Apparel maker Movie Star's gross profit down by 2%
11 Nov '05
2 min read
Leading apparel maker & supplier Movie Star Inc announced financial results for the three months ended September 30, 2005. Net sales increased 6.3 percent to $13.6 million in the fiscal 2006 first quarter, compared with $12.8 million in the same period last year.
Gross profit for the quarter declined to 27.2 percent from 29.9 percent as a result of a better product mix in the prior year, additional costs due to hurricane Katrina and higher markdowns in the current year as compared to the prior year. For the quarter, the Company recorded a net loss of $371,000, or $0.02 per share, compared with a net loss of $230,000, or $0.01 per share, in the first quarter of fiscal 2005.
Mel Knigin, President and Chief Executive Officer, stated: "They are optimistic that fiscal 2006's financial results will compare favorably with last year, even though the first quarter was adversely impacted by hurricane Katrina."
"As stated in a previous news release, the hurricane forced us to close major distribution center from August 29th to September 6th and operate with a reduced staff through the middle of October."
"The immediate actions we took to control this problem have reduced the negative impact of this unfortunate event. Had it not been for the hurricane, sales would have been higher and costs would have been lower in the quarter and the Company's financial results would have been better."
Knigin concluded, "For the second quarter of fiscal 2006, sales will be lower than the same period last year. However, in reviewing the orders for the second quarter, they expect an overall higher gross margin percentage to favorably impact the results for the first half of 2006. As a result, the gross margin percentage will be higher for the six months ending December 31, 2005 compared to the same period last year."
Movie Star Inc produces and sells ladies apparel, including sleepwear, robes, leisurewear, and daywear. Current collections include the Cinema Etoile premium line of intimate apparel and the Movie Star line of apparel sold as private label programs.
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