US: Warnaco Q3 profit soars, lowers FY forecast
Growing demand for its Calvin Klein and Chaps brands, coupled with strong international growth, has helped The Warnaco Group Inc to a surge in third quarter profits - but the apparel maker lowered its full-year outlook amid the global economic slowdown.
For the three months to 4 October, profit soared to $26.5m, or $0.56 per share, from $4.4m, or $0.10 per share, a year earlier. This year's figure includes $4.4m in restructuring charges.
Net revenues for the quarter rose 16% to $548.7m and gross margin increased 520 basis points to 47% of net revenues.
Operating income was $47.9m, or 9% of net revenues, versus $36.8m, or 8% of net revenues, in last year's quarter.
"Our third quarter results reflect the continuing success of our long-term strategies to grow our Calvin Klein businesses, increase our international presence and expand our direct-to-consumer initiative," said Joe Gromek, Warnaco's president and chief executive officer.
Sportswear Group revenues jumped 20% to $316.8m, driven by Calvin Klein Jeans and double digit gains in all regions.
In the Intimate Apparel Group, sales rose 14% to $200.3m, helped by the global launch of Calvin Klein Seductive Comfort and the re-launch of Calvin Klein Body products.
Swimwear Group revenues, however, were down 4% to $31.6m, which the company blamed on a shift in some Speedo shipments and marketing costs around the Olympic Games.
Gromek added: "We expect the slowdown in the global economy and the recent strengthening of the US dollar against several major currencies to have a negative near term impact on revenue growth and our bottom line."
In its full-year outlook, the company said it expects net revenues to rise 12-14% over prior-year levels - compared to earlier forecasts for a rise of 13-15%.
The negative impact from foreign currency exchange rates and an increase in the tax rate will lower earnings per share to $2.50 - $2.65, down from of the $2.80 - $2.90 predicted earlier.
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