Home / Knowledge / News / Apparel/Garments / G&K Q2 results consistent with expectations
G&K Q2 results consistent with expectations
27
Jan '10
G&K Services, Inc. reported second quarter fiscal 2010 revenue of $206.4 million, which compares to revenue of $241.8 million in the prior-year period. On a sequential basis, total revenue declined by 0.8 percent as a result of lost revenue due to divestiture activity, continued difficult economic conditions and the impact of holiday shutdowns. These revenue impacts were partially offset by higher sequential direct sale volume, continued stabilization of customer employment levels and a stronger Canadian dollar.

The company reported second quarter net earnings of $0.39 per diluted share, compared to $0.52 per diluted share in the prior year. For the quarter, earnings included gains from divestiture activity and asset sales, which totaled approximately $0.08 per diluted share. Second quarter earnings also benefited from savings from expense reduction activities, lower energy costs, a decrease in merchandise expense and a lower effective tax rate. These benefits were offset by the reduction in fixed cost absorption due to lower revenue. The company drove a sequential improvement in earnings per diluted share, even when excluding the net gain from divestitures and a lower effective tax rate.

"Our results were consistent with our expectations," said Douglas A. Milroy, G&K's chief executive officer. "Second quarter revenue continued to stabilize and we drove a sequential improvement in operating margin and earnings. Our new game plan continues to move us forward as we drive a sharpened focus on increasing customer service, while also reducing costs and improving underperforming locations."

Income Statement Review

Second quarter revenue from rental operations decreased to $191.3 million, down from $221.2 million in the prior-year period. The company's rental organic growth rate was negative 14.0 percent, and reflects continued pressure from lower customer employment levels, increased customer financial difficulties, lower pricing and decreased new account sales. On a sequential basis, the rental organic growth rate was consistent with the company's first quarter results. For the quarter, direct sale revenue was also lower than the prior-year period, as a result of continued weak economic conditions and the non-renewal of one large customer.

Second quarter operating margin was 6.9 percent, compared to 8.1 percent in the prior-year period. When excluding net gains from divestitures and asset sales, second quarter adjusted operating margin was 5.9 percent, up 60 basis points from the company's first quarter adjusted operating margin. The sequential improvement in adjusted operating margin resulted from a reduction in staffing levels, efficient utilization of merchandise and the recent modification of certain benefit and incentive programs. These operating margin improvements were partially offset by costs associated with a union decertification at one location and expenses related to divestiture activity.


Must ReadView All

Pic courtesy: Sutlej Textiles & Industries Ltd

Textiles | On 21st Jul 2017

Sutlej Textiles’ Q1 FY18 EBITDA expands to Rs 76.28 cr

Sutlej Textiles and Industries Ltd (STIL), one of India’s largest...

Textiles | On 21st Jul 2017

No shortage of cotton & yarn in country: Minister

There is no shortage of cotton and yarn in the country, and the...

Textiles | On 21st Jul 2017

CAI revises 2016-17 cotton crop to 337.25 lakh bales

Cotton Association of India (CAI) has upwardly revised cotton crop...

Interviews View All

Kaizad Hansotia
GetNatty

Competition is the best thing that can happen to a startup

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

Dharmendra Shah
Ozone PB Spintex Limited

‘We have made huge investments to ensure quality yarn production.’

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X