Why Shares of New York & Company, Inc. Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of New York & Company,  (NYSE: NWY  ) weren't looking so hot today, falling as much as 10%, and closing down 7% on a disappointing first-quarter earnings report.

So what: The fashion retailer missed slightly on both top and bottom lines, coming up with breakeven EPS on expectations of a penny per-share profit, while revenue fell 3.4% to $219.6 million, missing estimates at $223.6 million. Same-store sales dropped 2.2%, and the company closed 12 locations in the previous year as part of its real estate optimization strategy. CEO Gregory Scott noted that comparable sales improved toward the end of the quarter, and said that performance in e-commerce and in its outlet stores was solid.

Now what: Looking ahead, New York & Co. expects a slight increase in revenue for the current quarter on flat to slightly higher comparable sales, in line with Wall Street expectations of an overall revenue increase at 1.4% in the quarter. Management also guided operating income at breakeven, matching estimates, as well. Seeing as the company is in the midst of a turnaround as it's recently closed stores, I'd give management a few more quarters to see if it can drive profitability. Analysts are expecting a full-year profit of $0.16 per share, which would be a marked improvement from a year ago.

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Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

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9/4/2015 4:02 PM
NWY $2.59 Down -0.01 -0.38%
New York & Company… CAPS Rating: **