NEW YORK — Slumping sales and higher costs pushed Michael Anthony Jewelers Inc. into the red in the third quarter.
For the three months ended Nov. 2, the Mt. Vernon, N.Y.-based jewelry marketer reported a net loss of $580,000, or 9 cents a diluted share. That compares with last year’s earnings of $1.5 million, or 24 cents.
Sales for the period declined 22.3 percent to $39.6 million from $51 million a year ago.
“Sales to some of the company’s largest customers were slower than last year’s comparable period because certain promotions from last year were not repeated,” said chief executive officer Michael Paolercio in a statement. “During last year’s third quarter, we also shipped substantial amounts of patriotic and religious jewelry, which did not recur this year. In addition, the loss of Service Merchandise as a major customer negatively impacted the company’s revenues.”
Service Merchandise filed for Chapter 11 bankruptcy court protection in March 1999 and announced that it would liquidate at the beginning of this year. Disappointing results last year in the wake of the Sept. 11 terrorist attacks made a reorganization implausible.
Gross profits at Michael Anthony sagged 230 basis points under the weight of higher gold prices and a larger volume of customer returns, and selling, general and administrative expenses increased to 20 percent of sales from 15 percent a year ago.
Overall, for the first nine months of the year, the firm reported a net loss of $2.6 million, or 42 cents a diluted share. Last year, the company had profits of $949,000, or 15 cents. Sales for the period fell 16.9 percent to $90 million from $108.4 million last year.