Maidenform Brands' profit drops 18 percent in 2Q

For the quarter ended June 28, net income fell to $7.8 million, or 33 cents per share, from nearly $9.5 million, or 39 cents per share, in the same quarter last year.

The quarter's results include a penny a share associated with startup costs for developing and implementing a new licensing agreement for intimate apparel with Donna Karan International.

The earnings beat the expectations of analysts, who had predicted a profit of 31 cents per share, according to a poll by Thomson Financial.

But the company fell short of revenue projections. Maidenform saw sales drop 9 percent to nearly $108.1 from $118.9 million in the same period last year. Analysts had expected revenue of nearly $110.5 million, according to Thomson.

The company also cut its outlook for the year.

Shares dropped 73 cents, or 5 percent, to $13.78 in midday trading Wednesday.

Maidenform said the revenue decrease was driven largely by lower sales in department stores and national chain stores. That segment fell 15.8 percent to $57.4 million. Maidenform projected lower sales in the channel due to the timing of certain shipments that were shipped early in the company's third quarter and the challenging retail environment.

Wholesale sales dropped 11 percent to $93.6 million, while sales in the mass merchant channel were up nearly 12 percent to $28.5 million.

Maidenform said its same-store sales, or sales at stores open at least a year, rose 1.9 percent at its retail outlet stores. Same-store sales is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.