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Apparel maker Russell post marginal rise in sales

29 Jul '05

5 min read

Mossy Oak experienced declines in revenue and profits for the quarter versus a year ago. Lower prices and the reduction of a major retail program resulted in a revenue decline of more than 30 percent in the quarter. Even though most of Mossy Oak's sales are planned for the second half, the negative impact to profits is not expected to be offset for the balance of the year.

Also in the Sporting Goods segment, increases in sales in the quarter for the Russell Athletic Group's base business only partially offset the absence of Major League Baseball and the discontinuance of the Discus brand at a major account.

"Given the expectations they had for the quarter, they are certainly disappointed with the results," said Jack Ward, chairman and CEO. "The good news is that there is solid consumer demand for their products and the major impacts experienced in the second quarter were primarily operational issues. They are rapidly addressing these issues, but they expect continued impact into the third quarter. They have already taken a number of steps to improve their cost position and further leverage their growth opportunities."

"Company strategy, to maximize their presence in the sporting goods industry by developing new business and expanding programs within their core brands, continues to be successful with their customers," Ward added. "An example is the integration of Spalding, AAI and Huffy Sports into the Spalding Group, the world's largest provider of basketball equipment. They are achieving both operational and sales synergies with a number of accounts beginning to introduce new Spalding products into their markets. They believe they can leverage the strength they have in basketballs with the product offerings from these integrated businesses to create a strong foundation and increased sales, particularly with the turn-around at Huffy Sports."

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