Blair Cuts Costs, Posts Profit Increase
Profitability is the name of the game these days at apparel and home products marketer Blair Corp. (Amex: BL), as the Warren, PA-based marketer is bent on lowering operating costs and reducing unprofitable sales.
During the second quarter, for instance, cost of goods sold as a percentage of net sales totaled 45.5%, compared with 45.9% last year, reflecting efforts to lower liquidation costs.
Blair also negotiated lower merchandise costs from its vendors. It plans to expand its international trade department’s product development and sourcing as part of its strategic initiatives to further reduce the cost of goods and increase profitability.
The measures it has taken so far enabled Blair to grow its second-quarter net income 22%, to $6.1 million for the three months ended June 30. During the same period, net sales fell 5%, to $120.8 million from $127.0 million. About $5.7 million of that decline was due to the March closing of the Crossing Pointe women’s apparel catalog.
In other company news, on July 20, Blair repurchased 4.4 million shares of approximately 8.3 million shares outstanding at $42 per share, or $185 million. Blair also recently closed on a $200 million financing from PNC Financial Services Group, which will be used to finance, in part, the stock tender buyback in conjunction with $40 million of Blair’s cash reserves.
DM Unit Helps Aviall Boost Bottom Line
Aviall, a Dallas-based distributor of aircraft components, report a 14% climb in second-quarter profit on stronger sales in its commercial and general aviation units. Net income totaled $15.4 million, up from $13.5 million last year, which included a tax benefit of $0.08 per share. Net sales grew 3%, to $322.1 million.
Sales at its direct marketing unit, Aviall Services, also increased 3%, to $314.6. As for contribution, Aviall Services racked up a 40% increase, to $35.8 million.