US: Private label sales lift Tarrant Apparel Q2 profit by 32%
Private label clothing maker Tarrant Apparel Group today (13 August) reported a 32% hike in second quarter profit helped by strong sales growth in its private brands division.
Net income for the three months to 30 June was $809,000, or $0.03 per diluted share, compared to net income of $611,000, or $0.02 per diluted share for the same period last year.
Net sales for the Los Angeles, California based company were up 1.7% to $60.1m, from $59.1m in last year's quarter.
Private brand sales increased 7.0% to $12.2m from $11.4m, due to higher sales to Macy's Merchandising Group.
Private label sales increased in the quarter to $47.9m from $47.6m in the same period last year.
Gross profit was flat at $12.6m, and as a percentage of net sales, gross profit declined from 21.4% in the second quarter of 2006 to 20.9% in the second quarter of 2007.
"Our second quarter results reflect continued progress in building our private label business and another quarter where operating efficiencies produced solid results," said Gerard Guez, chairman and interim CEO of Tarrant Apparel Group.
"The second quarter results again reflect the popularity of the American Rag CIE line, along with the success of our private label business which helped to drive profitability."
For the six month period, the company swung to a net loss of $192,000, or $0.01 per share, compared to net income of $1.4m, or $0.05 per share in the first half of last year. Profit was hit by a $2m first quarter charge for due diligence and other fees incurred in its failed bid for The Buffalo Group.
In the first half, net sales slipped to $116.2m from $120.3m, with rising private label and American Rag sales helping to offset sales in three private brand lines.
The company reiterated its previous outlook for 2007 full-year revenue of $230m to $240m.
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