Ennis Reports Latest Financial Results

Rise Driven By Print Sales

Ennis (asi/52493) says its net sales soared 7.2% over a nine-month period that ended November 30. In a financial statement released last week, the Counselor Top 40 supplier reported sales increases from $410.3 million to $440 million.

The rise was driven by a $33.8 million year-over-year jump in print sales, which increased to $283.9 million. Print margins also inched up compared to the same nine-month period from a year earlier, ascending from 30.2% to 30.6%.

Nonetheless, the good news was tempered by a 2.6% dip in apparel sales, which fell to $156.1 million. Hurt by pricing pressures, the decline occurred despite the fact that, from a unit perspective, apparel sales were slightly ahead of the same period from the year prior. Lower selling prices and higher input costs caused apparel margins to slip from 21.7% to 14.8%. Overall, for the nine-month period, consolidated gross profit margin was $110.1 million (25%) – down from $110.2 million (26.9%) from the year prior.

“We continue to be pleased with the strong operational performance of our print group,” said Keith Walters, chairman, CEO and president of Ennis. “Our apparel group continues to be impacted by a challenging retail environment. While unit volume has increased for the second straight quarter, pricing is difficult as the market remains lethargic. Given this subdued environment, we believe discounting has been, and will continue to be, prevalent in the marketplace as a strategy to maintain market share. As such, the ability to raise prices to account for any increase in input costs has been, and we believe will remain, difficult.”

In the nearer term, Ennis revealed, apparel sales were stronger. For the company’s third quarter, which also ended November 30, apparel sales increased 5.1% to $49.3 million. Apparel margins for the quarter, however, aligned with the broader nine-month trend, dropping to 14.2% from the prior year’s third quarter performance of 21.7%.

In the print division, Ennis’ third-quarter sales were up nearly 9% to $97.7 million. Margins in the category tripped backward though, descending from 30.8% to 30.2%. In total, Ennis’ third quarter net sales increased 7.6% to $147 million.

Ennis, which includes Alstyle Apparel (asi/34817), ranks fifth on Counselor’s list of the Top 40 suppliers in the promotional products industry.