R.G. Barry Corp., the parent of Dearfoams, saw both sales and income decline in its first quarter of its current financial year. The company's executives attributed the disappointing quarter mainly to timing issues with holiday shipments, the challenging retail climate and the continued effects of moving away from lower-margin products. Sales for the quarter, which ended on Sept. 30, were $41.9 million, 11.3 percent down from a year ago. Net income fell by 22.4 percent against the same quarter a year ago to $4.8 million.
The company is still weighing an unsolicited acquisition offer from Mill Road Capital of Greenwich, Connecticut, which is offering to pay $20 per share.
R.G. Barry's sales of accessories rose during the quarter by 1.4 percent versus a year ago to $9 million. The firm expanded in 2011 to include accessories from Foot Petals and Baggallini, which have been a key source of extra income. The decline in quarterly consolidated sales was driven mainly by the Footwear segment, down 14.2 percent to $32.8 million from the comparable period last year.
The gross margin rose by 2.2 percentage points to 46.5 percent, however, resulting from the company's continuing shift to a more profitable mix of products and channels. Selling, general and administrative expenses increased by 8.0 percent to $11.9 million versus the comparable quarter a year ago, primarily reflecting increased investment spending aligned with long-term growth initiatives not in place one year ago.
Given the current environment, the company expects consolidated revenues for the full year to be down slightly compared with fiscal 2013, although a better forecast will be possible in February, when reporting on the second quarter and the first half.