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Russell Will Not Make Its FY Guidance
DECEMBER 22, 2005 --
Russell does not expect to achieve its previous FY05 sales and earnings guidance. Sales for '05 are now expected to be $1.425-$1.445 billion, and the company is not providing new earnings guidance at this time. Earlier, it guided toward sales in the $1.45-$1.46 billion range with earnings on a per share basis (excluding the COO position elimination, the impact of the hurricanes, and other potential special charges) in the $1.25 to $1.35 range.
Additionally, the company plans to take aggressive action in early '06 to improve ongoing earnings substantially and to make Russell a stronger, more competitive company. These plans are expected to be announced no later than the regular earnings conference call.
The revisions for '05 are primarily the result of lower than anticipated sales at retail and extra expenses to expedite orders associated with supply issues. Sales shortfalls are most notable in Russell Athletic, Mossy Oak and the Spalding Group. Results are also being impacted by a shift toward more promotional products.
According to Jack Ward, COB/CEO, "While we are extremely disappointed in our recent performance, we are encouraged by our improved prospects for '06. We are pleased with consumer acceptance of many new Russell products such as our technical running products from Brooks, performance apparel such as Dri-Power, more innovative sporting goods products, including Spalding's NeverFlat basketball, and the continued growth of the JERZEES brand in the Artwear channel."
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