Dallas—Reporting that sales in its fiscal first quarter 2011 suffered from reduced belt assortments, lack of reorders and delayed shipping, Tandy Brands Accessories said Wednesday it has a net lost of $2.7 million.
Tandy Brands Accessories’ net loss compares to a net income of $1.1 million, or 15 cents per share, last year.
Meanwhile, first quarter sales fell by $8 million, hitting $29.2 million as Tandy experienced reduced belt assortments, curtailed levels of replenishment orders by a significant customer and the timing of certain shipments to other customers being delayed until later in the fiscal year. Net sales of $2.9 million for the gifts segment decreased $2.5 million over the prior year first quarter due to retailers delaying in-store dates.
“Although the first quarter presented challenges from a top-line perspective, we remain optimistic about our medium-term prospects,” said Rod McGeachy, president and ceo. “Due to a recent arrangement with a significant customer, we expect to regain lost belt market share on an annualized basis. Additionally, our gifts sales are occurring later this year, but we expect strong second quarter selling and fiscal year 2011 gifts net sales to be consistent with fiscal year 2010.”
Wolverine License Added
Tandy Brands Accessories ended the first quarter with $31.7 million in working capital and $21.6 million in borrowings.
Looking forward, the company expects sales to decline in the mid-single digit range in fiscal year 2011. In addition, gross margins are expected to decline.
During the quarter, the company entered into a new licensing agreement to sell products under the Wolverine label. “Our new license agreement with Wolverine is proving to be an excellent addition to our brand portfolio, and we continue to pursue similar license agreements to further expand our product offerings,” said McGeachy.
“Furthermore, we continue to seek acquisitions of branded companies in order to achieve our long-term growth objectives,” he added.
Tandy Brands, a leading designer and marketer of branded men’s, women’s and children’s accessories, including belts, gifts, small leather goods, eyewear, neckwear, and sporting goods, has a broad brand portfolio including licensed brands Wrangler, Totes, Dockers and Eileen West as well as its proprietary brands including Rolfs, Canterbury, Surplus, Princess Gardner and Amity.