New York & Company, Inc. reported unaudited consolidated earnings results for the second quarter and six months ended August 04, 2018. For the second quarter, the company reported net sales of $216,370,000 against $224,116,000 a year ago. The decrease in net sales reflects a reduced store count and the shift of an important pre-Mother's Day week into the first quarter, which resulted from a shifted retail calendar due to the 53rd week in fiscal year 2017 and was partially offset by increased sales from the addition of the Fashion to Figure business. Operating income was $3,057,000 against $5,156,000 a year ago. Income before income taxes was $3,274,000 against $4,918,000 a year ago. Net income was $3,067,000 against $4,823,000 a year ago. Basic and diluted earnings per share were $0.05 against $0.08 a year ago. Non-GAAP adjusted earnings per diluted share were $0.05 against $0.05 a year ago. EBITDA was $18.7 million. Comparable store sales increased 0.6% as compared to the same period last year, representing the fourth consecutive quarter of positive comparable store sales, which was led by growth in the company's eCommerce business. Non-GAAP operating income was flat at $3.5 million despite a significant shift of sales and related margin into the first quarter due to the shift in calendar, resulting from the 53rd week. Excluding the nonoperating amounts, non-GAAP net income was $3.5 million, increasing from $3.1 million in the prior year. Capital spending for the second quarter of 2018 was $1.4 million as compared to $2.6 million in the prior year period.

For the six months, the company reported net sales of $435,199,000 against $433,973,000 a year ago. Operating income was $6,532,000 against $1,304,000 a year ago. Income before income taxes was $6,488,000 against $787,000 a year ago. Net income was $6,153,000 against $576,000 a year ago. Basic and diluted earnings per share were $0.10 against $0.01 a year ago. Diluted earnings per share were $0.09 against $0.01 a year ago. Net cash provided by operating activities was $18,259,000 against cash outflow of $5,766,000 a year ago. Capital expenditures were $1,626,000 against $4,711,000 a year ago. Non-GAAP adjusted earnings per diluted share were $0.11 against $0.01 a year ago.

The company provided earnings guidance for the third quarter and fourth quarter of fiscal year 2018. For the Fall season, combined third and fourth quarter of fiscal year 2018, the company expects comparable store sales to increase in the low single-digit range, leading to improvements in operating results. The company expects GAAP operating income to be in the range of $5.5 million to $7.5 million, which includes more than $2.0 million of incremental costs to launch the company's new celebrity collaboration, and incremental costs to develop certain new businesses, as compared to the prior year GAAP operating income of $5.6 million, which included the benefit of one additional week of sales due to the 53-week year in 2017.

For the third quarter, the company is expecting GAAP operating income of $1 million to $2 million, as compared to a GAAP operating income of $0.6 million in the prior year. Net sales are expected to increase in the low single-digit percentage range, reflecting benefits from the shift of the retail calendar, combined with growth in eCommerce sales, partially offset by a reduced store count. Comparable store sales, which are shifted to compare like calendar weeks, are expected to increase in the low single-digit percentage range, driven by celebrity collaborations, the introduction of Kate Hudson for Soho Jeans Collection and growth in the digital business. Gross margin on a GAAP basis is expected to increase by 50 to 150 basis points reflecting continued improvements in merchandise margins, resulting from decreased product cost and reduced promotional activity, combined with leverage of reduced buying and occupancy costs due to the company's continued expense control efforts. Capital expenditures are projected to be approximately $4 million to $6 million, as compared to $3.1 million of capital expenditures in the third quarter of the prior year, reflecting continued investments in the company's information technology and omni-channel infrastructure, and real estate remodel/refresh activity. Depreciation expense for the third quarter is estimated at $5 million.

For the full year, the company's capital expenditures are projected to be $10 million to $11 million, as compared to $12.5 million in capital expenditures in the prior year. For the fall season, the company expects GAAP operating income to be in the range of $5.5 million to $7.5 million, which includes more than $2 million of incremental cost to launch new celebrity collaborations and incremental costs to develop certain new businesses as compared to the prior year GAAP operating income of $5.6 million, which included the benefit of 1 additional week of sales and margin due to the 53rd week in 2017.