We generally increased sales volume to a number of existing customers, which included some accounts to whom we first shipped jewelry merchandise last fall. The increase in our belt business was principally due to higher shipments of several private label programs. In addition, last fall we expanded our private label programs for certain accounts, which resulted in higher shipments during the quarter ended March 31, 2006 relative to the corresponding period last year. The decrease in net sales of our men's personal leather goods merchandise was mainly due to the launch of new merchandise and packaging associated with one of our branded programs which was shipped to retailers primarily during last year's first quarter.
Gross profit for the quarter ended March 31, 2006 increased $1,183,000 or 19 percent compared to the quarter ended March 31, 2005. For the quarter, gross profit expressed as a percentage of net sales increased to 33.0 percent from 31.9 percent compared to the same period last year.
The increase in gross profit during the quarter ended March 31, 2006, both in terms of dollars and as a percentage of net sales, was primarily due to increased net sales, especially with regard to higher-margin men's jewelry, and improved margins for our personal leather goods merchandise, particularly for branded collections.
The improvement in personal leather goods margin is largely attributable to certain changes made in the sourcing and development of our merchandise. Inventory-related expenses were also lower during the quarter, reflecting a reduction in costs associated with the disposition of excess and discontinued inventory. Royalty costs expense increased 17 percent during the quarter in response to both higher net sales and, in certain circumstances, increases in minimum obligations due to licensors relative to the corresponding period in 2005.
marketing@alchempro.com
