WOONSOCKET – Summer Infant Inc. late Tuesday said its profit dropped by more than half in the first quarter as retailers cut back their inventories and sales of lower-margin products increased.
Summer Infant (Nasdaq: SUMR, SUMRW) posted net income of $403,000, or 3 cents a share, in the quarter ended March 31, down from $1 million, or 7 cents a share, in the same period last year. Quarterly sales increased 22.6 percent to $34.85 million from $28.43 million a year ago.
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However, the Woonsocket-based maker of infant and toddler products said the results for the first quarter of last year do not include its acquisition early last spring of Basic Comfort and Kiddopotamus. The company said sales were flat when it included revenue from those two product lines for comparison purposes.
“We are pleased with our performance in the first quarter in this tough operating environment,” Jason Macari, Summer Infant’s chairman and CEO, said in a statement. He said January shipments had been sharply lower as retailers cut their inventory levels, but added that “shipments in February and March were solid.”
“Based on sales trends so far in the second quarter, retailer ordering rates appear to have stabilized,” Macari said. He also said the company’s newest products were meeting with some success so far.
Summer Infant’s gross margin in the first quarter fell to 33.5 percent from 35 percent a year ago, due to higher sales of closeout items and lower-margin products.
Macari said Summer Infant has taken a number of steps in recent months to reduce its costs, including laying off 10 percent of its staff and initiating a sale-leaseback of its corporate headquarters. The company has also eliminated underperforming products.
Summer Infant Inc. (Nasdaq: SUMR, SUMRW) designs and makes audio-video monitors, safety gates, bed rails, infant thermometers, booster and potty seats and other products for toddler and infants. Additional information is available at SummerInfant.com
