WestPoint Home Posts $14 Million Net Loss in Q3
Posted on November 24, 2010 by
NEW YORK--WestPoint Home recorded a net loss of $14 million in its fiscal third quarter, compared to the $10 million net loss in the third quarter of last year.
The loss occurred in spite of a 23 percent increase in net sales for the quarter, which were $116 million. It marked the second consecutive quarterly sales gain for WestPoint, which had been experiencing a long string of quarterly declines in sales.
However, WestPoint's gross margin fell 300 basis points to 5 percent, due to a 28 percent jump in cost of goods sold stemming from the increased sales volume and higher costs of raw materials. Selling, general and administrative expenses rose 6 percent on a dollar basis but dropped 270 basis points as a percentage of sales to 16.4 percent.
In a filing with the U.S. Securities and Exchange Commission by Icahn Enterprises, WestPoint's parent, the company cautioned that its business "is significantly influenced by the overall economic environment, including consumer spending, at the retail level, for home-textile products. Many of the larger retailers are customers of [WestPoint]. Based on prevailing difficult economic conditions, it will likely be challenging for these same retailers during the remainder of fiscal 2010."