R.G. Barry Corp. more than doubled its first-quarter profit to $2.27 million, or 21 cents a share, in the three months ended Sept. 26 from $1.1 million, or 10 cents, a year ago. Revenue grew 14.9% to $29.4 million from $25.6 million last year.
Gross profit as a percent of sales of 41.7 percent, up from 39.6 percent reported in the first quarter of fiscal 2009.
The balance sheet continued to reflect the results of the company's overall performance:
* Cash, cash equivalents and short-term investments were at $18.8 million up from $9.6 million one year ago;
* Inventory of $23.7 million was down approximately 7.0 percent from $25.5 million at the end of the first quarter of fiscal 2009; and
* Net shareholders' equity rose to $48.2 million from $47.2 million in the comparable period last year.
“As today's results indicate, our performance thus far in fiscal 2010 has exceeded our most optimistic expectations,” said Greg Tunney, President and Chief Executive Officer. “Early sell-through at retail has been very healthy, and we have not seen the order delays and cancellations so common to many retail sectors at this time of the year. Our model continues performing well despite the challenging retail landscape and uneven macro-economic environment.
“Looking forward, we are excited about the upcoming holiday season and our anticipated performance for fiscal 2010. We are working closely with retailers to manage in-store inventory to ensure they have the appropriate mix of products to maximize their holiday sell-through over the next eight weeks. As the most productive period of our fiscal year, retail performance during the Christmas season remains critical to the Company's annual success,” he said.
Jose Ibarra, Senior Vice President Finance and Chief Financial Officer, added, “Our strong first quarter profitability reflects our recovery from the contraction in the gross profit percentage that we experienced last year. The contraction resulted from higher product costs driven by increased oil prices and a lack of supplier capacity in China during our fiscal 2009 buying cycle. The reversal of these inflationary trends together with our continuing focus on cost management in our operating model, should allow us to operate at an annual gross profit rate of around 40 percent through this fiscal year and for the foreseeable future. Since the profitability of our year is primarily dependent on how well our products sell-through at retail during the Christmas selling season, we find today's encouraging results to be an early indication of the upcoming holiday season's potential for our business.”
Tunney continued, “We indicated last quarter that we were planning fiscal 2010 revenue relatively flat due to the uncertainty still swirling about the economy and some segments of retail. Based upon open orders, our performance at retail thus far and our expectation that our products will continue to sell-through at or above last year's levels, we now expect to report modest annual revenue growth for our full fiscal year.”