• Q1 net earnings plummet 66% to $3.9m
  • Gross profit drops to 19.8% from 27.7%
  • Net sales slips 0.5% to $142.5m

Apparel and printed materials maker Ennis saw its first quarter net earnings plummet on the back of recent acquisitions and higher raw material costs.

Net earnings for the quarter ended 31 May slumped 66% to US$3.9m. Operating income also declined to $6.2m, compared to $18.8m the same period last year.

Gross profit margins dropped to 19.8% from 27.7% last year due to lower margins at recent acquisitions Printegra and PrintXcel, as well as higher yarn costs.

Net sales also declined 0.5% to $142.5m. Apparel sales fell 27% to $55.2m, while print sales for increased to $87.3m, compared to $67.1m the same period last year.

Keith Walters, chairman, CEO and president, said: "Our apparel results, as expected, continue to be negatively impacted by higher raw material costs flowing into cost of sales.

"This negative impact will gradually abate over the next quarter or two as the higher cost items, which have been in our finished goods inventory and flowing into our cost of sales, are replaced with items manufactured with significantly lower raw material costs."