Nautica Enterprises Inc. (New York) has reported a 17 percent increase in net earnings for its second quarter ending Aug. 31, 2002. Net sales were down 8.5 percent from a year earlier.
“Driving [our] performance was an improvement in gross margin,” said president and ceo Harvey Sanders. “This was largely attributable to better sourcing and product placement in our Nautica Men's Jeans, Nautica Furnishings and Nautica Children's businesses. Furthermore, inventory management improved across all businesses, especially in our Nautica Retail outlet division, where gross margin improved 480 basis points.”
For the six-month period ending August 31, net earnings before special charges were down 18 percent and net sales were down nearly 8 percent. (The special charge was $2.1 million the company incurred in the first quarter of fiscal 2003 related to employee termination costs associated with the closing of the Rockland, Maine, distribution center.)
The company reported that its Rockefeller Plaza flagship store in New York continued to perform below expectations. “The Rockefeller Plaza store serves as an effective testing ground for new products,” Sanders said. “In the current difficult retail environment, however, it has continued to perform below our expectations. We are in the process of evaluating a number of options regarding our longer-term strategy for the store.”
For the balance of the year, Nautica says it has adopted “a more cautious outlook primarily due to the current sluggishness of the retail environment.” It said it expects to achieve a mid-single digit increase in top line for the second half, which equates to a slight decrease in top line for the full year.