HARTMARX PRETAX NET UP 18.4%
Byline: Catherine M. Curan
NEW YORK — Hartmarx Corp. posted an 18.4 percent gain in pretax earnings for the fourth quarter ended Nov. 30. Fourth-quarter pretax profits rose to $10.9 million, or 34 cents a share, from $9.2 million. Results topped or met Wall Street analysts’ projections of pretax earnings per share in a range of 28 cents to 34 cents. After a $9.4 million tax gain, net earnings rose to $20.3 million, or 63 cents a share, against $9 million, or 29 cents a year earlier.
Sales declined 2.4 percent to $179.7 million from $184.1 million. The results were aided by improvements in the Men’s Apparel Group and Kuppenheimer businesses and lower interest expense. Hartmarx’s women’s golfwear lines and Barrie Pace, Ltd., a women’s career wear catalog, posted higher sales for the year, but the International Women’s Apparel group produced negative results caused by substantial downsizing, said Hartmarx’s chairman and chief executive officer, Elbert O. Hand.
Timothy Kroll, analyst at Mesirow Financial, said that in 1995 the firm “will probably have to make a decision on its women’s lines,” which have been a drag on profits.
Homi Patel, president and chief operating officer of Hartmarx, said, “We’re committed to the women’s career and golf apparel business.”
He noted that Barrie Pace has always been profitable, with 10 percent sales growth last year. He projected double-digit sales growth and a significant gain in profitability for the division in 1995. For the International Women’s Apparel unit, Patel said, “The Austin Reed line is growing very rapidly. We expect a significant reversal of the downward trend in profitabilty” at IWA.
In the year, pretax earnings jumped 65 percent to $10.6 million from $6.4 million. After the tax gain and a $3.9 million charge for early repayment of debt, net earnings totaled $16.1 million, or 50 cents, against $6.2 million or 20 cents. Sales for the year declined 2 percent to $717.7 million from $732 million. On a comparable basis sales were up. The company currently operates 94 Kuppenheimer locations, down from 115 at Jan 31, 1994. Hand noted that total debt was slashed by $45 million from a year ago, increasing equity-to-capital ratio to 41 percent from 18 percent two years ago.
— Fairchild News Service