McRae Industries, manufacturer of military combat, western, and work boots reported reduced net sales of $ 14.3 million in Q3 FY 20 compared to the sales of $18.6 million during the previous year. The company also recorded and a net loss of $ 0.5 million in Q3.
Gross profit for Q3 FY20 decreased to $2.7 million (Q3 FY19: $4.2 million) due to a decline in sales, as well as the production inefficiencies created by the coronavirus and increased healthcare cost, as the company stated in a press release. Selling, general and administrative expenses fell from $3.8 million in Q3 FY19 to $3.4 million in the reported quarter. Operating loss for the quarter was $0.7 million compared to an operating profit of $0.4 million in Q3 FY19.
The company further stated that the sales related to its western/lifestyle boot products were $6.5 million ($9.6 million) for Q3 FY20. This was reportedly driven by a decline across all brands due to the coronavirus pandemic, which especially had an impact on McRae’s popular-priced western boots sales. Revenues from the company’s work boot products dropped to $7.6 million ($8.8 million) primarily due to decreased sales in military boots and the John Deere brand, offset by an increase in our Dan Post brand.
In the month of April, McRae Footwear reported production in some departments down by 40 percent from the previous month due to absenteeism related to Covid-19. The company expects the fourth quarter of fiscal 2020 to also be challenging for McRae Footwear.
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