LAS VEGAS – Tandy Brands Accessories continued to generate higher profits on lower sales during its second quarter.
In the three months ended Dec. 31, the Arlington, Tex.-based producer’s net income grew 67.3% to $3.4 million, or 50 cents a diluted share, from $2 million, or 30 cents, in the prior-year period.
Sales for the quarter retreated 12.9% to $64.3 million from $73.9 million. The firm’s decision to exit several lower-margin women’s product categories cut into sales but helped to lift gross margins to 37.6% of sales from 33.8% in last year’s period.
J.S.B. Jenkins, president and chief executive officer, commented, “As we enter into the second half of our 2007 fiscal year, we continue to identify opportunities to increase our market penetration and introduce new accessories products to our large, diversified base of retail customers and improve our financial performance. We have developed new, exciting fashion styles in our men’s and women’s product categories and continue to look for additional licenses in our core product areas to broaden our overall assortment.”
He added that the firm continues to explore the gift category for spring and summer selling to lessen the impact of seasonality on the firm’s business.
For the six months, net income grew 78% to $6.2 million, or 91 cents a diluted share, from $3.5 million, or 52 cents, in the first half of 2005. Sales declined 9.8% to $121.5 million from $134.8 million.
The company said that 2007 revenues are expected to come in between $177 million and $182 million with earnings per diluted share between 67 and 72 cents.