R.G. Barry Corporation reported net earnings rose 15.1 percent in the second quarter ended Dec. 28 to $6.1 million, or 53 cents per share. Revenues reached $48.0 million, slightly down from $48.5 million in the equivalent period last year.
The bottom line was particularly aided by a reducing in SG&A expenses by 9.5 percent to $10.8 million, representing 22.4 percent of sales versus 24.5 a year ago. Gross margins improved to 42.7 percent, up 30 basis points from the same period a year ago.
Footwear segment sales, which includes Dearfoams slippers, were basically flat at $39.1 million versus $39.5 million in the equivalent period last year. Softness at department store and off-price channels was offset by increased warehouse club and international shipments. Gross margins improved 30 basis points to 40 percent. Operating profit for the segment improved 12.4 percent to $10.7 million, reflected lower expenses in a number of categories, including reduced incentive bonus accruals.
In a conference call with analysts, Greg Tunney, president and CEO, said market data shows that Dearfoams has overtaken Uggs as the number one slipper brand at retail although other data reveals slipper’s share at mid-tier department stores is losing ground to newer channels like e-commerce.
He said Lee Smith, who formerly oversaw marketing and creative services functions at Dearfoams, became president of Dearfoams in October 2013. His early focus has been on strengthening customer relationships, including Wal-Mart; improving and clarifying product offerings; enhancing coordination with overseas suppliers; and reinvigorating the internal team. Said Tunney, “I can tell you there is a real energy among the footwear team and more important excitement.”
In its accessory segment, including Baggallini handbags and Foot Petals insoles, sales decreased 1.3 percent to $8.9 million due to reduce lower margin business in the off-price channel. Operating profits fell 33 percent to $1.0 million due to continuing investment in its long-term growth strategy for the segment.
Looking ahead, RG continues to expect consolidated revenue this year will be down slightly compared with fiscal 2013 due to “economic headwinds and a challenging retail environment.”
R.G. Barry also said Chairman of the Board Gordon B. Zacks, who grew R.G. Barry after it was founded by parents into the world's largest developer and marketer of soft, washable slippers, passed away at his Bexley, Ohio home following a brief illness. He was 80.
