Kellwood, Inc. first quarter sales increased 2.1% to $686.1 million, compared to $672.3 million last year due to a combination of organic growth of $5 million, or approximately one percent, and the acquisition of Phat Fashions which provided an additional $9 million in sales.
All of the organic growth for the quarter came from the Women's Sportswear segment, up 6.3%, and the Men's Sportswear segment, up 1.0%.
Kellwoods American Recreation division, which houses the Sierra Designs, Kelty, and Slumberjack brands, is grouped into the other soft goods category in company financial statements. The category posted a 19.2% decline in sales to $120.0 million compared to $143.2 million last year. In a conference call with analysts, Kellwood CEO Hal Upbin said that American Rec.s performance “from both a margin and operating perspective” was not an issue.
Net earnings for the quarter climbed 18.5% to $25.0 million or 90 cents per diluted share, versus $21.1 million, or 80 cents per share last year. The increase in earnings was driven by a 220 basis point increase in gross margin to 22.5% versus 20.3% last year. SG&A in the first quarter increased to 15.6% of sales, versus 14.0% last year.
