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Acknowledging the tough retail landscape, the Tampa apparel company lowers its earnings forecast.
By MARK ALBRIGHT
© St. Petersburg Times, published September 29, 2001
TAMPA -- Shares in Tropical Sportswear Int'l Corp. took a hit Friday after the apparel manufacturer, like many of its competitors, said retailers are cutting back on orders for the coming Christmas holidays.
Citing a tougher retail environment since the Sept. 11 terrorist attacks, the Tampa-based maker of Savane, Farah and other brands of casual pants lowered its earnings forecast and said it did not see conditions improving markedly for two more quarters.
Tropical had plenty of company. Analysts Friday lowered their earnings estimates for eight other major brand-name apparel companies, ranging from Polo Ralph Lauren Corp. to Reebok, because retailers are trying to cancel orders for Christmas goods. Analysts did not see a turnaround in apparel sales until next spring.
Analysts were expecting Tropical to report earnings of 21 cents a share for the quarter that ends today. The company Friday cautioned them to expect 14 cents to 17 cents a share.
After plunging $4 a share in early morning trading, Tropical shares recovered somewhat to close at $16.95 Friday, down $1.60.
Normally it's hard for retailers to cut back much after Labor Day because most orders for Christmas goods are executed in the summer. But apparel companies that supply retailers year-round, like Tropical, are in constant price negotiation with retailers who try to get suppliers to share the burden of carrying too much inventory.
Since the threat of war and recession emerged three weeks ago to undermine consumer confidence, retailers have grown even more glum about the holidays.
To stimulate business, retailer Nordstrom, which has never had more than three major sale events a year since it started selling apparel 38 years ago, Friday began promoting a 10-day sale event that will be its fourth this year. Retail Forward Inc., the retailing unit of PricewaterhouseCoopers, on Wednesday cut its holiday forecast to a modest 1.5 percent sales gain excluding inflation. That's down from a 4.5 percent gain last Christmas.
- Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.