NEW YORK — Tandy Brands Accessories Inc. posted a 67.3 percent jump in second-quarter earnings despite a 12.9 percent decline in sales due to the firm's planned exit from several lower-margin categories.
For the three months ended Dec. 31, the company said net income rose to $3.4 million, or 50 cents a diluted share, from $2 million, or 30 cents, in the year-ago quarter. Sales dropped to $64.3 million from $73.9 million.
For the six months, net income jumped 78 percent, to $6.2 million, or 91 cents a diluted share, from $3.5 million, or 52 cents, in the year-ago period. Sales fell 9.8 percent, to $121.5 million from $134.8 million.
The sales decline for the second quarter resulted from planned exits from several women's product categories and from continued efforts to improve the quality of its distribution at the retail store level. The initiatives, however, also resulted in improved gross margin and net income, and the company was able to reduce its debt level from a year ago, the company said.
"As we enter into the second half of our 2007 fiscal year, we continue to identify opportunities to increase our market penetration and introduce new accessories products to our large, diversified base of retail customers and improve our financial performance," said J.S.B. Jenkins, president and chief executive officer, in a statement.
Jenkins also said that the firm had developed new fashion styles in its men's and women's product categories, and was developing new gift accessories items for the spring and summer seasons to improve the balance of its sales cycles in the second half of its fiscal year.