NEW YORK -- Multibrand and multichannel diversification strategies helped Liz Claiborne Inc. post fourth-quarter results that, before special items, bested Wall Street's expectations by a penny.
For the quarter ended Dec. 29, income was up 4.8 percent, to $41.5 million, or 39 cents a diluted share, from $39.6 million, or 38 cents, in the comparable year-ago period. Excluding a special investment gain and a restructuring charge, earnings per share were 49 cents, compared with last year's 48 cents. Analysts polled by First Call had expected 48 cents for the quarter. Sales were up 17.6 percent, to $886.5 million from $754 million.
The company is forecasting a fiscal 2002 sales increase of 4 to 6 percent and EPS of between $2.08 and $2.13. It also is laying the groundwork for an increasingly global business.
Shares of Claiborne closed Thursday at $29.10, up 31 cents, or 1.1 percent, on the New York Stock Exchange. After a two-for-one split on Jan. 16, shares established a 52-week high of $29.25 on Feb. 14.
Robert Drbul of Lehman Bros., who on Wednesday maintained his "buy" rating on the stock, wrote in a research note that he believes there is upside potential for 2002 earnings based on its momentum going into fiscal 2002.
Trumpeting the firm's 24th consecutive quarter of sales growth and its 28th straight quarter of growth in EPS, excluding special items, Paul Charron, chairman and chief executive officer, explained on a conference call to Wall Street analysts that "strengths in one area offset weaknesses in other areas."
The ceo noted that 2001 was highlighted by improvements in fit and the matching of products to the needs of consumers. Last year's results benefited from "dramatic improvement" in DKNY Jeans and the Kenneth Cole business. In nonapparel categories, the Monet and the Liz Claiborne jewelry businesses performed well. The cosmetics business, Charron added, was also healthy through the introduction of the Mambo fragrance and consistent performance from the Curve and Lucky You fragrances. The acquisition of Mexx, the Netherlands-based purveyor of European apparel and accessories, also contributed to the bottom line.
Charron, who noted that the Liz Claiborne brand is underdeveloped in Europe, said that within the next several months the company will begin deciding which brands will be introduced in Europe. The company also will be making similar moves concerning the introduction of Mexx in the U.S. He added that the move into Europe of Claiborne won't be before late 2003, while the introduction of Mexx here will be "probably around 2004."
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