Hartmarx Corporation reported operating results for its first quarter ended February 28, 2007. Sales were $120.0 million in 2007 compared to $144.2 million in 2006. The net loss was $3.4 million or $.09 per diluted share in 2007 compared to net earnings of $2.6 million or $.07 per diluted share in 2006.
Homi B. Patel, chairman and chief executive officer of Hartmarx Corporation, commented, "Our first quarter results reflect the previously announced negative outlook for the first portion of fiscal 2007, resulting from conditions affecting the men's tailored clothing product lines. Despite the poor first quarter operating results, we continue to expect a significant earnings recovery for the full year of 2007 compared to 2006."
"We are maintaining our previously announced full year guidance of revenues in the $585-$600 million range with diluted earnings per share in the range of $.50-$.56. We are starting to realize the benefits from the actions we initiated last year and we expect to return to profitability in the second quarter with significant favorable comparisons to the prior year occurring in the second half of the year."
Mr. Patel continued, "As previously announced, approximately $13 million of Spring advance tailored clothing orders for a major customer have been shifted from the first quarter last year to the second quarter this year. Also, last year's first quarter included $3.9 million of revenues and related earnings applicable to two moderate priced tailored clothing licenses that were not renewed for 2007."
"First quarter operating results this period were further impacted adversely by retailer chargebacks and allowances and disposition of certain inventories from discontinued product lines, as well as from the residual effects of the actions initiated last year to reduce our investment in the moderate priced tailored clothing lines marketed principally to the mainstream department store channel."
"This included the unfavorable manufacturing overhead absorption emanating from reduced production schedules related to the final winddown of a coat sewing facility closed during the first quarter. Moderate priced brands marketed principally to the mainstream department store channel represented approximately 13% of first quarter sales this year compared to 18% last year."
