Destination Maternity looks to the future with new strategic plan
Destination Maternity Corporation announced its new multi-year strategy “Destination -> Forward” on Thursday, setting ambitious targets for 2022 as it seeks to streamline its operations and foster innovation.
The new strategy is structured around three main priorities: reducing costs and stabilizing business, simplifying and strengthening the company’s organization for the future, and refocusing on product innovation and solutions.
The goal is to achieve full-year revenues in the range of $450 million to $475 million in 2022, and annual e-commerce growth of 20%. In the same year, it is hoped that the company’s adjusted earnings per share (EPS) will hit a target of between $1.20 and $1.60, and that adjusted EBITDA will reach between $42 million and $51 million.
“Since becoming CEO of Destination Maternity, we have conducted a rigorous assessment of the entire enterprise aimed at identifying areas to rationalize expenses, accelerate revenue growth, and improve profitability,” said Destination Maternity CEO Marla Ryan in a release.
“Destination -> Forward is the result of this effort and provides a comprehensive blueprint for cost reduction, infrastructure optimization and innovative solutions to meet the unique needs of new moms and moms2be,” she added.
The news comes just days after Destination Maternity announced job cuts in its corporate product and sourcing teams expected to result in net cost savings of between $1.2 and 1.4 million in fiscal 2019.
Ryan stepped into her position at the end of May shortly after she was elected onto the company’s Board as part of a complete overhaul which replaced all previous directors with a new female-majority slate. When she took on her new role, Ryan promised to implement “a comprehensive and attainable business plan” aimed at turning the company’s fortunes around.
Destination Maternity also provided financial guidance for fiscal 2018 and 2019. The company expects full-year revenues to total between $390 million and $395 million in 2018, falling to between $377 million and $387 million in 2019.
The company reported net sales of $96.4 million in the second quarter of 2018, a 1.9% decline compared to the prior-year period due to 27 store closures, but also managed to narrow its losses and improve profitability.
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