WestPoint Q2 Loss Increases as Sales Fall 21.5 Percent
August 9, 2013,
NEW YORK-With sales and margins on the decline, WestPoint Home's second-quarter net loss increased from $2 million last year to $3 million this year.
Net sales in the quarter, which ended on June 30, dropped 21.5 percent to $51 million. According to a 10-Q filing by Icahn Enterprises, WestPoint's parent company, sales were down because the company is continuing to exit "certain unprofitable programs and customers." Although cost of goods sold also decreased in the quarter, gross margin plummeted 400 basis points to 10 percent, the result of the sales decline and manufacturing process changes which involved higher charges for labor.
The filing said WestPoint Home "will continue to realign its manufacturing operations and streamline its merchandising, sales and customer-service divisions to improve its cost structure and better serve its customers. Given the uncertainty and volatility in the macroeconomic conditions, we cannot predict if (WestPoint's) financial performance will continue to improve."