Ennis (NYSE:EBF) ticked higher by more than 11% Monday after reporting stronger second-quarter earnings than anticipated, driven by higher apparel sales, only partially offset by a drop in print revenue.
The maker of business forms and apparel posted net earnings of $12.13 million, or 47 cents a share, compared with $9.55 million, or 37 cents a share, in the same quarter last year.
Revenue for the Midlothian, Texas-based company was $143 million, up from $137.8 million a year ago, beating the Street’s view of $132.85 million, according to a Thomson Reuters poll.
For the first-half, revenues were up 5.7% to $283.8 million, from $268.6 million in the earlier-year period.
Earnings were boosted by higher apparel sales, which improved 15.6%, partially offset by a near $5 million decline in print sales.
Ennis CEO Keith Walters said the company is “pleased” with the results, noting both sectors continued to increase or hold their margins compared with the earlier period, despite the challenges of high cotton and paper prices.
“We continue to be concerned with current cotton pricing, which continues to be extremely high,” he said. “Our ability to continue to manage these costs increases continues to be unknown and is dependent upon the economic recovery, outside market factors and the actions of our competitors.”
The company said the construction of its new apparel manufacturing facility in Agua Prieta, Mexico is progressing and should be open for operation in the next few quarters.
“While much has been accomplished so far this fiscal year, many challenges remain for fiscal year 2011,” Walters said. “As always, we will continue to remain vigilant to the task at hand.”