico
Da Ott 2023 a Ott 2024