Gitano's 2nd qtr. earnings decline - apparel manufacturer

Discount Store News, Sept 4, 1989

Gitano's 2nd Qtr. Earnings Decline

NEW YORK -- The Gitano Group reported an 18.4 percent decline in net income to $4.9 million for the second quarter, ended June 30, 1989, compared to $6 million from the year-ago quarter.

Net sales increased by 17 percent to $132 million from $112.8 million recorded a year ago. Earnings-per-share for the quarter were $.35 based on 13.9 million shares outstanding, compared with $.51 per share based on 11.8 million shares outstanding in 1988.

Haim Dabah, president of Gitano, called the second quarter results "within plan," adding that "expenditures were incurred for the company's newest concepts, Gloria Vanderbilt and the `shop-within-a-store,' which will benefit future earnings."

Dabah also noted that second quarter results were affected by moderating factory lossess as anticipated. The factories are expected to return to modest profitability by the fourth quarter, Dabah said.

For the first six months of 1989, Gitano reported an increase of 5.1 percent in net income to $16.7 million, from $15.9 million in 1988. Net sales increased 14 percent to $290.8 million from $255 a year ago. Earnings-per-share totaled $1.20 for the first six months based on 13.9 million shares outstanding, compared with $1.34 last year, based on 11.8 million shares outstanding.

"In the second half, we are anticipating growing contributions to revenues and earnings from our newer divisions--men's wear, children's wear, intimate apparel and bodywear," said Dabah, adding that "we are confident that our full-year sales and earnings will meet plan and be in excess of our 1988 numbers."