Although sales and operating profit registered a decline from the prior-year period, Wetherby, England-based Premier Farnell plc said today its first fiscal quarter was in line with company expectations.
For the quarter ended May 2, sales for the catalog giant were $302.6 million, up from $313.6 million a year ago. Operating profit on those sales was $41.3 million, a decline from $63.6 million the prior year. After-tax profit was $25 million, compared with $38.5 million in the prior-year period.
"These results are in line with our plans and external expectations and continue the steadier performance of recent months," said John Hirst, chief executive of Premier Farnell's Catalog Group. "We expect market conditions to remain difficult throughout the year. We now have a sound strategy to drive the [g]roup forward to sales and profit growth through investment and the strengthening of our management."
The company recently named Mike Ruprich to head its Newark Electronics catalog, the group serving the North American market.
The Catalog Group, which accounts for more than 70% of Premier Farnell's total revenue, reported a sales decline in local currency of 5.2% for the period.
Lower operating profit was attributed to a slowdown in the group's North American and U.K. catalog businesses, which the company said stabilized in the fourth quarter. Other factors contributing to the drop in earnings included a softening of Newark's gross profit margins, and increased investment by parent Premier Farnell into the Catalog Group.
Earlier this year, the company announced a three-year plan slated to bring the catalog house back to profitability. The plan involves investments to upgrade systems and logistics, as well as a sharing of resources between the two catalog businesses, Newark and Farnell.