Shares Down for Maidenform Brands

With the discontinuation of a product line and other items, Maidenform Brands Incorporated (MFB) suffered fourth quarter losses, with its shares plunging 12 percent at $18.10 on premarket trading and giving weaker-than-expected guidance for the latest quarter and start of the year.

The company forecast per-share earnings of $1.75 to $1.85 based on sales growth of 1.5 to 3.5 percent in 2011. Analysts surveyed by Thomson Reuters gave an expected profit of $1.95. In the latest quarter, the company estimated 22 to 26 cents per share earnings based on net sales ranging from $150 million to $155 million, with analysts forecasting earnings of 41 cents.

Maidenform Brands, which carry well-known brands, has also been affected by tough conditions in the intimate apparel category through the third quarter, weak traffic in their middle level department stores, and high inventories after a strong start last year. It encountered hardships in its cost margins with pressure coming from discounts to help move merchandise. The company saw its gross margin fall to 23.5 percent from 35 percent due to the discontinuation of a product line and inventory costs.

Maidenform Brands is a world-renowned intimate apparel company with holdings of well-known brands, top-selling products, and an illustrious record. It is in the business of designing, sourcing and marketing a wide range of intimate apparel products.

Despite the bad news, technical analysis suggest that the recent drop of Maidenform was a technical correction to the $7 – $31.66 move that occurred during the years 2009-2010. The $17.58 local low, recorded in November 2011 nearly coincident with a 50% Fibonacci line.