BURLINGTON PROFITS DECLINE 32.2 PERCENT IN 1ST QUARTER
GREENSBORO, N.C. — Citing pressure on margins, profits at Burlington Industries sank 32.2 percent in the first quarter.
The company blamed retail resistance to price hikes needed to cover higher raw material costs.
In the quarter ended Dec. 31, the textile manufacturer’s earnings fell to $12.8 million, or 19 cents a share. After a pretax gain of $3.8 million on the sale of stock in a former division, C.H. Masland & Sons, a carpet maker, Burlington earned $19 million, or 28 cents, a year ago. Edward Johnson, analyst at Johnson Redbook Service, said he had projected earnings per share of 15 cents.
“The quarter was better than expected because of a smaller loss in knits, better pricing in denim and a better product mix,” Johnson noted. He said the firm expects its knit division to post a profit in 1996. Sales of apparel fabrics rose 9.9 percent, while sales of interior furnishings segment, adjusted for the sale of the Decorative Fabrics business in April 1994, moved ahead 18.4 percent.
Total sales gained 9.1 percent to $514.8 million against $471.9 million.
George Henderson, president and chief executive officer, said that as expected, income declined because of lower margins.
Henderson noted demand remains strong and the company is beginning to see an improvement in prices for apparel products.
“The dollar value of our order backlog at Dec. 31 was the highest for any quarter in the last five years,” he said.
Johnson projects earnings per share of 27 cents for the second quarter against 39 cents a year ago. For the full year, Johnson expects earnings per share of $1.20 against $1.38 from continuing operations.
“The price increases are tough to pass on,” he said. “Burlington is having a difficult time with jeans producers, who are having a difficult time with retailers.”