SEATTLE – Cutter & Buck registered increases in sales and earnings during the fourth quarter, but year-end profits declined 26.3% despite the first year-over-year sales increase in five years.
In the three months ended April 30, net income advanced 1.5% to $2.9 million, or 27 cents a diluted share, from $2.8 million, or 25 cents, in fiscal 2005. Led by a 9.2% pickup in the corporate segment, its largest business, to $15.9 million, overall sales were up 5% to $36.6 million. Golf sales declined 2.6% to $11.2 million.
Specialty retail sales declined 11% to $5.1 million as earlier shipments to this segment shifted a significant portion of business into the third quarter, when revenues were up 43.3 percent.
Ernie Johnson, chief executive, said, “We continue to see positive results from our new products that began shipping in the third quarter and our continued focus on our strategic objectives.”
Kaia Akre, president, noted that every business segment except international licensing had an increase during the last six months of the fiscal year, and that company-wide sales increased 14.8% during this period as the market began to receive the enhanced CB Classic line. However, gross margin declined 210 basis points in the quarter, to 45.9% of sales, as the firm resorted to greater use of air freight to meet the demand for the new products.
For the full year, net income dropped 26.3% to $6.3 million, or 57 cents a diluted share, as sales rose 3.7% to $131.3 million. Johnson said the company expects “moderate sales growth” and improved earnings in fiscal 2007.