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Destination Maternity boosts 4Q profit guidance

PHILADELPHIA (AP) -- Destination Maternity expects its fiscal fourth-quarter and full-year earnings to beat Wall Street's view, thanks in part to an anticipated state income tax benefit.

But the maternity clothing company also announced Thursday that its quarterly revenue dipped slightly. That was within its previous forecast.

Destination Maternity expects fourth-quarter earnings between 40 cents and 42 cents per share due to the anticipated state income tax benefit. This would be above its prior guidance of 32 cents to 38 cents per share and the prior-year period's 39 cents per share.

Analysts polled by FactSet foresee earnings of 37 cents per share.

Quarterly revenue edged down 0.2 percent to $128.3 million. This was within the company's outlook of $125.5 million to $130 million.

The chain said that the results dipped mostly because it closed underperforming stores and because of lower sales due to closing its remaining leased departments within Babies R Us stores.

Sales at stores open at least a year rose 1.4 percent for the quarter, down from a 2.7 percent increase in the prior-year period. Accounting for a calendar shift, the metric climbed 1.2 percent. Destination Maternity said that its results include online sales.

Sales at stores open at least a year is a key gauge or a retailer's health because it excludes results from stores recently opened or closed.

For the full year, Destination Maternity Corp. anticipates earnings of $1.76 to $1.78 per share. Analysts expect earnings of $1.72 per share. Its year-ago earnings were $1.46 per share.

Full-year revenue slipped 0.2 percent to $540.3 million. Sales at stores open at least a year increased 2.6 percent, better than the 0.3 percent decline a year earlier. The figure rose 3.2 percent when accounting for the calendar shift.

The company had 596 stores, 1,311 leased department locations and 1,907 total retail locations as of Sept. 30.

Its shares closed at $30.28 on Wednesday. That is near its 52-week high of $32.77 at the end of September. Its shares traded as low as $18.48 over the past year.