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Child of Mine brand sales drop in Q2
23 Jul '08
6 min read
"As expected, OshKosh continued to negatively impact our results for the quarter. With the improvement in our product offerings and better inventory management disciplines, however, we expect to achieve improved profitability from our OshKosh retail segment in the second half of this year."
First Half of Fiscal 2008 compared to First Half of Fiscal 2007Consolidated net sales increased 3.9% to $631.6 million. Net sales of the Company's Carter's brands increased 5.7% to $505.2 million. Net sales of the Company's OshKosh brand decreased 2.7% to $126.5 million.
Consolidated retail store sales increased 11.2% to $273.3 million. Carter's retail store sales increased 18.5% to $179.1 million, driven by a comparable store sales increase of 14.9%, or $22.3 million, and sales of $6.2 million from Carter's stores opened since the second quarter of fiscal 2007.
OshKosh retail store sales decreased 0.5% to $94.2 million, due to a comparable store sales decrease of $3.4 million, or 3.7%, and the impact of store closures of $0.8 million, partially offset by sales of $3.7 million from OshKosh stores opened since the second quarter of fiscal 2007. In the first half of fiscal 2008, the Company opened three Carter's retail stores.
The Company's wholesale sales increased 1.3% to $244.4 million. Carter's wholesale sales increased $6.2 million, or 3.0%, to $212.2 million, due primarily to the timing of shipments in fiscal 2008. OshKosh wholesale sales decreased $3.0 million, or 8.5%, to $32.2 million due to product performance.
The Company's mass channel sales decreased 5.7% to $114.0 million. Sales of our Just One Year brand increased $5.3 million, or 12.1%, to $48.7 million, driven by new door growth. Sales of our Child of Mine brand decreased $12.2 million, or 15.7%, to $65.3 million due primarily to product performance.
Consolidated operating income in the first half of fiscal 2008 was $29.8 million as compared to a consolidated operating loss of $116.7 million in the first half of fiscal 2007. Excluding charges related to the executive retirement in the first half of fiscal 2008 and impairment and closure costs in the first half of fiscal 2007, the Company's adjusted operating income decreased $10.2 million, or 22.4%.
This decrease was due to a decline in gross margin in our OshKosh retail stores due to the performance of our 2007 Fall and Holiday product lines, performance of our Child of Mine brand, higher inventory provisions, and provisions for incentive compensation.
Net income was $14.3 million, or $0.24 per diluted share, compared to a net loss of $133.8 million, or $2.30 per diluted share, in the first half of fiscal 2007. Excluding executive retirement charges in the first half of fiscal 2008 and impairment and closure costs in the first half of fiscal 2007, the Company's adjusted net income decreased $3.4 million, or 16.2%, and adjusted diluted earnings per share decreased 14.3%.
Net cash provided by operating activities in the first half of fiscal 2008 was $24.1 million compared to net cash used in operating activities of $8.3 million in the first half of fiscal 2007, driven largely by favorable changes in working capital.
During the first half of fiscal 2008, the Company repurchased 1,320,085 shares of its common stock for approximately $20 million at an average price of $15.20 per share.
First Half of Fiscal 2008 compared to First Half of Fiscal 2007Consolidated net sales increased 3.9% to $631.6 million. Net sales of the Company's Carter's brands increased 5.7% to $505.2 million. Net sales of the Company's OshKosh brand decreased 2.7% to $126.5 million.
Consolidated retail store sales increased 11.2% to $273.3 million. Carter's retail store sales increased 18.5% to $179.1 million, driven by a comparable store sales increase of 14.9%, or $22.3 million, and sales of $6.2 million from Carter's stores opened since the second quarter of fiscal 2007.
OshKosh retail store sales decreased 0.5% to $94.2 million, due to a comparable store sales decrease of $3.4 million, or 3.7%, and the impact of store closures of $0.8 million, partially offset by sales of $3.7 million from OshKosh stores opened since the second quarter of fiscal 2007. In the first half of fiscal 2008, the Company opened three Carter's retail stores.
The Company's wholesale sales increased 1.3% to $244.4 million. Carter's wholesale sales increased $6.2 million, or 3.0%, to $212.2 million, due primarily to the timing of shipments in fiscal 2008. OshKosh wholesale sales decreased $3.0 million, or 8.5%, to $32.2 million due to product performance.
The Company's mass channel sales decreased 5.7% to $114.0 million. Sales of our Just One Year brand increased $5.3 million, or 12.1%, to $48.7 million, driven by new door growth. Sales of our Child of Mine brand decreased $12.2 million, or 15.7%, to $65.3 million due primarily to product performance.
Consolidated operating income in the first half of fiscal 2008 was $29.8 million as compared to a consolidated operating loss of $116.7 million in the first half of fiscal 2007. Excluding charges related to the executive retirement in the first half of fiscal 2008 and impairment and closure costs in the first half of fiscal 2007, the Company's adjusted operating income decreased $10.2 million, or 22.4%.
This decrease was due to a decline in gross margin in our OshKosh retail stores due to the performance of our 2007 Fall and Holiday product lines, performance of our Child of Mine brand, higher inventory provisions, and provisions for incentive compensation.
Net income was $14.3 million, or $0.24 per diluted share, compared to a net loss of $133.8 million, or $2.30 per diluted share, in the first half of fiscal 2007. Excluding executive retirement charges in the first half of fiscal 2008 and impairment and closure costs in the first half of fiscal 2007, the Company's adjusted net income decreased $3.4 million, or 16.2%, and adjusted diluted earnings per share decreased 14.3%.
Net cash provided by operating activities in the first half of fiscal 2008 was $24.1 million compared to net cash used in operating activities of $8.3 million in the first half of fiscal 2007, driven largely by favorable changes in working capital.
During the first half of fiscal 2008, the Company repurchased 1,320,085 shares of its common stock for approximately $20 million at an average price of $15.20 per share.
Carter's Inc
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