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Hampshire's Q1 gross profit decline

09
May '08

Hampshire Group Limited announced its first quarter 2008 results and that it has filed its quarterly report on Form 10-Q for the quarter ended March 29, 2008 with the United States Securities and Exchange Commission. This press release should be read in conjunction with the filed quarterly report referred to in this release.

As disclosed in previous filings, Hampshire Group sold certain assets of its Shane Hunter subsidiary on April 15, 2008. For the periods discussed herein, Shane Hunter's results of operations were reflected in discontinued operations and excluded from continuing operations.

Net sales from continuing operations for the three months ended March 29, 2008 decreased 2.0% to $39.8 million from $40.6 million for the same period last year.

The decline was the result of a decrease in volume due mainly to weak retail conditions and partially offset by higher average unit selling prices. If these retail conditions persist, which the Company believes appears likely for the balance of the year, net sales will be adversely affected in 2008.

The loss from continuing operations before income taxes for the three months ended March 29, 2008 was $5.5 million compared to $4.9 million for the same period last year, which included special costs associated with the previously announced Audit Committee investigation and related matters of $0.5 million and $2.1 million, respectively.

The increase in the loss from continuing operations in 2008 was due mainly to a decline in gross profit to $9.3 million or 23.5% of net sales for the three months ended March 29, 2008 compared with $10.4 million or 25.6% of net sales for the same period last year.

This decline in gross profit was due primarily to the combined effects of changes in the mix of product sold, fluctuations in currency rates, and the increase in the costs of production and transportation.

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