RG Barry Posts Q2 Increase in Sales, Profit

baggallini

Spring at baggallini

Pickerington, OH—RG Barry Corp., owner of Dearfoams and baggallini, today reported a rise in its second quarter profit and sales as margins improved despite the tough promotional environment during holiday.

For the quarter ended Dec. 28, RG Barry posted net income of $6.1 million, or 53 cents a share, compared with $5.3 million, or 46 cents a share, a year ago.

Net revenue hit $48 million in line with the $48.5 million in the same period last year. That was just below the $51.09 million in sales analysts had expected though.

Gross profit as a percent of net sales edged up to 42.7%, from 42.4% one year ago.

Selling, general and administrative expenses declined 9.5% to $10.8 million versus $11.9 million in the second quarter last year.

By division, the company’s footwear sales, which include its Dearfoams slipper business, declined 7.5% to $71.9 million reflecting “soft July-to-December 2013 retail business primarily in department store and off-price channels, partially offset by increased warehouse club and international shipments.” Footwear net sales for the second quarter were $39.1 million versus $39.5 million last year.

Chairman Gordon Zacks Dies

Due to favorable changes in product and customer mix, gross profit in the footwear segment rose 90 basis points to 41.4% from 40.5% in the comparable period of fiscal 2013.

In RG Barry’s accessories division, which includes baggallini, sales in the first two quarters was flat at $18 million. For the second quarter, accessories net sales decreased 1.3% to $8.9 million versus one year ago. The decline primarily resulted from the previously discussed strategic decision to reduce lower margin business in the off-price channel.

Gross profit in the accessories division rose 2.5% to $10.2 million, and gross profit as a percentage of net sales expanded 140 basis points to 56.8%. Quarterly gross profit and margins were relatively flat at $4.8 million or 54.4% of net sales.

“We ended the half with a good retail sell-through. Our strategy of continuing to eliminate underperforming or lower margin components of the business impacted the top line, but gross margin as a percent of net sales improved by 110 basis points, despite the highly-promotional retail environment,” said Jose Ibarra, SVP chief financial officer,

“We continue to experience economic headwinds and a challenging retail environment. While the company is financially strong and well positioned to meet its long-term goals, these factors have led us to reaffirm our view that consolidated revenue this year will be down slightly compared with fiscal 2013,” Ibarra said.

RG Barry also declared a quarterly dividend, which is scheduled for Tuesday, March 4. Investors of record on Monday, February 17 will be given a dividend of 10 cents a share.

In other news, RG Barry said Gordon Zaks, chairman of the company, died Feb. 1 after a brief illness. He was 80.

R.G. Barry was founded by Zacks’ parents, Aaron Zacks and Florence Zacks Melton, in 1945. He joined the business in 1955, was named president in 1965 and became chairman and chief executive in 1979. Zacks retired from the CEO job in 2004.

“Gordon lived an amazing life and faced each day and every challenge with a passion and joy that infected all those around him,” CEO Greg Tunney said. “He was a sharing mentor to many, including me. His entrepreneurial spirit, vision and guidance will be sorely missed by all who knew and worked with him.”

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com