NEW YORK — Stronger-than-expected sales in several divisions and a year-over-year improvement in its women’s jeans business paved the way for Nautica Enterprises Inc. to report fourth-quarter profits, reversing a year-ago loss.
The New York-based company, which markets apparel under its namesake brand as well as Earl Jean and John Varvatos, said for the three months ended March 1, income reached $20.7 million, or 60 cent a diluted share, against a year-ago loss of $8.4 million, or 25 cents. In 2003, the company incurred a quarterly aftertax charge of $1.6 million, or 5 cents, related to the transition of its Nautica business in Europe; while in last year’s quarter, it reported an aftertax charge of $9 million, or 27 cents, related to the closure of a distribution facility.
Excluding the charges, profits were $7.2 million, or 22 cents, compared with earnings of $591,000, or 2 cents.
Stronger-than-expected sales at Earl Jeans and within its men’s jeans, children’s and sleepwear divisions enabled Nautica to post a 14 percent increase in net sales to $178.5 million from $156.6 million. Shares dropped 31 cents, or 2.7 percent, to close at $11.06 in Nasdaq trading Thursday.
While Harvey Sanders, chief executive, said the women’s jeans division didn’t reach targeted profitability goals, he said the business to date is tracking close to its plan, with performance in line with that of its competitors. The fall line has additional fashion appeal, he said, and “the product has been rebalanced with a focus on knit tops and nondenim bottoms, and incorporating fabrics like satin and corduroy.”
For fiscal 2003, income climbed 19.9 percent to $20.7 million, or 60 cents a diluted share, versus income in the year-ago period of $17.3 million, or 50 cents. The company reported aftertax special charges in 2003 of $10.2 million, or 30 cents, related to aforementioned costs as well as the write-down of fixed assets for the Rockefeller Plaza store. Excluding the charges, income rose 17.6 percent to $30.9 million, or 90 cents, versus $26.2 million, or 76 cents. Overall sales inched up 0.2 percent to $693.7 million over $692.1 million.
Spelling out a conservative 2004 outlook, Nautica said it expects earnings per share to range between 95 cents and $1, excluding an aftertax special charge of $4.2 million, or 13 cents, related to the Nautica Europe transition, with about $3 million, or 9 cents, expected to be recognized in the first quarter and the balance falling in the second. For the first quarter, it said it is comfortable with First Call’s consensus estimate of 1 cent, excluding the charge.