ISRAEL: Tefron hit by falling Q2 revenues
Lower manufacturing levels and tough FOREX conditions have led to Tefron Ltd reporting a fall in revenues and earnings per share in the second quarter.
The apparel and active wear producer said that second quarter revenues were US$40.6m, representing an 18.3% decrease from second quarter 2006 revenues.
The decrease in revenues in the quarter was due to a reduction in sales of active-wear and intimate apparel during the quarter. This reduction was partly offset by a slight increase in sales of swimwear, the company said.
Second quarter gross margin was 14.0%, compared with a gross margin of 21.7% in the second quarter of 2006. Operating income totalled $1.0m (2.5% of revenues), compared with $6.6m (13.4% of revenues) in the second quarter of 2006.
"The decline in gross and operating margins in the second quarter was primarily due to the lower revenue and manufacturing levels in the quarter. In addition, the significant devaluation of the US Dollar versus the New Israeli Shekel, as well as the previously identified price reductions in older collections of Tefron's intimate apparel product line also impacted margins," a statement said.
Income from continuing operations was $0.8m, compared to $4.5m, in the second quarter of 2006.
Yos Shiran, CEO of Tefron, said: "Our second quarter results were in line with our updated expected financial results which we outlined in our announcement a month ago. Our active-wear sales were significantly reduced in the second quarter mainly due to a delay in orders. Our intimate apparel product line sales were also down in the second quarter mainly due to a reduction in sales to Victoria's Secret of older Cut & Sew collections which have been under continuous price pressure since the beginning of the year. Additionally, we have been informed by Victoria's Secret that they intend to gradually transfer their sourcing of an old Cut & Sew cotton program to India beginning next year. We do not expect this to have a material impact on our 2008 intimate apparel revenues and profitability."
Shiran continued: "For the third quarter, we expect active-wear and intimate apparel sales to decline compared to the third quarter of last year. Seasonally, swim-wear revenues are the lowest in the third quarter, and accordingly we expect overall revenues in the third quarter to be below those of last year. We believe the lower revenue level will lead to a net loss of around $1m in the third quarter. However, given our expectations for improved active-wear sales in the fourth quarter mainly due to positive indications received from Nike for increased 'next generation' product orders, and a seasonally stronger quarter for swimwear sales, we expect a strong improvement in sales and margins in the fourth quarter compared to the second quarter of 2007."
Limited Brands has posted fourth quarter net sales of $3.228bn, down from $4.025bn for Q4 last year....
The following is a general roundup of apparel and shoe chains' January 2008 sales results. The list will be updated as new results become available....
Victoria's Secret operator Limited Brands has announced the appointment of Martin Waters as executive vice president, international....
Sports Direct International is to sell its leasurewear brands in China after inking a GBP20m deal with domestic retailer ITAT Group Limited....
The shareholders of UK football brand Umbro have voted in favour of a proposed GBP285 (US$565m) takeover offer from sporting goods giant Nike today (31 January)....
Clothing, shoes and accessories make up the fastest-growing segment of the global online shopping industry and are now second only to books among the most popular goods bought on the internet, researc...
Nike vice president of global footwear design John Hoke is moving into the newly created role of vice president, global footwear, at the company's Converse brand....
UK retail group JJB Sports has indicated its support for Nike's US$582m all-cash offer to acquire Umbro....
- Will new Vietnam wage hinder competitiveness?
- Under Armour Lighthouse will disrupt production
- Digitisation to drive new apparel-making models
- How TAL Apparel is staying ahead of the game
- Ethiopia violence undermines sourcing strategies
- Marks & Spencer top for modern slavery reporting
- Bangladesh garment workers rally for higher wages
- MAS Holdings shares commitment to sustainability
- Gap to shutter all UK Banana Republic stores
- H&M CEO named sustainability leader
- Africa-Med strategic sourcing review – comparing East Africa, North Africa and Turkey
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Apparel (GLOBAL) - Industry Report
- Global Sports and Fitness Wear Market 2016-2020