NEW YORK — Strong performances in women’s wear and men’s sportswear coupled with successful cost-reduction measures led Hartmarx Corp. to improved earnings for the fourth quarter and the year.
This story first appeared in the January 22, 2004 issue of WWD. Subscribe Today.
For the three months ended Nov. 30, the Chicago-based apparel manufacturer saw earnings rise 4.4 percent to $3.1 million, or 9 cents a diluted share, beating Wall Street’s consensus estimate of 8 cents. Comparatively, the company reported earnings of $3 million, or 8 cents, in last year’s quarter.
Sales for the period inched up 0.3 percent to $151.5 million from $151.1 million.
Homi B. Patel, president and chief executive officer, said in an interview, “We’ve had improved earnings in every part of our business and anticipate continued improvement.”
In particular, said Patel, sportswear and women’s wear performed well for the quarter and the full year. “Both were up close to double digits for the year,” said Patel.
Sales in the company’s tailored business were flat to down for the quarter, said Patel.
Cost-reduction efforts ultimately helped Hartmarx achieve an impressive triple-digit improvement in earnings for the year. For the 12-month period earnings skyrocketed 905.2 percent to $8.7 million, or 25 cents a diluted share, compared with earnings of $866,000, or 2 cents, last year.
Cost of goods sold declined 140 basis points to 69.8 percent of sales during the year. Patel also pointed out that debt was reduced by $19 million to $104.4 million, the lowest level in over a decade. Interest expenses were cut by 52.1 percent to $7.4 million from $15.5 million last year.
Sales for the year declined 1.5 percent to $561.8 million from $570.3 million last year. As with the quarter, Patel said sales of tailored clothing were “tough” in the first half.
“Frankly, we were disappointed that we were not sales positive for the full year, but poor retail conditions for most of the year precluded that accomplishment,” said Patel in a statement. Patel took heart from improving economic conditions but warned that “consumer spending for apparel in department store channels still remains sluggish.”
Following the earnings report, shares of Hartmarx hit a 52-week high of $5.09 in intraday trading on the New York Stock Exchange on Wednesday, exceeding $5 for the first time since 1999. They ended the day at $4.92, up 42 cents, or 9.3 percent.