Winning DEST Forecast: Destination Maternity Destined To Outperform Market Over 3 Day and 3 Months

The company is working “to implement a comprehensive and attainable business plan geared toward accelerating revenue growth, rationalizing expenses and improving profitability. This includes identifying opportunities to expand our ecommerce sales platform, prioritizing inventory optimization and developing new partnerships and innovations that will help us better engage with our customers and drive strengthened brand loyalty.”

-Marla Ryan, Chief Executive Officer of Destination Maternity

(Source: Wikimedia Commons)

Destination Maternity Corporation (NASDAQ: DEST) is a chain of specialty stores that produces and sells maternity apparel across the US. Over the past few months, I Know First has issued multiple bullish forecasts for Destination Maternity over varying time frames. On March 16, 2018, the algorithm gave a forecast with a signal of 63.58 and predictability of .24 over a 3 month time horizon. In accordance with the algorithm, the stock increased by a whopping 115.85% over the predicted time.

More recently, on June 14, 2018, I Know First produced a bullish forecast for DEST with a signal of 21.16 and predictability of .03. Once again, the accuracy of the I Know First algorithm was shown when the stock skyrockets 53.91% in only 3 days.

(Source: Yahoo Finance)

So what prompted these massive gains?

On June 14, 2018 Destination Maternity released their Q1 2018 earnings report which prompted the massive spike in share price that occurred on the same day. Some highlights of this earning report include net income of $0.2 million or EPS of $0.02 with adjusted net income of $1 million or $0.07 EPS. In comparison, for the first quarter of 2017, the company saw a net loss of $0.7 million or $0.05 per share. Additionally, despite a slow foray into the ecommerce market, Destination Maternity saw online sales increase 43% YoY. This report shows a strong start to the 2018 fiscal year.

The company has also recently been led by a new Chief Executive Officer, Marla Ryan, who plans to put the company back on track. She is prioritizing increase profitability by focusing on opportunities in ecommerce and brand loyalty. The company had faced difficulty when a group of activist investors called for changes to the board after watching the company decline for a long time as shares have fallen over 90% since 2011. However, the new board and CEO shakeup show potential for a company on the rebound that is looking to capitalize on newly identified opportunities. Ryan plans to implement a new business plan that accelerates the growth of revenue by focusing on ecommerce since many brick-and-mortar stores are facing declining traffic.

Additionally, the company ended the 2017 fiscal year on a strong note which gave them momentum going into Q1 2018. Over the course of the year, the company made major improvements to its online sites and integrated ecommerce with its brick and mortar stores through options such as ordering online and picking up in store option. The company also identified room for improvement in its operations and increasing the declining comparable sales.

Current I Know First subscribers received these bullish DEST forecasts on March 16, 2018 and June 14, 2018.

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Destination Maternity Corporation, formerly Mothers Work, Inc., incorporated on October 23, 1980, is a designer and retailer of maternity apparel in the United States. The Company operates a chain of maternity apparel specialty stores. The Company operates through the design, manufacture, and sale of maternity apparel and related accessories segment. It operates approximately 1,815 retail locations, including over 540 stores in the United States, Canada and Puerto Rico, and approximately 1,280 leased departments located within department stores and baby specialty stores throughout the United States, in Puerto Rico and, in England. The Company sells merchandise on the Internet, primarily through its Motherhood.com, APeaInThePod.com and DestinationMaternity.com Websites. The Company also sells its merchandise through its Canadian Website, MotherhoodCanada.ca, through Amazon.com in the United States, and through Websites of certain of its retail partners. The Company provides maternity apparel to Kohl’s, which operates over 1,100 stores throughout the United States and offers its maternity apparel in a number of its stores. The Company operates its over 540 stores under three retail nameplates: Motherhood Maternity, A Pea in the Pod and Destination Maternity. In addition to its over 540 stores, the Company operates approximately 1,280 maternity apparel departments, which it refers to as leased departments, within retailers, such as Macy’s, buybuy BABY, Boscov’s, Harrods and Century 21. The Company provides maternity apparel in its leased department locations. The Company operates approximately 475 leased departments within Sears stores.