Apparel marketer and NYSE listed Ennis, Inc reported a 7.6 per cent year on year hike in sales for the three months ended November 30, 2014.
Third quarter of 2014 sales totaled $147.0 million, up 7.6 per cent from a year earlier quarter. Of this, apparel sales increased 5.1 per cent from $46.9 million to $49.3 million.
Gross profit for the reporting quarter stood at $36.5 million for the quarter, or 24.8 per cent of sales.
Apparel margins which continue to be negatively impacted by marketplace pricing pressures fell massively to 14.2 per cent as against 21.7 per cent from the prior year quarter.
Given the current and expected environment impacting the apparel division, Ennis recognized an estimated impairment charge relating to the apparel division of $93.3 million during the quarter.
As a result, net loss for the third quarter of 2014 was $71.2 million, or loss of $2.76 per diluted share.
Excluding the impairment charge, non-GAAP earnings would have been around $7.9 million, or $0.31 per diluted share compared to $9.3 million or $0.36 per diluted share for the same quarter last year.
During the third quarter of 2014, the apparel marketer generated $17.1 million in adjusted EBITDA compared to $18.9 million for the comparable quarter last year.
CEO Keith Walters said, “Our apparel group continues to be impacted by a challenging retail environment as pricing is difficult as the market remains lethargic.
He added, “Given this subdued environment, we believe discounting has been, and will continue to be, prevalent in the marketplace as a strategy to maintain market share.
“As such, the ability to raise prices to account for any increase in input costs will remain difficult and margins are continuing to be compressed below historical levels unless relieved from the cost side.”
The apparel segment at Ennis manufactures t-shirts and distributes t-shirts and other active-wear apparel through nine distribution centers located throughout North America.
