McRAE INDUSTRIES, INC. REPORTS EARNINGS FOR THE SECOND QUARTER & FIRST SIX MONTHS OF FISCAL 2023.

MOUNT GILEAD, N.C: McRae Industries, Inc. (Pink Sheets: MCRAA and MCRAB) reported consolidated net revenues for the second quarter of fiscal 2023 of $30,769,000 as compared to $31,426,000 for the second quarter of fiscal 2022. Net earnings for the second quarter of fiscal 2023 amounted to $1,729,000, or $0.76 per diluted Class A common share as compared to $2,536,000, or $1.12 per diluted Class A common share, for the second quarter of fiscal 2022.

Consolidated net revenues for the first six months of fiscal 2023 totaled $64,552,000 as compared to $59,014,000 for the first six months of fiscal 2022. Net earnings for the first six months of fiscal 2023 amounted to $4,586,000, or $2.02 per diluted Class A common share, as compared to net earnings of $4,758,000, or $2.11 per diluted Class A common share, for the first six months of fiscal 2022.

SECOND QUARTER FISCAL 2023 COMPARED TO SECOND QUARTER FISCAL 2022

Consolidated net revenues totaled $30.8 million for the second quarter of fiscal 2023 as compared to $31.4 million for the second quarter of fiscal 2022. Sales related to our western/lifestyle boot products for the second quarter of fiscal 2023 totaled $22.8 million as compared to $23.5 million for the second quarter of fiscal 2022. This decrease in net revenues was spread across most of our product lines, as the demand for western boots was unprecedented in the prior year and many retailers were in an over inventoried position for the quarter. Revenues from our work boot products increased from $7.0 million for the second quarter of fiscal 2022 to $8.2 million for the second quarter of fiscal 2023. This was primarily a result of increased military boot sales.

Consolidated gross profit for the second quarter of fiscal 2023 amounted to approximately $8.0 million as compared to $9.2 million for the second quarter of fiscal 2022. Gross profit, as a percentage of net revenues, was down from 29.1% for the second quarter of fiscal 2022 to 25.9% for the second quarter of fiscal 2023. This is primarily because of decreased margins on military boot sales driven by increased labor cost and rising material cost associated with fixed price military boot contracts. We continue to have difficult hiring and training qualified employees to work in our manufacturing facility.

Consolidated selling, general and administrative expenses totaled approximately $6.1 million for the second quarter of fiscal 2023 as compared to $5.7 million for the second quarter...

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