• Q2 earnings per share reach $0.05 
  • Net revenues up 15%
  • Q3 EPS forecast between $0.08 to $0.10

 

Kenneth Cole Productions has swung back into profit in its second quarter on the back of higher than anticipated comparable store sales and its streamlining programme.

The company said that earnings per fully-diluted share were $0.05 in the second quarter versus a loss of $0.18 in the year-ago period, stronger than the company's previous guidance of $0.00 to $0.03 per share. 

“The better than expected performance was the result of higher than anticipated comparable store sales, increased gross margins, effective inventory management and the ongoing, positive impact of the company's streamlining initiatives,” a statement said.

Net revenues in the second quarter grew 15% to $108m. Each of the Company's operating segments achieved double-digit revenue growth in the quarter.

Wholesale sales grew 12.8% to $52.1m. Excluding the impact of exited businesses, Wholesale sales grew 16%. Consumer Direct revenue for the second quarter increased by 16.2% to $44.8m. This improvement was driven by a comparable store sales increase of 8.4%, revenue associated with eight net new stores, and continued double-digit growth in e-commerce. Licensing revenue in the second quarter increased 21.1% to $11.1m.

Jill Granoff, CEO, said: "We are pleased to report strong performance in the second quarter, as well as our fourth consecutive quarter of positive operating profit. Our business has clearly turned the corner and is showing traction and positive momentum. Each segment delivered double digit growth, demonstrating that our brands remain strong and that our products are resonating with consumers. We also increased gross margin and achieved continued expense leverage, resulting in greater profitability."

For the six months, net revenues increased 10.2% to $217.5m. Operating income improved by $19.8m to $2.1m. As a result, diluted earnings per share grew by $0.79 to $0.15 versus the year-ago loss of ($0.64).

The company said it currently expects third quarter net revenues to grow between 10% and 12%, and earnings per diluted share to be in the range of $0.08 to $0.10 versus the year-ago level of $0.01 per share.