Fourth quarter sales for the Womenswear Group declined 15 percent to $80 million from $95 million last year. A more efficient sourcing structure and expense reductions resulted in a significant improvement in profitability. Operating earnings for the Womenswear Group increased 98 percent over last year to $6.2 million. The Company believes that this business has stabilized at the current revenue level and the recent improvement in profitability will continue into fiscal 2006.
Consolidated gross margins for the fourth quarter increased 360 basis points to 34.8 percent from 31.2 percent last year due to the increasing contribution of the Ben Sherman and Tommy Bahama brands. Royalty income rose 66 percent to $3.1 million for the fourth quarter from $1.9 million last year. The higher sales volume of Tommy Bahama licensees and the inclusion of Ben Sherman's licensing income generated the increase in royalty income. Fourth quarter operating margin increased to 9.8 percent from 9.3 percent last year.
Total inventories at quarter-end increased 45 percent to $169 million from $116 million last year. The increase was driven by additional inventory to support growth in the Menswear and Tommy Bahama Groups and the inclusion of $26 million in Ben Sherman inventory. The Company believes inventories are properly valued and appropriate to support the business going forward. Total accounts receivable increased 12 percent over last year to $197 million whichwas consistent with the fourth quarter sales increase of 14 percent.
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