NEW YORK — Movie Star Inc. reported earnings fell 34.9 percent in the second quarter ended Dec. 31. Results include special gains in the second quarter this year and a year ago.
In the quarter, after a gain of $984,000 from the sale of manufacturing plants, earnings totaled $782,000, or 6 cents a share. A year ago, after a gain of $735,000, also from the sale of plants, earnings totaled $1.2 million, or 8 cents. The innerwear manufacturer, which also makes men’s shirts and operates 24 outlet stores, said price competition and excess plant capacity combined with lower sales to depress gross profits in the quarter. This, plus a higher tax rate drove down net income, Movie Star said.
Selling, general and administrative expenses declined 9 percent in the quarter. Lower sales to existing customers, reduced contract manufacturing and the sale of the children’s wear unit resulted in a 6.9 percent sales drop, to $35 million from $37.6 million, the company reported.
Mark M. David, chairman and chief executive officer, said one of the firm’s Mississippi facilities will be closed by June. The company is also analyzing its merchandise and customer mix to find ways to boost sales with better gross margins. Other measures include corrections in production scheduling and cuts in fixed overhead and inventory.
In the six months, earnings inched up 1.2 percent, to $1.97 million, or 14 cents, from $1.94 million, or 14 cents. Sales slipped 6.1 percent, to $64.9 million from $69.2 million.