Gross profit rose 9.2 percent to $113.0 million, or 30.2 percent of net revenues, for the second quarter of fiscal 2005, compared to $103.4 million, or 31.1 percet of net revenues, for the second quarter of fiscal 2004. Gross profit as a percentage of net revenues was primarily affected by a shift in product mix and expenses related to design and associated costs for the Company's new launches, including Op, Calvin Klein swimwear, Michael Kors and Axcelerate engineered by Speedo. The increase in gross profit for the second quarter of fiscal 2005 includes approximately $1.6 million related to the translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar relative to the second quarter of fiscal 2004.
As a result of the Company's continued focus on controlling costs, selling, general and administrative ("SG&A") expenses as a percentage of net revenues improved 110 basis points, notwithstanding the Company's continued support of its brands, including an additional $1.7 million investment in marketing over the prior year quarter.
SG&A expenses also include approximately $1.2 million related to a $1.5 million pre-tax charge for a non- trade receivable (with the balance of $0.3 million recorded in restructuring items). SG&A expense in the period was also unfavorably affected by approximately $1.0 million related to the translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar relative to the second quarter of fiscal 2004.
marketing@alchempro.com
