Cutter & Buck Bounds in Q2

by MR Magazine Staff

NEW YORK – Growth in all five of its business units helped Cutter & Buck nearly triple its second-quarter profits.

During the three months ended Oct. 31, the Seattle-based sportswear and golf apparel maker had net income of $2.5 million, or 23 cents a diluted share, versus prior-year profits of $891,000, or 8 cents. Excluding extraordinary items incorporated in the bottom line as part of generally accepted accounting principles, the quarterly profit would be $2.1 million, or 19 cents.

Sales grew 10.7% to $37.3 million from $33.7 million, including 5.9% growth in its largest business, corporate, to $14.9 million, and 11.3% growth in specialty retail, to $9.9 million. Golf was up 4.6% to $7.7 million, direct to consumer 117.1% to $2.5 million and international/licensing 10% to $887,000. Direct to consumer benefited from a consumer catalogue launched in September 2005.

Gross margin improved 240 basis points to 47% of sales.

“Looking forward to the second half of this fiscal year, we continue to anticipate year-over-year sales growth, however, not at the same pace as the first half of the year,” stated Ernie Johnson, chief executive officer. “Starting in the third quarter, the comparable period will include the positive impact from sales of our upgraded product offering and a full quarter of catalogue sales.

“We remain focused on providing high quality, innovative products to our customers that we believe will continue to provide profitable growth to the company.”

Net income for the six months was $4.5 million, or 42 cents a diluted share, 50.7% above the $3 million, or 26 cents, reported during the first half of 2005. At $72.3 million, sales advanced 13.9%.