NEW YORK — A double-digit sales decline was insufficient to prevent Blair Corp. from reporting an even larger increase in second-quarter net income.
This story first appeared in the July 31, 2002 issue of WWD. Subscribe Today.
For the three months ended June 30, the Warren, Penn.-based multichannel direct marketer reported net income increased 28.4 percent to $7 million, or 88 cents a diluted share. That compares with last year’s profits of $5.5 million, or 69 cents.
Sales for the quarter diminished 10.1 percent to $147.5 million from $164.1 million last year.
Earnings for the year-ago quarter included $4 million of pretax interest income resulting from a favorable Internal Revenue Service tax settlement. Excluding that income, Blair would have posted a 140.8 percent increase in net income.
“Despite generally weak economic conditions, we continue to generate positive bottom-line results by further reducing overall operating expenses, while continuing to implement our strategic marketing efforts for future growth,” said chief executive officer John Zawacki in a statement.
Operating costs, which include advertising, general and administrative and interest expenses, decreased 14.7 percent in the quarter and 12.5 percent for the first half of the year. Moreover, cost of goods sold as a percentage of net sales decreased to 46.7 percent in the second quarter and to 47.2 percent in the six months. Blair said the cost reductions were attributable to more effective inventory management, which led to lower inventory liquidation costs.
Overall, for the six months ended June 30, Blair reported earnings gained 140.8 percent to $12.6 million, or $1.58 a diluted share. That compares with last year’s same-period profits of $5.3 million, or 66 cents. Excluding the aforesaid one-time gain in interest income, the company would have posted much more modest profits of $2.7 million, or 34 cents, in the year-ago period, and this year’s earnings would have more than quadrupled.