The Warnaco Group today reported income from continuing operations of US$13.7m for the second quarter ended 30 June, compared to $5.5m in the prior year quarter, with Calvin Klein sales on the gallop.

Net revenues at the company rose 4.4% to $465.1m compared to $445.6m in the prior year period, the fashion apparel group said.

Operating income rose 32.7% to $22.2m, or 4.8% of net revenues, from $16.7m, or 3.8% of net revenues, in the second quarter of fiscal 2006.

"The results reported today reflect continued positive momentum in our business," said Joe Gromek, Warnaco's president and CEO. "Our worldwide Calvin Klein revenues were up more than 15% over the prior year, driving the improved results at both our sportswear and intimate apparel groups and more than offsetting the swimwear group's declines. International revenues for the quarter represented 42% of our total business and our direct-to-consumer revenues were 17%, and were the key drivers of the 320 basis point increase in gross margin along with improvements in Chaps. We are pleased with these results, which led to a 33% improvement in operating income and a significant improvement in diluted earnings per share."

Revenues for its sportswear group increased 15.1% to $192.9m, with the Calvin Klein jeans businesses exceeding the company's expectations at retail and wholesale, and the Chaps business reversing a $4.6m operating loss in the prior year quarter with operating profit of $2.8m.

For the acquired Calvin Klein jeans businesses, net revenues grew 23.2% and operating profit was $3.1m, or 3.9% of net revenues, up from a loss in last year's second quarter.

The company's intimate apparel group's revenues rose 6.1% to $160.5m and operating income increased to $21.8m, or 13.6% of intimate apparel group net revenues. Global growth in the company's Calvin Klein Underwear business and continued momentum in Warner's drove the gains in both revenues and operating profit, offsetting declines at the company's other domestic intimate apparel brands and Lejaby.

Swimwear group revenues, however, were at $111.8m, a decline of 11.8% from the prior year quarter, with an operating loss of $5.5m. Speedo's core competitive and accessories businesses continued to perform well. However, softness in the mid-tier and mass channels negatively affected revenues and profitability, the company said.

In its fiscal 2007 outlook, Warnaco said it expects net revenues to grow 7%-9% over fiscal 2006 levels and diluted earnings per share to be in the range of $1.90-$2.00.

Gromek added: "We remain focused on developing our global platform and growing our business worldwide. We believe this approach will continue to differentiate Warnaco within the apparel industry and provide increased value for all Warnaco stakeholders. As we enter the second half of the year, we continue to see organic revenue opportunities and believe fiscal 2007 is shaping up to be a year of substantial growth for our company."

Warnaco completed the acquisition of Phillips-Van Heusen's Calvin Klein subsidiary businesses in Europe and Asia back in February 2006. Phillips-Van Heusen owns and markets the Calvin Klein brand worldwide, together with marketing a variety of goods under its own brands.