Philadelphia maternity retailer Mothers Work Inc. reported a steep decline in quarterly results today, blaming the weak economy for an unanticipated hefty sales drop and a $400,000 net loss.

The company that runs Mimi Maternity, Destination Maternity and other stores for expectant women reported a net loss of 7 cents per share for the second quarter, ended March 31, compared with a $2.6 million net income, or 41 cents a share, the same period a year ago, the company said.

The 7-cent-per-share loss was worse than what the company predicted in January, though it was in line with a revised prediction earlier this month. Coming off a dismal holiday shopping season, Mothers Work in January said it expected second-quarter earnings of 19 cents to 35 cents per share.

The company also lowered its full-year profit projections today, saying it expected earnings between 5 cents and 36 cents per share, rather than the range of 72 cents to $1.20 per share set in January.

The poor financial results come as the company is under pressure from activist investors who, in seeking to enhance the stock price, were recently granted representation on the board.

Net sales for the second quarter of fiscal 2008 decreased 3.4 percent, to $139.0 million from $143.9 million a year earlier.

Comparable store sales were down 1.7 percent from a year ago.

The company said it was being affected by store closings and an overall decline in consumer spending that has set in as high fuel prices, mortgage foreclosures and recession fears have caused shoppers to become more frugal.

"We recognize that we are faced with an extremely and increasingly weak overall economic and retail environment and, thus, we are managing our inventory and expenditures very tightly," said Rebecca Matthias, the company's president and chief creative officer.

As the retailer tries to stem further losses, it has set about closing underperforming stores while opening larger, multi-brand "superstores" that appear to be popular with retailers.

Mothers Work operated 766 stores nationwide as of March, compared with 795 a year ago. The company said it would close up to 55 stores this year and open up to 33 new ones.

Mothers Work this year also is scaling back its presence in department stores. The company will eliminate its floor space in Sears by this June, when it will have terminated the leases on its 477 remaining department-store sites there.

Shares were trading at $14.27 on Nasdaq, down from yesterday's close of $16.25.