Women's apparel maker Jaclyn Inc on Monday reported a drop in second quarter net earnings to $156,000, or $.06 per diluted share, from $899,000, or $.33 per diluted share, for the same period last year.

The company blamed lower margins on shipments, a more competitive environment for its premium business, and increased shipping costs in its children's apparel and women's sleepwear business.

Net sales for the three months ended 31 December slipped to $38.4 million from $38.7 million in last year's comparable quarter.

Net earnings for the six-month period were $1.02 million, or $.38 per diluted share, down from $1.26 million, or $.46 per diluted share, in the first six months of the prior year.

Net sales for the six-month period were $74.25 million, an increase from last year's $68.64 million.

Mr Allan Ginsburg, chairman of the board, said in a statement that "sales and earnings for the second half of fiscal 2005 are expected to be significantly below last year's second half, and, as a result, full year results are anticipated to be lower than in fiscal 2004."