Swank’s High Sales Checked by Taxes
NEW YORK – One hundred ten-year-old fashion accessory company Swank Inc. reported higher net sales in the second quarter of 2007 compared to the same time last year, but lower net income as a result of income tax provisions.
Net sales were up, $29.2 million in Q2 versus $26.4 million in the same quarter last year. Income before tax in the second quarter this year was $1.02 million, slightly more than Q2 2006’s $1 million. Net income was $571,000, much lower than last year’s $976,000 on account of a much higher tax provision.
“We recorded a minimal tax provision on our operating income before taxes during the first three quarters of fiscal 2006 reflecting the utilization of net operating loss carryforwards to offset then current tax liability.” The company said in a press release. “Those net operating loss carryforwards were fully utilized at December 31, 2006 and accordingly, beginning in fiscal 2007, we began recording a tax provision on our net income at a rate approximating statutory federal and state income tax rates.”
Swank CEO John Tulin focused on the promising increases. He said in a statement: “We are pleased to report increases in net sales and income before tax for both the quarter and six-month periods ended June 30, 2007. We experienced higher net sales during the quarter and year-to-date periods for each of our product categories. Our personal leather goods and belt lines enjoyed increases of 18% and 13%, respectively, for the first six months of the year compared to the same time last year. Our spring season in those categories benefited from higher net sales of our Nautica merchandise, which was launched last summer, as well as a new Concepts by Claiborne program at JC Penney and strength in a number of private label businesses which were either launched or expanded last fall or earlier this year. With a successful spring season behind us, we are now preparing for the launch of our new Tumi merchandise collection and are looking forward to the fall season.”
Swank’s products are distributed under the names Kenneth Cole, Tommy Hilfiger, Nautica, Geoffrey Beene, Claiborne, Guess, Tumi, and Swank.
