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Net sales of Carter's brands perk up in Q1
23 Apr '08
4 min read
Compared to our adjusted operating income in the first quarter of fiscal 2007, which excludes facility closure costs of $6.0 million, as reconciled below, our first quarter fiscal 2008 operating income decreased $6.6 million, or 24%.
This decrease was due primarily to a decline in gross margin in our OshKosh retail stores resulting from Fall and Holiday product performance, higher provisions for excess inventory, particularly in our OshKosh retail and mass channel segments, and lower margins on certain mass channel products.
Income tax expense for the first quarter of fiscal 2008 includes a benefit of $1.6 million resulting from the reversal of income tax reserves following the completion of recent tax audits.
In the first quarter of fiscal 2008, net income was $11.6 million, or $0.19 per diluted share, compared to $9.6 million, or $0.16 per diluted share, in the first quarter of fiscal 2007.
Excluding facility closure costs, as reconciled below, our adjusted net income for the first quarter of fiscal 2007 was $13.3 million, or $0.22 per diluted share.
Net income for the first quarter of fiscal 2008, as compared to adjusted net income for the first quarter of fiscal 2007 decreased $1.8 million, or 13.5%, and diluted earnings per share decreased 13.6%.
"The retail environment continues to be very uncertain. Most of our wholesale customers have taken a more cautious outlook for 2008, which has impacted their demand for our products.
While we believe spending in the young children's segment is less discretionary than other apparel segments, it has been impacted by the overall downturn in the economy and slowdown in consumer spending," noted Fred Rowan, Chairman and CEO.
"We continue to be very encouraged by the performance of our Carter's retail segment in this environment, with comparable store sales up over 12%.
Our Carter's retail store performance helped to partially offset the continued weakness in our OshKosh segments and disappointing performance of our Child of Mine brand," continued Mr. Rowan.
"We've made significant investments in our OshKosh merchandising and retail teams to successfully execute the OshKosh turnaround strategy and have a better Child of Mine product offering launching in June 2008.
It's unclear how long this market will remain uncertain. In the meantime, we will continue to focus on the things we can improve, including executing a far more comprehensive and impactful model to improve the competitiveness of our business."
This decrease was due primarily to a decline in gross margin in our OshKosh retail stores resulting from Fall and Holiday product performance, higher provisions for excess inventory, particularly in our OshKosh retail and mass channel segments, and lower margins on certain mass channel products.
Income tax expense for the first quarter of fiscal 2008 includes a benefit of $1.6 million resulting from the reversal of income tax reserves following the completion of recent tax audits.
In the first quarter of fiscal 2008, net income was $11.6 million, or $0.19 per diluted share, compared to $9.6 million, or $0.16 per diluted share, in the first quarter of fiscal 2007.
Excluding facility closure costs, as reconciled below, our adjusted net income for the first quarter of fiscal 2007 was $13.3 million, or $0.22 per diluted share.
Net income for the first quarter of fiscal 2008, as compared to adjusted net income for the first quarter of fiscal 2007 decreased $1.8 million, or 13.5%, and diluted earnings per share decreased 13.6%.
"The retail environment continues to be very uncertain. Most of our wholesale customers have taken a more cautious outlook for 2008, which has impacted their demand for our products.
While we believe spending in the young children's segment is less discretionary than other apparel segments, it has been impacted by the overall downturn in the economy and slowdown in consumer spending," noted Fred Rowan, Chairman and CEO.
"We continue to be very encouraged by the performance of our Carter's retail segment in this environment, with comparable store sales up over 12%.
Our Carter's retail store performance helped to partially offset the continued weakness in our OshKosh segments and disappointing performance of our Child of Mine brand," continued Mr. Rowan.
"We've made significant investments in our OshKosh merchandising and retail teams to successfully execute the OshKosh turnaround strategy and have a better Child of Mine product offering launching in June 2008.
It's unclear how long this market will remain uncertain. In the meantime, we will continue to focus on the things we can improve, including executing a far more comprehensive and impactful model to improve the competitiveness of our business."
Carter's Inc
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