NEW YORK — Russell Corp.’s fourth-quarter earnings took a tumble as they were hit by higher costs and charges even as sales increased.
The athletic company’s fourth-quarter profits dropped 28.8 percent to $10.3 million, or 31 cents a share in the quarter ended Jan. 1, from $14.5 million, or 44 cents, a year earlier. The results included charges of about 6 cents from its 2004 acquisition of Huffy Sports Co., and severance costs and expenses related to its compliance of Sarbanes-Oxley accounting regulations, the company said.
For the year, earnings gained 11.4 percent to $47.9 million, or $1.46, from $43 million, or $1.32. Sales grew 9.4 percent to $1.3 billion.
Sales in the quarter grew 10.5 percent to $334 million and were helped by a strong performance from its Jerzees brand in the mass channel, said Jack Ward, Russell’s chairman and chief executive officer. Jerzees is the company’s largest sports apparel brand.
Ward said during a conference call Wednesday that Russell experienced growth in its three major categories: sports apparel, sporting equipment and athletic footwear. The company also is seeing increases in its acquired brands and in international sales.
Atlanta-based Russell has been in acquisition mode and has been expanding its brand portfolio. In December, the company bought Brooks Sports, the Bothell, Wash.-based running gear firm, for about $115 million, and purchased Huffy and equipment maker American Athletic in 2004, as well. In addition, Russell owns Moving Comfort, Bike Athletic and Spalding.
“We believe that Russell Corp. has laid the foundation for strong long-term sales and profit growth in all our major businesses,” Ward said on the call.
The company’s shares gained 27 cents, or 1.63 percent, to close at $16.85 on Wednesday in New York Stock Exchange trading.
Robert Koney, the company’s senior vice president and chief financial officer, reiterated during the call the company’s goal to see 2005 sales of about $1.5 billion to $1.52 billion, and earnings per share in the range of $1.55 to $1.65 a share.