GREENSBORO, N.C. -- Battered by lower margins in its apparel fabric operations, Guilford Mills Inc. reported earnings slumped 36 percent in the second quarter ended March 27.

However, Guilford said it still expects to see improvement in apparel fabrics in the second half.

In the quarter, earnings fell to $3.9 million, or 28 cents a share, from $6.1 million, or 45 cents, a year earlier. Sales edged up 1.5 percent to $155.6 million from $153.3 million.

For the six months, profits slid 31.4 percent to $7.8 million, or 56 cents, from $11.3 million, or 83 cents. Sales inched ahead 0.8 percent to $313.2 million from $310.7 million.

Charles A. Hayes, chairman and chief executive officer, said the apparel group was hurt by a shift in consumer spending towards hard goods. Terrence E. Geremski, chief financial officer and treasurer, added that profits were hurt by such factors as poor apparel margins, weather-related shutdowns and startup costs.

Regarding the apparel segment, Geremski said the company experienced a shift in product mix from Lycra spandex blend products in the first quarter to lower-margin fabrics for robes, sleepwear and ready-to-wear fabrics. Because these markets are weaker, apparel margins deteriorated, he said.

Geremski said the apparel segment was also hurt by weakness in the commodity knit market.

Sales of warp knits in the half rose 3 to 4 percent with the help of strong sales of Lycra spandex blend products for shapewear and fashion apparel, he noted. Swimwear fabrics tumbled about 20 percent in the half while circular knit sales were about even with last year.

Looking ahead, Geremski said that based on the company's confirmed and expected bookings, it expects apparel to have a stronger second half of the year versus last year.

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