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Strong Yuan & rising prices affect R.G. Barry's Q3 results

14 May '07

3 min read

Since the end of fiscal 2003, the Company has completely revamped its business and it has returned to what it believes will be a consistent pattern of profitability, allowing for the full reversal of the deferred tax asset valuation and the resulting one-time benefit.

Gross profit as a percent of sales in the third quarter was 35.0 percent, down from 39.4 percent in the comparable period one year ago; and for the nine months, was 38.4 percent, down from 41.8 percent one year ago. The continuing impact of increased oil prices and the strengthening of the Chinese Yuan against the U.S. Dollar resulted in higher product costs and the corresponding decline in gross profit percentages for both the quarterly and nine-month periods.

In addition, a successful program of aggressive in-season markdowns used to stimulate retail sales of the Company's products during and after the lackluster 2006 holiday season also contributed to the reduced gross profit percentages.

Selling, general and administrative expenses for the quarter were relatively flat versus one year ago, at $6.8 million. Improved efficiencies in shipping and logistics and a continuing focus on cost-control and expense reduction resulted in a 10.0 percent decline to $24.1 million in SG&A expenses for the nine months when compared to the comparable period one year ago.

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R.G. Barry Corporation

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