R.G. Barry Corporation reported operating results for the first quarter of fiscal 2009 that, while below results reported in the equivalent period one year ago, were in line with Company expectations and its previously issued sales guidance for the full 2009 fiscal year.
The accessories footwear marketer said that a shift in the anticipated timing of shipments to retailers from late in its first quarter to early in its second quarter negatively impacted first quarter net sales by approximately $6.5 million.
The Company expects the first quarter net sales shortfall to be recovered in the second quarter, based upon shipments to retailers since the end of first quarter, its open order position and its retail sell-through rates to date. The Company continues to expect to finish the 2009 fiscal year with revenue approximately flat to revenue reported for fiscal 2008.
For the period ended September 27, 2008, the Company reported: • Net earnings of $1.1 million, or $0.10 per basic and diluted share, down from net earnings of $3.8 million, or $0.36 per basic share and $0.35 per diluted share in the first quarter of fiscal 2008; Net sales of $25.6 million versus net sales of $32.1 million reported for the corresponding period one year ago; and Gross profit as a percent of sales at 39.6 percent was down from 43.8 percent reported in the first quarter of fiscal 2008.
The Company's balance sheet continued to reflect its strong overall financial health: Cash, cash equivalents and short-term investments of $9.6 million were up from $1.3 million one year ago; Inventory of $25.5 million was up from $21.4 million at the end of the first quarter of fiscal 2008, principally reflecting the timing issues related to first quarter shipments; and Net shareholders' equity was $47.2 million, up from $39.7 million in the comparable period last year.
Management Comments
“This quarter is a perfect illustration of why we caution people to avoid measuring us quarter-to-quarter. Our business is highly seasonal and best analyzed on an annual basis,” said Greg Tunney, President and Chief Executive Officer. “A planned shift of just a week or two in the timing of some early holiday shipments negatively skewed our first quarter results."
"In reality, our business is good. Our shipments to retailers are on time and our sell-through at retail has been healthy thus far in fiscal 2009. We expect the timing issue that negatively influenced the results of the first quarter to be reversed in the second quarter and for it to have a minimal impact on our stated expectations for the full fiscal year."
“The contraction in our gross profit as a percentage of quarterly net sales was anticipated and principally reflected the impact of increases in the price of oil and a strengthening of the Chinese Yuan against the Dollar. We have addressed this issue and expect our gross profit as a percent of net sales to improve over the remainder of this year, returning to approximately 40 percent in fiscal year 2010.
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