Hampshire Group Reports Disappointing Q3 Results

Hampshire Group Reports Disappointing Q3 Results

By: Dylan Sikes - AllPennyStocks.com News

Thursday, March 24, 2016

U.S. equities have edged lower today as investors are cautious ahead of the long weekend. Markets in the U.S. will be closed on Friday, due to the Easter Holiday. It has been an eventful past few days for U.S. markets as investors have been assessing the Federal Reserve’s monetary policy statement released last week. The Fed was surprisingly dovish last week as it predicted only two further rate hikes for this year instead of four. However, St. Louis Fed President James Bullard this week said that a rate hike could come as early as April. The conflicting signal from the Fed has led to volatility and not surprisingly market participants are being cautious right now.


Hampshire Group Limited (OTCPK:HAMP) is one the stocks in the micro cap space that is in focus. Based in Anderson, South Carolina, Hampshire Group is engaged in the apparel business. The company provides fashion apparel across a range of product categories, channels of distribution and price points. HAMP shares are trading on nearly four times their daily average volume.

HAMP is seeing significant activity after the company reported its financial results for the third quarter of its fiscal 2015. Sales for the quarter were $18.6 million, compared to $20.8 million reported in the same period in the previous year. The company’s gross profit margin for the quarter was 21%, compared to 28.2% reported in the same period in the previous fiscal year.

HAMP’s adjusted EBITDA was negative $0.9 million, compared to adjusted EBITDA of $1.3 million reported for the same period in the previous fiscal year. HAMP’s loss from continuing operations was $1.4 million, or $0.16 per diluted share, compared to income from continuing operations of $0.7 million, or $0.08 per diluted share reported in the same period in the previous year.

HAMP said that its sales declined in the third quarter on a year-over-year basis due to decrease in volume and lower average selling prices resulting from a change in sales mix. However, The James Campbell brand, which the company acquired in February 2014, contributed $1.3 million in sales compared to $1 million in sales reported in the third quarter of fiscal 2014. This highlights the brand’s successful integration into HAMP’s operations.

HAMP ended the third quarter of fiscal 2015 with $1.4 million in cash and cash equivalents, down from $1.8 million reported at the end of 2014. HAMP had borrowings of $3 million on its term loan and $18.6 million on its revolving credit facility.

With revenues and profits heading in the wrong direction, it will take several more quarters of re-organizations to get investors excited about this Company again. In the meantime, shares will likely languish as the Company struggles to grow again.

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