Kellwood Q1 profit drops 20%

US: Kellwood Q1 profit drops 20%, names new CFO

By just-style.com | 11 June 2007

Apparel maker Kellwood Company has posted a 19.6% drop in first quarter profit on lower sales and higher costs relating to the acquisition of the Vince and Hollywould brands.

In a separate announcement, Kellwood said Gregory (Greg) W Kleffner has been elected chief financial officer (CFO). Kleffner has served as senior vice president finance and controller since June 2006.

For the three months to 5 May, total net earnings were $7.4m, or $0.28 per diluted share, down from $9.2m, or $0.36 per diluted share.

Quarterly net sales slipped 1.9% to $484.4m from $493.8m in the same period last year. Women's Sportswear sales fell 3% to $272.5m, and Men's Sportswear sales decreased 4% to $128.4m, the company said in a statement, adding that other Soft Goods sales - particularly children's and specialty recreation products - rose 6% to $83.6m.

"Gerber Childrenswear and Baby Phat continued to excel during the first quarter," said Robert C Skinner Jr, chairman, president and chief executive officer.

"In addition, Sag Harbor women's sportswear delivered improved sell through results at retail. Our juniors branded sportswear and dress businesses, consisting of My Michelle and XOXO, also performed well.

"While we recognise that we can still do better, Calvin Klein women's better sportswear showed improvement over the prior year in retail sell through."

He said the company also expects to see better autumn results from the launch of O Oscar, an Oscar de la Renta Company, exclusively at Macy's.

This was offset by the impact of lower sales volumes of certain private brands and Halmode dresses and suits along with a softer than expected women's bottoms business.

For the second quarter of fiscal 2007, the company expects net earnings of $9.5m to $10.0m, or $0.37 to $0.39 per diluted share, compared with $9.5m, or $0.37 per share, in the second quarter of 2006.

For fiscal 2007, net earnings are forecast to range from $47m to $49m versus $42.5m last year, with earnings per share of $1.80 to $1.89. Actual earnings per share were $1.64 in fiscal 2006.

Sectors: Apparel, Finance, Manufacturing

Companies: Kellwood, Baby Phat, Calvin Klein, Oscar de la Renta, Macy’s