Apparel fabric firm Dan River Inc on Thursday revealed it swung to a first quarter profit despite sluggish sales but said its second quarter outlook is "hazy" due to economic uncertainty.

The Virginia-based firm posted a net profit of $2.8 million versus a year-ago loss of $5.1m and said sales fell seven per cent to $137.4m from $158.4m.

Chairman and CEO, Joseph Lanier, commented: "While the company's earnings for the first quarter came in better than expected the immediate outlook is very hazy.

"The uncertainties imposed by the soft economy, high unemployment, and the war in Iraq have depressed consumer spending. This is reflected in the negative same stores sales comparisons reported by most retailers.

"In reaction, our customers are very skittish about placing new business and are very conservative in their order quantities. We expect this difficult retail environment to have a negative impact on our second quarter operating results."