Apparel maker Russell post marginal rise in sales

29 Jul '05

5 min read

Atlanta based apparel producer Russell Corporation announced fiscal 2005-second quarter earnings of $4.7 million or $.14 per diluted share on sales of $342.1 million, record sales for any second quarter.

The 18 percent gain in sales over last year's second quarter was led by increases associated with acquisitions, which generated more than $50 million in revenues. Excluding the incremental revenue related to acquisitions, the Company experienced a slight increase in sales for the quarter.

Operating income was $18.0 million in the quarter, down from last year's $23.9 million which included the one-time gain of $4.4 million associated with the sale of the Company's position in Marmot Mountain, Ltd.

Sales in the Activewear segment increased more than 10 percent and were particularly strong in the Artwear channel, which recorded sales increases of nearly 15 percent for the quarter. Increased product demand led to significant cost increases associated with ramping up production quickly and reacting to changes in style mix, negatively impacting second quarter profits. Further impacting earnings, Activewear did not achieve all of its cost savings goals.

For the Sporting Goods segment, sales increases of nearly 30 percent were driven by the 2004 acquisitions of AAI, Huffy Sports and Brooks. Overall, these acquisitions were on plan, and, as expected, had no material impact on EPS in the quarter. Excluding these acquisitions, revenue in the Sporting Goods segment declined 12 percent in the quarter.

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