Q1 sales for Phoenix's Royal Robbins brand drop 9.6 percent
For the first quarter, sales for Phoenix Footwear Group's (Amex: PXG) Royal Robbins brand dropped 9.6 percent on lower sales volumes related to the loss of two large customers.
Net sales for Royal Robbins were $10.1 million, compared to $11.2 million a year ago. Phoenix said the decrease was primarily attributable to the loss of two large customers -- Dick's Sporting Goods and Academy Sports -- during fall 2006.
First-quarter net sales for the company as a whole increased 4.3% to $42.1 million compared to $40.3 million for the first quarter of fiscal 2006.
The company reported net income of $414,000, or $0.05 per share, compared to 2006's $3.0 million, or $0.37 per diluted share. The first quarter of 2007 included increased corporate expenditures of approximately $1.0 million, or $0.07 per diluted share. The first quarter of 2006 included a net one-time gain associated with the Altama purchase price adjustment of $1.5 million, or $0.19 per diluted share.
Gross margin in the first quarter of fiscal 2007 was 35.5%, compared to 38.9% in the first quarter of 2006. The decrease was caused by lower sales of Royal Robbins and SoftWalk, which represent high margin brands, as well as an increase in sales of military boot and accessories which both generate relatively lower margins, Phoenix said.
Operating costs increased 22.9% to $12.7 million, compared to $10.3 million in the first quarter of fiscal 2006. Operating income was $2.3 million, compared to operating income of $5.4 million in the first quarter of fiscal 2006.
Results for Phoenix's other business units were: First-quarter net sales for H.S. Trask decreased 48.6% to $1.2 million in the first quarter, compared to $2.4 million a year ago. Net sales from the Tommy Bahama Footwear brand decreased 46.5% to $2.3 million, compared to $4.3 million in the first quarter a year ago. Chambers' net sales increased 28.3% to $9.9 million, compared to $7.7 million in 2006. Altama's net sales increased 54.0% to $11.1 million, compared to $7.2 million last year. SoftWalk's net sales decreased 9.3% to $3.0 million, compared to $3.3 million in 2006. And Trotters sales increased 2.2% to $4.4 million, compared to $4.3 million for the same quarter a year ago.
Although Phoenix had defaulted on its financial covenants with its bank on March 31, the bank waived the covenant violations on May 14. But the company said it does not believe it will meet its current financial covenants during the remainder of 2007. It is having ongoing discussions with its bank about amending its future financial covenants to better align with management's expected financial performance for the remainder of fiscal 2007. There is no assurance of when, or if, future covenant waivers or amendments will be provided by the bank, it added.
Eddie Bauer Q1 net loss widens
Eddie Bauer Holdings (Nasdaq: EBHI) said its net loss widened in the first quarter due to hefty expenses that offset rising merchandise sales.
For the quarter ended March 31, it reported a loss of $44.8 million, or $1.47 per share, up from a loss of $35.6 million, or $1.19 per share in the prior year quarter. The company said its 2007 results included $16.4 million in one-time expenses, such as a $5 million merger termination fee and $1.4 million in legal fees related to a sale.
Revenue rose 10 percent to $214 million from $194.5 million in the first quarter of 2006. Total revenues for the quarter included net merchandise sales of $200.0 million, shipping revenues of $8.7 million, licensing royalty revenues of $3.5 million, royalty revenues from foreign joint ventures of $1.5 million, and other revenues of $0.3 million. Merchandise sales climbed 11 percent on a boost in revenues from retail and outlet stores, catalogs and websites.
Same-store sales grew 9.5 percent. Gross margin for the first quarter of 2007 was $58.6 million, an increase of $10.0 million from $48.6 million for the first quarter of 2006.
Crocs directors sells shares; signs Marvel licensing agreement
According to filings with the SEC, several directors at Crocs (Nasdaq: CROX) recently have been selling shares. Insiders file Form 4s with the SEC to report transactions in their companies' shares. Open market purchases and sales must be reported within two business days of the transaction.
Those selling shares include:
>> Michael E. Marks sold 104,259 shares of common stock on May 9-10 for $69.93 to $71.31 apiece.
>> Richard L. Sharp sold 100,000 shares of common stock on May 10 for $70.25 to $71.13 apiece.
>> CEO Ronald R. Snyder sold 248,166 shares of common stock on May 14-15 for $70.96 to $74.01 apiece.
>> Thomas J. Smach sold 14,202 shares of common stock on May 15 for $73.09 and $73.10 apiece.
>> Raymond D. Croghan sold 9,000 shares of common stock under a prearranged trading plan on May 14-15 for $71.45 to $73.15 apiece. The stock sale was conducted under a prearranged 10b5-1 trading plan which allows a company insider to set up a program in advance for such transactions and proceed with them even if he or she comes into possession of material nonpublic information.
In other company news: Crocs has signed a licensing agreement to create new lines of the company's plastic slip-on shoes and accessories featuring comic book characters published by Marvel Entertainment Inc. The Crocs shoes and snap-on Jibbitz charms will feature superhero characters including Captain America, The Fantastic Four, The Incredible Hulk, Spider-Man, and The X-Men.
Crocs said the new line of Jibbitz charms will be available at some U.S. and Canadian retailers this summer and the new line of Crocs footwear will be available later in the year.
Wellman declares quarterly dividend
Wellman's (NYSE: WLM) board of directors declared a quarterly dividend of $0.02 per share on the outstanding shares of the company's common stock payable on June 15, 2007, to stockholders of record as of the close of business on June 1, 2007.
Wellman manufactures and markets high-quality polyester products, including PermaClear brand PET packaging resins and Fortrel brand polyester fibers.
Liz Claiborne declares dividend
Liz Claiborne's (NYSE: LIZ) board of directors declared a regular quarterly dividend of 5.625 cents per share. The Prana parent said the dividend is payable June 15 to shareholders of record June 1.
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