Second quarter sales decline for Saucony
Saucony, Inc. has reported a 19 per cent decline in net sales for the second quarter of this year, amounting to $35.5 million compared to $44.0 million in the second quarter of 2000. Domestic net sales decreased 25 per cent to $29.1 million, compared to $38.9 million in the second quarter of 2000, however international net sales increased 24 per cent to $6.4 million, compared to $5.1 million in the second quarter of 2000. Saucony brand footwear accounted for approximately 87 per cent of total second quarter 2001 net sales, with a combination of Hind apparel, factory outlet stores and Authentics net sales accounting for the balance.
For the first six months of 2001, net sales decreased 13 per cent to $79.2 million, compared to $90.8 million in the same six-month period in the previous year. Domestic net sales fell 18 per cent to $65.3 million, compared to $79.7 million in the previous year, with international net sales increasing 25 per cent to $13.9 million, compared to $11.1 million in first six months of 2000. Saucony brand footwear accounted for approximately 88 per cent of total sales during the period, with the balance comprising Hind apparel, factory outlet stores and Authentics.
The company’s gross margin in the second quarter of 2001 decreased to 33.4 per cent compared to 38.2 per cent in the second quarter of the previous year. The drop was attributed primarily to lower domestic sales levels of first quality footwear products at full margin and the resulting change in the domestic sales mix. According to the company, other factors contributing to the margin decrease were a rise in sales of special make-up footwear which carries lower margins, manufacturing inefficiencies, increased stock reserves, domestic pricing pressures, changes in the geographic mix of sales and the negative impact of the stronger U.S. dollar on European margins. For the first six months of this year, the gross margin was down by 32.2 per cent compared to 37.7 per cent in the corresponding period in 2000.
Net income for the second quarter was $176,000 compared to $1.4 million in the second quarter of 2000. For the six months to July, net income was $1.5 million compared to $4.6 million for the same period in 2000.
For the third quarter of 2001, the company is expecting fully diluted earnings per share to range from $0.05 to $0.09, and from $0.18 to $0.23 for the year in total. It forecasts that net sales for the year will range from $127 million to $129 million, and gross margins from 32.5 per cent to 33 per cent.
