DAN RIVER QUARTER DROPS INTO THE RED
NEW YORK — Dan River Inc. said Monday it expected a fourth-quarter loss, rather than a profit as previously forecast, due to the challenging retail environment.
The company said in a statement that it now anticipates sales for the year ended Dec. 30 of $663 million and to post earnings per share in the range of 48 and 51 cents for the year.
The company earned 59 cents a share during the first nine months of the fiscal year.
The Danville, Va.-based fabric manufacturer said that when it announced third-quarter results in October, it expected annual sales of $670 million and earnings per basic share of around 68 cents. Consensus estimates called for the firm to see earnings per share of 68 cents for the year and 9 cents for the fourth quarter.
“The shortfall is due mainly to the severity of the retail sluggishness, primarily in sales of home fashions, which undercut margins in the fourth quarter,” chairman and chief executive officer Joseph Lanier Jr. said in a statement. “Our commitment to inventory reduction resulted in sales of a less-favorable mix of products than we had previously projected, which put additional pressure on margins.”
Burlington Industries and Unifi are among the textile firms that have recently reported quarterly losses due, at least in part, to the difficult retail environment. Sluggish sales in the final quarter of last year have caused a number of retailers, particularly mass merchants, to adjust inventories and also have compelled textile mills to curtail production.
“Dan River has faced the same challenges as other companies in our industry,” said Lanier.
Dan River shares fell 30 cents to $2.80 Monday in New York Stock Exchange trading.