Denim and sportswear firm IC Isaacs has reported a slight decrease in income but said it is still confident of reaching its full-year financial objectives.

Net income dropped 8.7% to US$2.1m compared to $2.3m last year, while net sales grew 4% to $21.3m from $20.3m the year before.

Chairman and CEP Peter Rizzo said: "During the quarter, we continued to operate the business well and to position the Girbaud business for growth over the long term.

"We built in a broader range of non-denim classifications and built our fashion-basic inventory levels to take advantage of opportunities we saw developing in the second half.

"Even with these efforts, the third quarter was challenging for many of our specialty retail customers and while we shipped well against our backlog during the third quarter, we did not see the level of reorder activity that we had expected.

"Even so, with a variety of planned marketing and product initiatives, we continue to believe we can achieve our financial objectives for the fiscal year."

For the 2006 fiscal year, despite a slower third quarter than anticipated, the company believes it is likely to report full-year earnings toward the low end of its previously issued diluted earnings per share guidance of $0.76 to $0.79 per share. The low end of the guidance range represents growth of approximately 25% compared to last year's operating result of $0.61.

Rizzo concluded: "We continue to evaluate various ways in which we can diversify our business and are moving down several strategic paths to address further opportunities for growth. We believe the steps we are taking now will enhance our brand and broaden our overall offering in the upcoming fiscal year."