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William L. McComb braced shareholders for a rough ride in his first quarter earnings call – and right he was.
For the second quarter in a row, Liz Claiborne Inc. saw its earnings nosedive 65 percent, led by losses in the “partnered brands” segment, which is full of subsidiaries the $4.99 billion vendor is looking to sell.
During the second quarter, ended June 30, net income fell to $13.6 million, or 13 cents a diluted share, from $39.4 million, or 38 cents, in the year-ago period. Sales increased a modest 0.5 percent to $1.13 billion from $1.125 billion in the same quarter last year.
For the first time, Claiborne broke out results for its new divisions: direct brands – Juicy Couture, Kate Spade, Lucky Brand and Mexx – and partnered brands – which include the 16 on review, including Ellen Tracy, Dana Buchman, Prana and Enyce. The direct brands division, on which the company is banking its future, made up 43.7 percent of sales for the quarter, up from 35 percent in the same period last year, before the company acquired Kate Spade.
The company also broke out domestic and international sales. A priority for the group, international sales made up 71.8 percent of sales for the quarter, slightly lower than the 72.9 percent registered in the same three months last year.
For details on Claiborne’s quest to sell its ailing divisions, click here.
For complete coverage, see tomorrow’s issue of WWD.