Maidenform Brands Inc.’s first-quarter profits fell 60 percent as the company cut prices to drive inventory productivity.
Net profits fell to $5.8 million, or 25 cents a diluted share, from $14.5 million, or 62 cents, a year earlier. Earnings per share came in 1 cent ahead of the 24 cents analysts expected. Sales for the three months ended March 31 slipped 3.7 percent to $157.5 million from $163.6 million.
“Despite a choppy retail environment for women’s intimate apparel, we grew domestic share across channels and categories in the first quarter, which reflects the power of our brands and the relevance of our products,” said Maurice Reznik, chief executive officer.
The firm’s wholesale sales to department stores and national chains fell 8 percent to $58.6 million, as sales to mass merchants inched up 1.7 percent to $59 million. Maidenform’s own retail sales rose 9.5 percent to $12.7 million.
Gross margins shrank to 27.2 percent of sales from 34.1 percent a year earlier. “The decrease in gross margin was a result of increased promotional and liquidation activity to drive inventory productivity,” the company said. “Partially offsetting this decrease was a favorable mix of product and channel sales during the quarter.”