• Q2 profit up 2.2% to $10m 
  • Sales increase 12.2% to $151.8m
  • Decline of cotton futures could help margins 

Higher sales have helped diversified apparel business Ennis Inc to an increase in second-quarter net profit, although the company says it continues to be impacted by "a challenging domestic retail environment."

The company's net earnings reached US$10m for the three month to 31 August, compared to $9.8m in the same period of the prior year.

Net sales increased 12.2% to $151.8m from $135.3m. Print sales jumped 23.9% to $97.9m, while apparel sales declined 4.1% to $54m.

Although apparel sales improved by 1% on a volume basis, a 5.1% decline in average selling price resulted in a fall in revenues.

Nonetheless chairman and CEO Keith Walters said: "Overall we are pleased with the results for the second quarter."

Given the "subdued" domestic retail environment, he noted that discounting continues to be prevalent, making it difficult for manufacturers to raise prices to account for higher input costs, resulting in margins being compressed below historical levels. 

But, Walters said, falling cotton futures may positively impact manufacturers' margins.

"Overall, while the retail market continues to be anaemic, we will continue to stay vigilant to the task at hand," he added.