They had great margins due to higher end slippers and despite higher product costs, a disappointing sales decrease, they managed G&A very well despite adding new lines, and NO DEBT verses about 22M last year. On the whole, I'm inpressed, but I don't think the market will be. At some point we need top line growth, and may have to wait until new products and channels kick in.
I am eating crow this morning. My earlier concerns of higher SGA and inventories simply were unfounded. The DFZ team did a great job holding expenses and inventories in line despite the many new initiatives.
Still, I am not adding anymore to the portfolio. National weather indicates that it will approach 70 degrees around much of the country this week, damn it. Also, I bought heavily when it took the dip under 10 a few months back.
I'm going to listen to the conference call later. Hopefully, our christmas quarter is blockbuster. I didn't expect too much out of this one with the warm weather and cooling economy. Unfortunately, it's going to get warm again this week.
Don't forget that quarterly results are changing/shifting to some degree due to this new initiative with a major customer, and that may have had an effect as well.
All in all, a good report, though I agree with you that the market will probably not like it. After all, the Q4 report was much better, and I thought the stock would go up or stay even, and it dropped 10%.
Also, I should note here that I attended the annual meeting last Thursday. The footwear styles I saw for upcoming seasons are more exciting than any statement or number that can be put in a press release.