US: Liz Claiborne slashes FY forecast on sales slump
Liz Claiborne today (14 February) slashed its full year earnings forecast on poor sales, higher-than-expected markdowns, and liquidation of excess inventories.
The company said it expects to report a loss per share of US$0.25 to $0.35 for full-year 2007, compared with earnings per share (EPS) of $2.46 for 2006.
Adjusted diluted EPS for the year 2007 are currently estimated to be in the range of $1.25 - $1.35 compared to previous adjusted diluted EPS guidance of $1.70 - $1.80, the company said. Adjusted diluted EPS were $2.99 for the year 2006.
Net sales for the year 2007 fell by 1.4% to around $4.581bn, the company said, reflecting weak results in its Partnered Brands segment.
The company is currently nearing the end of a strategic review of the brands in this segment.
For the fourth quarter of 2007, the company expects to report a loss per share of $0.90 to $1.00, compared to earnings per share of $0.71 for the same period in 2006.
The losses reflect costs of streamlining its operations in 2007, non-cash charges associated with the impairment of its Ellen Tracy trademark, and expenses associated with the elimination of certain cosmetics brands.
The company has not fully completed its analysis of fiscal 2007, as it includes the potential impact of its Ellen Tracy disposition announced today.
Liz Claiborne is postponing its earnings conference call previously scheduled for 27 February to no later than 13 March, it said.
William L McComb, chief executive officer of Liz Claiborne, said: "While 2007 marked a very difficult period, we see the fundamentals in this company heading in the right direction.
"We are steadfast in our commitment to rebase our costs, to invest in design and retail capabilities, and to complete our strategic review by the end of the first quarter."
He added that the Direct Brands business, which includes Juicy Couture, Kate Spade, Lucky Brand, and Mexx is a "positive story."
The company expects fiscal 2008 EPS in the range of $1.50 to $1.70, excluding the results of brands for which it has completed a strategic review, including Tapemeasure, Intuitions, JH Collectibles, Emma James, First Issue, C&C, Laundry by Design and Sigrid Olsen.
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