Destination Maternity's (DEST) Expands Via Leasing with Macy's (M), Kohl's (KSS), Sears (SHLD), Gordmans (GMAN)

Destination Maternity (Nasdaq:DEST) is expanding its brand through a leasing strategy with stores like Kohl's (NYSE:KSS), Sears (Nasdaq:SHLD) and Gordmans (Nasdaq:GMAN), which they already have a strong presence with, while expanding its leasing arrangement with Macy's (NYSE:M).

Motherhood Maternity is part of Philadelphia-based Destination Maternity (Nasdaq:DEST), a retailer that sells attractive maternity clothing for expectant mother's. Its future looks brighter today than it has in some time.

Management's is aware it must boost profitability. In its investor presentation from February's annual meeting, it mentions that it doubled adjusted EBITDA margins to 10.2% in the past three fiscal years. And it's getting better. It improved its adjusted EBITDA margin by 110 basis points to 9.8% in the first quarter ended December 31. Revenues in 2011 should increase and GAAP diluted earnings per share are expected to be at least $1.81, 37% higher than in 2010. The steps taken to improve profits are working.

Destination Maternity has 35% to 45% market share of the US maternity apparel business. There's no reason it can't do the same in other countries. With its online business growing at 20% a quarter and revenues likely to pass $600 million sometime around Christmas, I see a bright future ahead.

Destination Maternity was trading at $22.84, gaining $1.08, or 4.96 percent, as of 1:21 PM EST.




Source