CUTTER & BUCK SEES LOSS IN 3RD QUARTER
Byline: Vicki M. Young
NEW YORK — Citing the sudden downturn in the U.S. economy and the unusually cold winter weather in the southern part of the U.S., Cutter & Buck has lowered third-quarter earnings expectations and said it expects a loss for the period.
The Seattle-based firm said it expects to post a net loss of between 7 cents and 10 cents a share and register sales of $32 million for the quarter ended Jan. 31. When the company reported second-quarter results on Dec. 7, it had anticipated sales of between $40 million and $42.5 million, and earnings per share of between 5 cents and 7 cents. The downward revision, the company said, resulted from lower-than-anticipated sales in the corporate and golf channels.
Sales in the prior-year period were $31.8 million.
Harvey Jones, chairman and chief executive officer, said in a statement, “The third quarter has historically been a small one for us, and so the shortfall in sales quickly translated into losses. We expect to achieve increased sales growth and return to profitability in our seasonally strong fourth quarter.”
The company said it will provide direction about the fourth quarter when it released third-quarter results on March 9, the day the firm is set to release third-quarter results.
Cutter & Buck also disclosed that inventory levels at the end of the third quarter increased to $61 million, a higher amount than usual because of the sales shortfall. The company pointed out that it “remains in a solid financial position with over $5 million in cash and approximately $21 million available under its $55 million credit facility.”
Jennifer Black, equity analyst at Wells Fargo Van Kasper, wrote in a research note Tuesday, “We are disappointed by the company’s earnings announcement but remain excited about the new fall lines that debuted at the PGA show in January+We continue to believe strongly in the Cutter & Buck brand names, especially in the golf channels and believe that the company can return to record earnings during the course of the next 12 months.”
For the nine months, Cutter & Buck said it will report income of between 31 cents and 34 cents a share.
Black lowered her fourth-quarter estimate to 55 cents from 62 cents, dropping the full-year earnings per share to 87 cents from $1.11.
Shares of the company Monday gained 19 cents, or 2.4 percent of their value, to close at $8.13 in Nasdaq trading.
