NEW YORK — Hefty sales gains and the completion of its conversion to offshore sourcing helped Movie Star Inc.’s profits soar more than fivefold in the third quarter.
This story first appeared in the May 12, 2003 issue of WWD. Subscribe Today.
For the three months ended March 31, the New York-based manufacturer of women’s sleepwear, leisurewear and loungewear said net income swelled 433.9 percent to $961,000, or 6 cents a diluted share. By comparison, last year the company recorded earnings of $180,000, or 1 cent.
Sales for the period grew by more than a quarter, escalating 25.2 percent, to $16.9 million from $13.5 million. Contributing to the bottom-line improvement was the conversion to overseas sourcing, which lifted gross margins 520 basis points.
“As a result of new and improved offshore sourcing, our design and merchandise team has been able to put new product together that has allowed us to open new avenues of distribution,” said chief executive officer Mel Knigin. “Moreover, consolidating our distribution facilities and reducing debt and interest expense positioned us to lever the effect of higher sales levels, culminating in impressive bottom-line growth,” he added in a statement.
For the first nine months of the fiscal year, Movie Star reported earnings of $2.4 million, or 16 cents, versus last year’s profits of $876,000, or 6 cents, which included $43,000 of income from discontinued operations. Sales for the period rose 13.2 percent to $49.4 million from $43.6 million a year ago.