Springs Tumbles to $93.5 Million Net Loss in Q2
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MONTES CLAROS, Brazil-A steep decline in sales and variations in currency exchange rates brought Springs Global a net loss of $93.5 million (using average currency exchange rates for the Brazilian real to the U.S. dollar) in the second quarter ending on June 30.
The textiles company's net sales dived 17 percent in the quarter (26 percent in reals) to $282.3 million. Springs reported significant declines in all of its textiles segments, including a 41.9 percent drop in bath sales, a 29.2 percent decline in utility bedding sales and a fashion bedding sales decrease of 8.5 percent (all in dollars). The company said unit volume fell off by 39.1 percent, which offset an average price increase of 21.7 percent.
Currency exchange variations hurt the bottom line to the extent of $17.9 million, compared to a benefit of $7.6 million in currency exchange variations in last year's second quarter.
Selling, general and administrative expenses rose 2.7 percent in dollars and increased by 348 basis points as a percentage of sales, to 18.5 percent. Thanks to a significant reduction in cost of goods sold, gross margin increased by 334 basis points to 18.6 percent.