NEW YORK--With sales continuing to race ahead, Norton McNaughton Inc. reported earnings rose 24.8 percent in the second quarter before a one-time charge a year ago.
The moderate-price women's career apparel manufacturer earned $3.9 million, or 49 cents a share, up from $3.1 million, or 43 cents, before the special charge. Net income in the 1994 quarter was reduced to $2.7 million, or 37 cents, after a $401,000 charge to pay dividends on preferred stock. The issue was redeemed in March 1994.
Sales rose 24.4 percent to $59.6 million from $47.9 million.
In the half ended May 5, earnings rose 36.5 percent to $5.3 million, or 65 cents, from $3.8 million, or 60 cents, excluding the charge. After the charge, year-ago net came to $3.4 million, or 53 cents.
Sales advanced 20.6 percent to $94.2 million from $78.1 million.
"In spite of the weak retail environment, we continue to experience significant revenue growth," said Sanford Greenberg, chairman and chief executive officer. Sales gains were driven by double-digit increases in its core Norton McNaughton career apparel line as well as product introductions, he said.
Modiano, a career line introduced in January 1994 for Sears and Mervyn's, was up more than 40 percent, said Amanda Bokman, chief financial officer, in a telephone interview. Pant-her, a private label line targeting women over 40 and made exclusively for May Department Stores, was up in the high single digits, she said.
Bokman also noted that Kate McNaughton suit line, introduced in January 1995, "performed nicely."
Gross margins stood at 27.5 percent, the same as the 1994 quarter.
Selling, general and administrative expenses increased to 16.4 percent of sales from 15.4 percent. Greenberg said this reflects the hiring of personnel to support new product lines.
"While this had an effect on our quarterly bottom line, we expect to gain operating leverage from our continued sales growth in the coming quarters," Greenberg said.
At the quarter's end, Norton McNaughton's backlog was up over 35 percent, according to Bokman.
In over-the-counter trading Tuesday, the firm's stock closed at 15 3/4, up 1 3/8.
--Fairchild News Service

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