RUSSELL’S 1ST-QUARTER SHORTFALL PULLS DOWN PRICE ON BIG BOARD
ALEXANDER CITY, Ala. — Russell Corp.’s first-quarter earnings fell short of Wall Street expectations, sending its shares down 8 1/2 to 27 1/4 Friday on the New York Stock Exchange.
Earnings for the activewear maker eased 2.3 percent in the first quarter ended April 6, to $7 million from $7.2 million a year ago.
Earnings per share were 30 cents in each period.
Wall Street had been expecting around 34 cents a share.
J.P. Morgan downgraded the stock to “market performer” from “buy” and cut its second-quarter estimate by seven cents to 40 cents a share. Russell earned 42 cents in the year-ago second quarter.
Sales for the three months ended April 6 were flat at $258 million.
Gross profit rose to 31.8 percent of sales from 31.5 percent.
In a statement, chairman, president and chief executive officer John C. Adams said, “While we were disappointed with top-line growth for the quarter, we were pleased with the improvement at the gross margin level,, particularly in light of the pricing pressures on T-shirts experienced since late January in the wholesale market.”
Adams added that strong sales at Cross Creek and “sound performances” from International and Russell Athletic offset a “difficult environment” in Jerzees and licensed products.