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Fashion accessories marketer Swank posts fall in sales
14 Nov '08
6 min read
Net income for our third quarter ended September 30, 2008 was $53,000, or $0.01 per fully diluted share, compared to net income for same time last year of $830,000, or $0.14 per fully diluted share.
Nine-Month Results:
For the nine-month period ended September 30, 2008 net sales decreased 7.4% to $79,158,000 compared to $85,521,000 last year. The decrease was due to lower gross shipments of our personal leather goods, jewelry, and belt merchandise as well as an increase in in-store promotional costs.
As discussed above, the decrease during the nine-month date period was due in part to the launch during last year's third quarter of our new "Tumi" belt and personal leather goods merchandise collections. Expenses associated with in-store markdowns, which we account for as a reduction to net sales, also increased 32.9% during the nine-month period compared to the same time last year reflecting both an extremely promotional retail environment and our efforts to stimulate retail sales to maintain or boost our market share.
As mentioned above, concern over the prospects of a recession both in the US and abroad accelerated during the third quarter in response to the ongoing turmoil in the financial markets which has adversely affected our shipments particularly to department store retailers.
Gross profit for the nine months ended September 30, 2008 fell $2,284,000 or 8.4% compared to the same time last year. Gross profit margin declined by .3% to 31.5% compared to 31.8% in the year-ago period. The decreases in overall gross profit and gross profit margin were the result of lower net sales this year, offset, in part, by a decrease in merchandise cost for belts, personal leather goods, and jewelry. The reductions in product-related expenses are attributable to efficiencies in our global supply chain as described above.
Selling and administrative expenses for the nine months ended September 30, 2008 increased by $1,745,000, or 7.5%, and as a percentage of net sales, increased to 31.7% compared to 27.3% during the same period in 2007.
Selling expenses increased by $747,000, or 4.2%, during this year's nine-month period compared to last year, primarily due to higher costs associated with our product development and sourcing organizations, travel expenses, and national advertising, partially offset by reductions in certain variable sales-related expenses associated with lower net sales.
Expenditures for advertising and promotion, including cooperative advertising (which is accounted for as a reduction to net sales), totaled $2,726,000 or 3.5%, of net sales compared to $2,600,000, or 3.1%, of net sales for the nine-month periods ended September 30, 2008 and 2007, respectively. We routinely make expenditures for advertising and promotion as necessary to maintain and enhance our business and to support our various branded businesses consistent with the requirements of our license agreements.
Nine-Month Results:
For the nine-month period ended September 30, 2008 net sales decreased 7.4% to $79,158,000 compared to $85,521,000 last year. The decrease was due to lower gross shipments of our personal leather goods, jewelry, and belt merchandise as well as an increase in in-store promotional costs.
As discussed above, the decrease during the nine-month date period was due in part to the launch during last year's third quarter of our new "Tumi" belt and personal leather goods merchandise collections. Expenses associated with in-store markdowns, which we account for as a reduction to net sales, also increased 32.9% during the nine-month period compared to the same time last year reflecting both an extremely promotional retail environment and our efforts to stimulate retail sales to maintain or boost our market share.
As mentioned above, concern over the prospects of a recession both in the US and abroad accelerated during the third quarter in response to the ongoing turmoil in the financial markets which has adversely affected our shipments particularly to department store retailers.
Gross profit for the nine months ended September 30, 2008 fell $2,284,000 or 8.4% compared to the same time last year. Gross profit margin declined by .3% to 31.5% compared to 31.8% in the year-ago period. The decreases in overall gross profit and gross profit margin were the result of lower net sales this year, offset, in part, by a decrease in merchandise cost for belts, personal leather goods, and jewelry. The reductions in product-related expenses are attributable to efficiencies in our global supply chain as described above.
Selling and administrative expenses for the nine months ended September 30, 2008 increased by $1,745,000, or 7.5%, and as a percentage of net sales, increased to 31.7% compared to 27.3% during the same period in 2007.
Selling expenses increased by $747,000, or 4.2%, during this year's nine-month period compared to last year, primarily due to higher costs associated with our product development and sourcing organizations, travel expenses, and national advertising, partially offset by reductions in certain variable sales-related expenses associated with lower net sales.
Expenditures for advertising and promotion, including cooperative advertising (which is accounted for as a reduction to net sales), totaled $2,726,000 or 3.5%, of net sales compared to $2,600,000, or 3.1%, of net sales for the nine-month periods ended September 30, 2008 and 2007, respectively. We routinely make expenditures for advertising and promotion as necessary to maintain and enhance our business and to support our various branded businesses consistent with the requirements of our license agreements.
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