"Our improved earnings performance was driven primarily by the expense saving from our cost-reduction initiatives and our strong merchandise gross margin performance," said Ed Krell, chief executive officer of the Center City company.
Krell said that, besides increased sales, cost-cutting at the company - including paying down $11 million in debt - also figured into the improved performance.
The company reported an increase in total retail locations from 1,084 at the end of fiscal 2009 to 1,725 this year. That growth was fueled in large measure by the launch of hundreds of locations at Sears and Kmart.
The company also is moving forward on a previously announced plan to significantly expand its presence in Macy's department stores, which in June said it had designated Destination Maternity as its sole maternity retailer.
Under the agreement, there will be Destination Maternity departments at 615 Macy's stores nationwide, a more-than-fivefold increase from its Macy's presence earlier this year.
"We are by no means satisfied or complacent, especially with regards to our sales performance," Krell said in a statement accompanying the firm's earnings report.
The improved results for fiscal 2010 and the brighter outlook for the coming year provided a somewhat optimistic outlook for an industry that has faced the prospect of a declining market as couples, grappling with the recession, put off having children.
Krell noted in an interview in September that births had declined from 4.3 million in 2007, before the recession gathered full steam, to 4.1 million in 2009, a decline of 4.6 percent in the potential company customer base.
What customers remained surely would not have as much disposable income as before, he noted.
But overall sales held up reasonably well, according to the company, which said that year-end sales for fiscal 2010 at $531 million were roughly equivalent to the preceding year.
Fourth-quarter income was $4.3 million (67 cents a share), over $1.4 million (22 cents a share) in the comparable quarter.
Company shares closed up $3.19, or 8.99 percent, at $38.31, on the Nasdaq.
Contact staff writer Chris Mondics at 215-854-5957 or cmondics@phillynews.com.
