WOONSOCKET – Summer Infant Inc. reported a double-digit increase in its third-quarter profit compared with last year as retailers stocked up on products from its growing portfolio in advance of the Chirstmas shopping season.
Summer Infant posted a profit of $1.96 million, or 12 cents a share, in the three months ended Sept. 30, up from $1.61 million, or 11 cents a share, in the same period a year earlier. Revenue rose 15 percent to $40.98 million.
“We had continued strong performance in the third quarter across our business,” Jason Macari, Summer Infant’s chairman and CEO, said in a statement. “While we are encouraged by the recent pickup in sales trends, we continue to closely monitor consumer spending and point of sales data, as it is still a challenging environment.”
Excluding fees related to acquisitions, Summer Infant said earnings were 13 cents a share. The company boosted its gross margin to 36.4 percent, compared with 35 percent a year earlier, thanks to cost-cutting, lower commodity prices and new materials sourcing. Quarterly expenses rose 21 percent to $10.5 million year over year.
Summer Infant attributed its continued sales growth to an expanded lineup of products and an increase in the number of stores where its goods are sold. The company said sales were particularly strong in the nursery, bath and monitors categories.
“We continue to benefit from the major retailers consolidating vendors and focusing on manufacturers who can provide a broad product offering,” Macari said, adding that the company plans to continue entering new categories and adding new products.
Macari also offered an upbeat outlook for the rest of the year. “Looking ahead, we are very encouraged by ordering rates and [sale] trends so far in the fourth quarter despite the tough operating environment,” he said.
Macari said Summer Infant expects income and revenue to fall in the fourth quarter because most retailers purchase holiday items in the third quarter. The company is projecting total revenue of at least $170 million next year.
The company said it had about $2.7 million in cash on hand and $37.9 million in liabilities as of Sept. 30, with the majority of its debt due in June 2011.
Separately, an Illinois man filed a lawsuit last Friday against Summer Infant and retailer Toys R Us Inc. after purchasing Summer Infant’s Day and Night Video Monitor and finding it allowed neighbors with the same product to get the video and audio feed from his baby’s nursery, The Chicago Tribune reported.
