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Hartmarx declares Q2 fiscal 2006 earnings guidance
30 Jun '06
5 min read
"As of today's date, the Company has repurchased 494,500 Hartmarx shares at an average cost of $7.76, pursuant to the previously announced authorization to acquire up to 2 million of its common shares. We will continue to repurchase our stock on the open market as conditions warrant," Mr. Patel concluded.
Second quarter operating earnings were $8.5 million in 2006 compared to $10.7 million in 2005. For the six months, operating earnings declined to $14.8 million from $19.2 million in 2005. The decrease reflected a lower gross margin rate of 33.0 percent for the six months compared to 34.1 percent in 2005 and resulted from more off-price sales and customer allowances principally affecting moderate priced tailored clothing and certain of the women's lines.
Selling, general and administrative expenses were $84.3 million compared to $80.6 million in 2005 on the higher sales, representing 28.4 percent of sales compared to 27.8 percent in 2005. The $3.7 million increase reflected, among other things, incremental expenses of $4.4 million related to the Simply Blue business, $.7 million of stock compensation expense resulting from the adoption of FASB Statement No. 123R, effective for the Company's fiscal year beginning on December 1, 2005, and approximately $2.2 million of incremental costs associated with two new retail stores opened in the second half of 2005, the launch of the "hickey" brand and additional Hart Schaffner Marx brand marketing costs. Interest expense was $4.5 million year-to-date compared to $3.4 million in 2005, reflecting both the higher borrowing level due to the $21 million paid in October, 2005 for the Simply Blue acquisition as well as higher rates.
Second quarter operating earnings were $8.5 million in 2006 compared to $10.7 million in 2005. For the six months, operating earnings declined to $14.8 million from $19.2 million in 2005. The decrease reflected a lower gross margin rate of 33.0 percent for the six months compared to 34.1 percent in 2005 and resulted from more off-price sales and customer allowances principally affecting moderate priced tailored clothing and certain of the women's lines.
Selling, general and administrative expenses were $84.3 million compared to $80.6 million in 2005 on the higher sales, representing 28.4 percent of sales compared to 27.8 percent in 2005. The $3.7 million increase reflected, among other things, incremental expenses of $4.4 million related to the Simply Blue business, $.7 million of stock compensation expense resulting from the adoption of FASB Statement No. 123R, effective for the Company's fiscal year beginning on December 1, 2005, and approximately $2.2 million of incremental costs associated with two new retail stores opened in the second half of 2005, the launch of the "hickey" brand and additional Hart Schaffner Marx brand marketing costs. Interest expense was $4.5 million year-to-date compared to $3.4 million in 2005, reflecting both the higher borrowing level due to the $21 million paid in October, 2005 for the Simply Blue acquisition as well as higher rates.
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