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R.G. Barry President pleased with overall performance of 2007
07 Feb '08
5 min read
For the first half, the Company reported:
• Net earnings of $7.8 million, or $0.75 per basic share and $0.74 per diluted share, versus net earnings of $26.6 million or $2.65 per basic share and $2.57 per diluted share in the comparable period one year ago;
• Net sales of $70.7 million versus $74.8 million in the first half one year ago;
• Gross profit as a percent of sales at 42.2 percent compared to 40.1 percent in the comparable period of fiscal 2007; and
• Selling, general and administrative expenses of $17.6 million, up from $16.8 million in the equivalent period last year.
The Company's second quarter and first half fiscal 2008 net earnings reflected income tax expense of $2.4 and $4.6 million, respectively, while results from the comparable periods in fiscal 2007 reflected the income tax benefit of $12.9 and $12.8 million, respectively, which resulted from the reversal of the Company's deferred tax asset valuation allowance in the second quarter of fiscal 2007. Second quarter net earnings for fiscal 2007 also benefited from the previously mentioned gain on the sale of land.
Management Comments:
“We are quite pleased with our overall performance during another very difficult, highly-promotional season at retail,” said Greg Tunney, President and Chief Executive Officer. “Our success resulted in great part from the flexibility of our business model and our very broad presence across many retail channels. Our business with mass merchandisers and warehouse clubs was especially good this holiday season.
“The net sales decline reported primarily reflects a shift in sales to the second half of this year due to our largest customer selecting us as their single resource for year-round basic replenishment slippers. This retailer previously bought these products from three suppliers of which we were the largest.
The first phase of this major initiative involved selling inventory already in the retailer's stores and warehouses to make way for fresh, new R.G. Barry products. To accommodate this effort, we did not ship to this customer in November, December or January.
This month, we will begin restocking their stores and distribution centers and as a result, meaningfully increase our second half business this year and our annual business going forward.
“Our strategy of diversification of products, channels and brands within the accessory footwear category is now just beginning to add some balance to the highly seasonal nature of our business.
While the impact of this strategy will be modest in this fiscal year, we believe that by continuing to introduce products like our Terrasoles casual hybrid footwear and our licensed Superga canvas active fashion footwear, we will lessen our reliance on one selling season and one product category.
“We also believe that significant, profitable growth opportunities still exist in our core business. We are investing heavily in development and marketing support for our existing Dearfoams family of brands; and we are taking advantage of opportunities in the slipper category with extensions like our NCAA-licensed My College Footwear and our newly licensed Nautica slippers, both of which we will introduce this fall.
“Our business is healthy and growing. We plan to continue refining our existing businesses and seeking out and investing in new opportunities to fuel real, sustainable, profitable growth. Our goal continues to be becoming the number one global accessory footwear company,” Mr. Tunney concluded.
• Net earnings of $7.8 million, or $0.75 per basic share and $0.74 per diluted share, versus net earnings of $26.6 million or $2.65 per basic share and $2.57 per diluted share in the comparable period one year ago;
• Net sales of $70.7 million versus $74.8 million in the first half one year ago;
• Gross profit as a percent of sales at 42.2 percent compared to 40.1 percent in the comparable period of fiscal 2007; and
• Selling, general and administrative expenses of $17.6 million, up from $16.8 million in the equivalent period last year.
The Company's second quarter and first half fiscal 2008 net earnings reflected income tax expense of $2.4 and $4.6 million, respectively, while results from the comparable periods in fiscal 2007 reflected the income tax benefit of $12.9 and $12.8 million, respectively, which resulted from the reversal of the Company's deferred tax asset valuation allowance in the second quarter of fiscal 2007. Second quarter net earnings for fiscal 2007 also benefited from the previously mentioned gain on the sale of land.
Management Comments:
“We are quite pleased with our overall performance during another very difficult, highly-promotional season at retail,” said Greg Tunney, President and Chief Executive Officer. “Our success resulted in great part from the flexibility of our business model and our very broad presence across many retail channels. Our business with mass merchandisers and warehouse clubs was especially good this holiday season.
“The net sales decline reported primarily reflects a shift in sales to the second half of this year due to our largest customer selecting us as their single resource for year-round basic replenishment slippers. This retailer previously bought these products from three suppliers of which we were the largest.
The first phase of this major initiative involved selling inventory already in the retailer's stores and warehouses to make way for fresh, new R.G. Barry products. To accommodate this effort, we did not ship to this customer in November, December or January.
This month, we will begin restocking their stores and distribution centers and as a result, meaningfully increase our second half business this year and our annual business going forward.
“Our strategy of diversification of products, channels and brands within the accessory footwear category is now just beginning to add some balance to the highly seasonal nature of our business.
While the impact of this strategy will be modest in this fiscal year, we believe that by continuing to introduce products like our Terrasoles casual hybrid footwear and our licensed Superga canvas active fashion footwear, we will lessen our reliance on one selling season and one product category.
“We also believe that significant, profitable growth opportunities still exist in our core business. We are investing heavily in development and marketing support for our existing Dearfoams family of brands; and we are taking advantage of opportunities in the slipper category with extensions like our NCAA-licensed My College Footwear and our newly licensed Nautica slippers, both of which we will introduce this fall.
“Our business is healthy and growing. We plan to continue refining our existing businesses and seeking out and investing in new opportunities to fuel real, sustainable, profitable growth. Our goal continues to be becoming the number one global accessory footwear company,” Mr. Tunney concluded.
R.G. Barry Corporation
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