CHICAGO--Profits at Fruit of the Loom inched ahead 2.6 percent in the second quarter ended June 30 as robust sales of underwear and socks offset a sluggish performance in T-shirts.
Earnings rose to $39.7 million, or 52 cents a share, from $38.7 million, or 51 cents, a year ago. Sales in the quarter climbed 14.1 percent to $724.8 million from $635.2 million.
The quarter included severance costs of $4 million to $5 million to move Gitano's offices from New York to Bowling Green, Ky. About 125 jobs were affected. A spokesman said Gitano's sales were above year-ago levels and the jeanswear brand, acquired in March 1994, performed in line with expectations. The move will result in "substantial cost savings," he said.
In the half, earnings slumped 11.9 percent to $56.2 million, or 74 cents, from $63.8 million, or 84 cents. Sales rose 16.7 percent to $1.25 billion from $1.07 billion.
In a statement, William Farley, chairman, said sales growth in the quarter was led by a 25 percent hike at its consumer packaged goods segment, including underwear for the family and children's wear. This offset flat sales in T-shirts, particularly hurt by slack demand from screen printers.
The firm said the fourth quarter may include another charge related to production cutbacks to reduce T-shirt inventories. The second half may also include a charge to downsize operations in Europe. A spokesman said European sales were ahead more than 20 percent in the quarter, but profit margins are below plan.
--Fairchild News Service

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