NEW YORK — Shares of Tefron Ltd. got pounded on Wednesday after it said it is expecting to post a second-quarter loss and profoundly weaker sales.
Shares of Tefron lost 82 cents, or 19.8 percent, to close the day at $3.32 on the New York Stock Exchange. Shares over the last year have traded as high as $4.84, reached on June 3, and as low as $2.90, reached on Aug. 6.
The Israeli producer of intimate apparel said it now expects to post a loss of $1 million for the second quarter ending June 30, but said it expects to break even in the September-ending third quarter, as a result of cost savings from the now-completed production shift to Israel from the U.S.
However, it said the disruptions from the production shift, a decrease in sales to its largest customer and unfavorable market conditions stalling the rollout of an activewear line would cause sales to crumble for the combined second and third quarters to roughly $41 million, compared with sales of $49.7 million in the second quarter and $50.1 million in the third. This would represent nearly a 60 percent year-over-year revenue decline.
In a statement, Tefron said it blamed the loss on the “current level of sales, together with additional costs associated with the shift in production to Israel and the appreciation of the Israeli shekel against the U.S. dollar since the end of the first quarter.”
The company also expects profit and sales improvement in the fourth quarter, helped by the introduction of several new activewear products toward the end of the fourth quarter and the beginning of the first quarter. In addition, it said it has received indication from its largest customer that orders for the fourth quarter are expected to improve.
“We are optimistic about the prospects of our activewear program,” Yos Shiran, chief executive of Tefron, said in a statement.
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