International Textile Group Inc., parent of Cone Denim and Burlington Worldwide, reported gross profit in the three months ended June 30 increased 6.9 percent to $24.9 million from $23.3 million in the year-ago period.

The textile manufacturer, headquartered in Greensboro, N.C., said consolidated net sales in the three months fell 5.7 percent to $148.4 million from $157.3 million last year.

ITG said profits were helped by lower raw material and energy costs, higher selling prices and an improved product mix in the U.S. government wool uniform and synthetic fabrics businesses, higher sales volumes in the synthetic fabrics and technical fabrics businesses, and favorable impacts from changes in foreign currency exchange rates.

Such improvements were partially offset by lower sales volumes in the worsted wool, U.S. government wool uniform and denim businesses; higher manufacturing costs due to lower volumes in certain businesses, and lower selling prices and a less favorable product mix in the technical fabrics and airbag businesses.

The sales falloff was blamed on lower demand at the retail level, competitive market pressures in denim and worsted wool, lower demand in the U.S. government wool uniform business, as well as lower selling prices in denim due to lower cotton prices, fashion shifts and increased competition. These were partially offset by higher sales volumes related to new programs in the synthetic fabrics business, increased demand for certain technical fabrics, as well as higher selling prices and an improved product mix primarily in the U.S. government wool uniform, worsted wool and synthetic fabrics businesses, ITG noted.

Operating income in the quarter increased 10.6 percent to $15.7 million from $14.2 million.

Looking at specific segments, net sales in bottom-weight woven fabrics fell 5.9 percent to $137.8 million from $146.5 million, the result of lower demand and competitive pressures at the retail level for denim, competitive pressures in the denim and worsted wool businesses, as well as lower selling prices. This was somewhat offset by higher sales related to new programs in the synthetic fabrics business and increased demand for certain technical fabrics products,

Income in the bottom-weight woven fabrics segment increased 11 percent to $15 million from $13.5 million thanks to lower raw material and energy costs, higher selling prices and an improved product mix in the U.S. government wool uniform and synthetic fabrics businesses, higher sales in the synthetic fabrics and technical fabrics businesses, and favorable impacts from changes in foreign currency exchange rates.

ITG noted that capital investment in the U.S. textile industry has increased in recent periods. The textile industry in general has seen a slowdown or leveling off of imports of textile products into the U.S. from other countries over the last few years due to, among other things, a narrowing of labor, energy and production cost differentials, the slowing pace of economic growth in China and an increased interest in U.S.-produced goods, partially offset in recent periods by lower shipping costs due to lower fuel prices and a strong dollar keeping the cost of foreign goods from rising.

“While new programs, improved consumer confidence and certain cyclical patterns in recent periods have led to gains in certain of our businesses, competitive pressures, lower demand at the retail level affecting certain of our businesses, continued budget constraints and inventory adjustments related to certain government programs, the end or reduction of certain programs, and continued uncertainty regarding longer-term macroeconomic growth prospects and the overall economic environment continue to negatively affect certain of our businesses,” the company said in its filing with the Securities and Exchange Commission.

“Uncertainty regarding unemployment levels, further government and municipal deficit reduction measures, and the prospects for sustained economic recovery continue to impact consumer and governmental spending, which could have adverse effects in the significant markets in which we operate,” ITG added. “The company has taken, and expects to continue to take, steps to counter this continued economic uncertainty. These actions include, among other things, implementing cost saving initiatives and sourcing decisions, negotiating higher sales prices for certain products, negotiating new working capital and other financing arrangements, focusing on new product development, and a focus on consistent productivity improvements.”

In the six months, consolidated net sales fell 1.3 percent to $297.6 million from $301.4 million. Gross profit in the six months increased 18.9 percent to $49.2 million from $41.4 million. Operating income rose 35 percent to $27.8 million from $20.6 million.