US: Warnaco cuts FY guidance as Q2 profit slumps
- Q2 profit down 79% to US$9.6m
- Revenues down 5% to $563.9m
- Cuts full-year earnings and revenue projections
Apparel group Warnaco has cut its full-year projections for revenues and earnings after second quarter profit slumped 79%, hit by a $12m charge linked to its 2008 sale of lingerie brand Lejaby.
The three-month period to 30 June saw a strong performance from swimwear brand Speedo linked to its Olympic activity, which helped swimwear revenues to increase 10%.
However, this was more than offset by declines in sportswear and intimate apparel, which the company blamed on challenging market conditions, particularly in the US and Europe.
Gross margins were also down, thanks to product cost inflation, increased customer allowances and the effects of currency fluctuations.
Warnaco president and CEO Helen McCluskey said the results were “in line” with expectations, adding: “As expected, a positive performance in Asia and Latin America during the quarter offset softness in Europe and the US.”
Highlighting the performance of Speedo, she said: “We are making progress in reshaping our organisation to reflect the consumer-centric vision I outlined earlier in the year.”
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