Children's apparel manufacturer OshKosh B'Gosh Inc has reported a drop in first quarter profits of 4.3 per cent citing poor weather conditions and a tough economy for the drop in customer traffic and sales.

The company reported that its net income for the quarter had dropped to $4.5m, or 36 cents a share, from the $4.7m, or 37 cents a share, recorded in the same period last year.

The results failed to meet analysts expectations which had been posted at 39 cents a share.

Despite missing its targets, the company was optimistic that sale sin the second half would pick up and that it would report a 5 - 7 per cent unit increase in its wholesale trading.

Total sales for the first quarter rose 4.5 per cent to $99.4m from the $95.1m posted last year and domestic wholesale unit shipments rose about 22 per cent compared to last year.

Douglas Hyde, president and chief executive of OshKosh, said: "The first three months of 2001 proved to be a difficult and challenging retail environment. We believe that a combination of a generally negative economic environment, along with adverse weather conditions, impacted customer store traffic".