Apr '10
Third Quarter Results
Net sales for the three months ended March 27, 2010 were a record $107.9 million, an increase of $22.3 million from the prior year third quarter. Both of the Company's business segments achieved double-digit sales growth compared to the prior year quarter. Gross margins increased 370 basis points to 23.3% compared to 19.6% in the prior year third quarter. The gross margins in both business segments improved in the third quarter from the first half of fiscal year 2010. However, the higher mix of activewear segment sales in the third quarter lowered the overall gross margins by 60 basis points from the 23.9% gross margin in the first half of fiscal year 2010. Net income for the quarter ended March 27, 2010 was $3.0 million, or $0.34 per diluted share, compared to $0.14 per diluted share in the prior year third quarter.
Fiscal 2010 Year to Date Results
Net sales for the nine months ended March 27, 2010 were $298.2 million, an increase of $47.8 million, or 19.1%, from the prior year nine month period. The sales expansion included organic growth of 11.2% and the net sales contributed by To The Game, LLC, the Company's headwear business, which was acquired during the fourth quarter of fiscal year 2009. Net income for the nine months ended March 27, 2010 was $6.5 million, or $0.76 per diluted share, a 162.0% increase from the earnings of $0.29 per diluted share in the first nine months of fiscal year 2009.
Robert W. Humphreys, Chairman and Chief Executive Officer, commented, “The strong sales and earnings we delivered in the third quarter resulted from the dedicated focus of our management team to successfully capitalize on the Company's many growth opportunities. We believe the ability to achieve 26.0% sales growth on top of a 13.7% sales gain in the prior year quarter, especially in today's marketplace, validates our strategy of having diversified distribution channels, broad product offerings, a portfolio of brands and extensive license agreements. Our flexible manufacturing platform supports our business growth by providing consistent, high quality products to our customers at competitive prices. We continue to improve our manufacturing process and have completed speed-to-market initiatives that allow us to fulfill retail orders with shorter lead times while continuing to lower our investments in inventory.”
Fiscal 2010 Guidance
On March 2, 2010, the Company raised its guidance for the 2010 fiscal year ending July 3, 2010, expecting net sales in the range of $395 to $400 million and earnings of $1.20 to $1.30 per diluted share. Based on the stronger than anticipated third quarter sales, the Company now raises its expectations for net sales to be in the range of $400 million to $405 million forthe 2010 fiscal year. This compares to fiscal year 2009 net sales of $355.2 million. The Company reiterates its expectations for earnings to be in the range of $1.20 to $1.30 per diluted share compared to $0.76 per diluted share in fiscal year 2009.
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