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Oakley's net income drops 80%, sales up in Q1
22 Apr '06
3 min read
Fashionable sunglasses maker and retailer Oakley Inc has announced financial results for the first quarter ended 31st March 2006.
The Foothill, California-based company reported an 80 percent drop in the first-quarter profit as strong sales of sunglasses failed to offset higher operating expenses and lower margins. Its clothing, footwear and accessories division net sales totaled $36.8 million, a drop of 8.8 percent compared with net sales of $40.3 million in the first quarter of 2006.
In the first-quarter sales increased by 7 percent to $151.7 million compared to $141.8 million last year while net income dropped to $1.9 million from $10.0 million in the year-earlier period on restructuring costs.
The first quarter 2006 operating expenses amounted to $77.8 million representing 51.3 percent of net sales in the quarter compared with $66.5 million or 46.9 percent of net sales in the first quarter of 2005.
The company incurred higher operating expenses in the quarter due to the addition of Oliver Peoples and new retail locations, stock option expense and an increase in marketing.
Scott Olivet, CEO of Oakley Inc, said, "Our first quarter results reflect the initial benefits of Oakley's renewed emphasis on optics."
"We executed well against an earlier sunglass release schedule and successfully launched our first women's eyewear collection. The women's launch was one of the most coordinated and powerful ever, combining excellent design and manufacturing execution with early, integrated sales and marketing effort around the world.
The Foothill, California-based company reported an 80 percent drop in the first-quarter profit as strong sales of sunglasses failed to offset higher operating expenses and lower margins. Its clothing, footwear and accessories division net sales totaled $36.8 million, a drop of 8.8 percent compared with net sales of $40.3 million in the first quarter of 2006.
In the first-quarter sales increased by 7 percent to $151.7 million compared to $141.8 million last year while net income dropped to $1.9 million from $10.0 million in the year-earlier period on restructuring costs.
The first quarter 2006 operating expenses amounted to $77.8 million representing 51.3 percent of net sales in the quarter compared with $66.5 million or 46.9 percent of net sales in the first quarter of 2005.
The company incurred higher operating expenses in the quarter due to the addition of Oliver Peoples and new retail locations, stock option expense and an increase in marketing.
Scott Olivet, CEO of Oakley Inc, said, "Our first quarter results reflect the initial benefits of Oakley's renewed emphasis on optics."
"We executed well against an earlier sunglass release schedule and successfully launched our first women's eyewear collection. The women's launch was one of the most coordinated and powerful ever, combining excellent design and manufacturing execution with early, integrated sales and marketing effort around the world.
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