Hallenstein Glasson confirms 41% drop in first-half profit

Net income fell to $5.48 million in the six months ended February 1, from $9.2 million a year earlier, the retailer said in a statement. The results confirm the company's guidance on February 4. Sales slipped 2.8% to $95.7 million.

In the first seven weeks of the winter season, sales have been 7% ahead of the same time a year earlier though revenue was achieved on a lower gross margin, pushing overall profitability below the year earlier, it said. The company said it was too early to predict second-half earnings.

"The retail environment has been exceptionally difficult, and the quest for the consumers' dollar has been at the expense of margin," the company said. "We have found it necessary to aggressively promote in order to maintain market share and ensure inventory levels are managed effectively."

Gross profit on sales slipped to 53.3% from 56% in the first half last year, the company said.

Hallenstein lowered its first-half dividend to 10 cents a share from 17 cents, payable April 17. The shares were unchanged today at $2.30 and have climbed 11% so far this year.

By Jonathan Underhill

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