ISRAEL: Intimate apparel maker Tefron issues Q2 profit warning
Lower than anticipated activewear and intimate apparel sales are likely to lead to a "significant" drop in second and third quarter profits Tefron Ltd warned today (5 July).
The Israel based clothing maker said it expects second quarter revenues to fall by 19% to $40.5m, and that third quarter sales are also likely to drop on delayed activewear orders and a seasonal slow-down in its swimwear products.
The company, which makes clothing for retailers such as Victoria's Secret, Nike and Gap, is also blaming the devaluation of the US dollar versus the New Israeli Shekel, and price reductions in older intimate apparel collections for its woes.
Mr Yos Shiran, chief executive officer of Tefron, said: "The expected reduction in our second quarter and third quarter revenues has led us to lower our expectations for the remainder of the year."
One bright spot for the seamless intimate apparel maker is a likely uptick in fourth quarter revenues on increased 'next generation' product orders from Nike.
As a result, Tefron now expects revenues for the year 2007 as a whole to be below those of 2006 and profitability to be significantly lower than that achieved in 2006.
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