Warnaco Group Inc.'s Calvin Klein business dominated a double-digit sales increase that helped the company return to profitability in the fourth quarter.
The firm said late Monday that, for the three months ended Jan. 2, net income was $11 million, or 23 cents a diluted share, against a loss of $16.3 million, or 35 cents, in the year-ago quarter. Excluding discontinued operations and items such as restructuring charges and pension expense, adjusted earnings per share more than doubled to 64 cents, 7 cents above analysts’ expectations, from 28 cents a year ago.
Revenues rose 13.5 percent to $505.4 million from $445.3 million. By category, sportswear revenues rose 17 percent to $275.6 million, with a 22 percent increase in Calvin Klein volume offset by a 4 percent decline at Chaps. Retail revenues in the sportswear group rose 31 percent in the quarter. Revenues in the intimate apparel group increased 10 percent to $179.1 million, driven in part by double-digit growth in the core intimates business and high-single-digit growth in Calvin Klein intimates. The swimwear group’s revenues gained 10 percent to $50.8 million, helped by increases in both Speedo and Calvin Klein Swim.
For the year, earnings more than doubled to $96 million, or $2.05 a diluted share, from $47.3 million, or $1 a share, in 2008. Adjusted EPS, excluding special items and discontinued operations, was $2.82, up from $2.64 in 2008. Revenues fell 2.1 percent to $2.02 billion from $2.06 billion.
On a conference call following the after-market release of results, Joe Gromek, president and chief executive officer, said, “The ongoing success of our long-term strategic initiatives, namely growth of our Calvin Klein businesses, international expansion and continued development of our direct-to-consumer business, coupled with disciplined expense and balance sheet management, enabled us to fare better than most through one of the most challenging economic periods in recent history.”
The ceo added that, in the quarter, revenues from Calvin Klein businesses rose 17 percent, international net revenues jumped 21 percent and net revenues from direct-to-consumer business spiked 31 percent. He also told analysts retail in 2009 represented 23 percent of the firm’s total revenue, with growth driven by a 3 percent gain in same-store sales and the addition of more than 125,000 square feet during the year. By year’s end, the company had 650,000 square feet of retail space.
Warnaco expects net revenue in fiscal 2010 to grow 5 to 7 percent and adjusted diluted EPS from continuing operations to finish in the $3.10 to $3.20 range.
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Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
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