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Ciancolio isn't alone. Lots of people had high hopes of the Philadelphia-based maker of maternity apparel, whose stock more than tripled in 2006. Things are sure different this year. Shares are down more than 37 percent and fell further again yesterday after the company slashed its guidance for adjusted earnings this year to $1.49 to $1.74 from an earlier forecast of $2.32 to $2.85. Analysts had expected earnings of $1.73.
One of the problems Mothers Work is facing is the growing popularity of maternity clothing. "It turns out maternity wear is quite the fashion trend these days, with nonspecialty stores selling items such as trapeze and baby-doll dresses to the nonpregnant, who like the style, and the newly pregnant, who like the garments for early in their pregnancy," Cianciolo wrote.
Mothers Work seems to be taking the negativity in stride. After it reported dismal third-quarter results (earnings of $1 million, or 17 cents per share, down from $8.8 million or $1.54, last year; revenue plunged 6.5 percent to $153.2 million), President and co-founder Rebecca Matthias tried to put a positive spin on the earnings in the company's press release: "We do not believe that the recent weakness in our sales performance is indicative of any impairment of our long-term prospects," she said.
