Despite net sales tumbling more than 43 percent, US-based Hampshire Group, a provider of fashion apparel managed to hike its gross profit margin by 100 basis points in the second quarter of 2014.
Net sales at Hampshire Group plunged to $14.7 million in the second quarter of 2014, down
43.67 percent compared to $26.1 million in comparable quarter of 2013.
Hampshire said this was due in large part to the discontinuation of its license with Panama Jack.
However, gross profit margin rose to 21.4 percent compared to 20.4 percent in second quarter of 2013, which it said reflects sourcing and manufacturing synergies which it expects will continue to layer in throughout 2014.
Reduced overhead costs commensurate with the expected lower level of sales, helped Hampshire reduce SG&A expenses to $7.4 million in second quarter of 2014, compared to $8.4 million in same quarter of 2013.
Hampshire Group reported an adjusted EBITDA loss of $2.9 million in the quarter under review against loss of $3.5 million in comparable quarter of 2013.
Loss from operations stood at $4.3 million against a loss from operations of $3.6 million excluding the benefit of a one-time, non-cash gain of $6.1 million in the second quarter of 2013 from the favorable ruling in the Company’s lease litigation.
Loss from continuing operations was $4.6 million compared to a loss from continuing operations of $3.8 million excluding the aforementioned one-time gain in the prior year quarter.
CEO Paul Buxbaum said, ““While results for our second quarter were poor, they were not unexpected and are far from indicative of the progress we are making with the turnaround of our business”.
He added, “The second quarter will always be our seasonally weakest quarter. Sales were down significantly relative to the prior year, as we anticipated, largely due to the discontinuation of our license with Panama Jack, which had a meaningful sales contribution to the second quarter of 2013, coupled with the impact of market challenges by our retail customers.”
Hampshire Group, along with its wholly-owned subsidiaries, Hampshire Brands, Inc. and Rio Garment S.A. is a provider of fashion apparel across a broad range of product categories, channels of distribution and price points. The Company specializes in designing and marketing men’s sportswear.
