NEW YORK — It was a very good second quarter for Kellwood Co.
The manufacturing giant on Wednesday said that earnings for the three months ended July 31 more than doubled, rising 114.2 percent to $3.9 million, or 16 cents a share, from $1.8 million, or 8 cents, in the year-ago quarter. On average, analysts had expected Kellwood to earn 12 cents a share. The results include earnings from Kellwood’s recent acquisition of Gerber Childrenswear.
Sales fell 8 percent to $463 million from $501 million last year, and sales of women’s sportswear slipped 19 percent to $267.1 million, or 57.6 percent of total sales.
The drop in sales was planned by the company due in part to an anticipated decrease in orders by retailers as a result of the lackluster retail environment. The downturn resulted in some excess capacity in its warehousing and distribution network, and Kellwood said it has identified actions to be taken that will cost $15 million before tax, or $9 million aftertax. As previously announced, an $8.9 million pretax charge, or $5.8 million aftertax, was booked in the first quarter. The current quarter’s results include a $700,000 charge for cost of goods sold in connection with the realignment program.
Hal J. Upbin, chairman, president and chief executive officer, said in a statement, "The retailers continue to be very cautious when placing orders for fall and holiday, with orders being booked 45 to 60 days later than normal."
Net income for the six months fell 53.8 percent to $12.5 million, or 53 cents a diluted share, from $26.9 million, or $1.18 per share. Sales dropped by 15 percent to $1 billion from $1.2 million. Sales of men’s sportswear were up 19 percent, while sales of women’s sportswear and soft goods were down 23 percent and 9 percent, respectively.
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