Russell Corporation 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 and $1.445 billion, and the Company is not providing new earnings guidance at this time.
Additionally, the Company plans to take aggressive action in early 2006 to substantially improve ongoing earnings and to make Russell a stronger, more competitive company. These plans are expected to be announced no later than the regular earnings conference call.
The revisions for 2005 are primarily the result of lower than anticipated sales at retail and extra expenses to expedite orders associated with supply issues. Sales shortfalls are most notable in Russell Athletic, Mossy Oak and the Spalding Group. Results are also being impacted by a shift toward more promotional products.
According to Jack Ward, Chairman and CEO, “While we are extremely disappointed in our recent performance, we are encouraged by our improved prospects for 2006. We are pleased with consumer acceptance of many new Russell products such as our technical running products from Brooks, performance apparel such as Dri-Power(R), more innovative sporting goods products, including Spalding's NeverFlat(TM) basketball, and the continued growth of the JERZEES(R) brand in the Artwear channel.”
