Springs Loss Widens in Third Quarter
November 17, 2011,
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MONTES CLAROS, Brazil-Declining sales in all key product categories increased Springs' Global's third-quarter net loss to $40 million from a net loss of $14.9 million in the third quarter of last year.
Net sales for the company as a whole in the quarter, which ended on Sept. 30, totaled $278.9 million (using the average currency conversion rate of the Brazilian real to the U.S. dollar for the quarter), down 14 percent from last year. All three textiles categories experienced double-digit sales drops worldwide. Fashion bedding sales were down 17.3 percent, bath-products sales fell 34.1 percent and utility bedding sales were off 11.1 percent. Reduced unit volumes and the appreciation of the Brazilian real in the quarter combined to produce these sales decreases, Springs said in a statement.
Although gross-margin dollars were down 16.5 percent, Springs' gross margin percentage actually increased 150 basis points in the quarter to 18.3 percent, the result of its passing along price increases to customers. Selling expenses fell 2.8 percent, and general and administrative expenses dropped 4.5 percent. Both items reflected the appreciation of the Brazilian currency along with the company's cost-cutting efforts.