Russell Corporation shares fell more than 11% last week after the company announced that it does not expect to achieve its previous fiscal year 2005 sales and earnings guidance. Sales for 2005 are now expected to be between $1.425 billion and $1.445 billion, but RML declined to provide new earnings guidance at the time of the warning.
The company said that sales shortfalls are most notable in Russell Athletic, Mossy Oak and the Spalding Group. RML said results are also being impacted by a “shift toward more promotional products.”
RML also said they will take “aggressive action” in early 2006 to “substantially improve ongoing earnings and to make Russell a stronger, more competitive company.” Market watchers expect those changes to include significant personnel cuts.
