Continued progress in Asia and Latin America more than compensated for softness in U.S. and southern Europe as Warnaco Inc. matched analysts’ estimates with a 7.5 percent increase in third-quarter profits.
In the three months ended Oct. 1, the New York-based apparel marketer generated net income of $44.6 million, or $1.03 a diluted share, versus profits of $41.5 million, or 90 cents, in the year-ago period.
Revenues expanded 8.1 percent, to $645.1 million from $596.8 million, led by a 28.6 percent increase in Asia, to $130 million, and 30.3 percent increase in Central and South America and Mexico, to $62.8 million. Without currency fluctuation, the increases in the two regions would have been 21.7 percent and 24.4 percent, respectively.
Meanwhile, revenues in the U.S. declined 3.3 percent, to $241.8 million, and in Europe rose 9.3 percent, to $182.3 million. Excluding currency impact, European increases would have been 0.4 percent higher, with strength in northern Europe offset by weakness in critical markets like Spain and Italy.
The Calvin Klein jeans and underwear businesses accounted for 80 percent of company revenues and generated double-digit revenue growth, the company said. Calvin Klein Jeans revenue was up 8 percent, with international up 19 percent.
Excluding special items, EPS came in at $1.07, in line with analysts’ consensus estimates, which also called for revenues of $656.4 million.
Joseph Gromek, president and chief executive officer, said on a Thursday conference call that international revenues accounted for 63 percent of Warnaco’s business in the quarter. “Asia and Latin America continue to lead the growth,” he said. “Our China business, approaching $200 million by yearend, remains a dynamic growth vehicle as we aggressively expand our direct-to-consumer penetration.”
Retail revenues overall rose 30.5 percent, to $186.2 million, with comparable-store sales up 2 percent. “Direct-to-consumer revenues now represent 29 percent of total company sales and we expect that percentage to climb significantly in the fourth quarter,” Gromek added.
Asked by an analyst to quantify pockets of resistance to higher prices this year, Helen McCluskey, chief operating officer, said there’s been “no resistance whatsoever” in Latin America and Asia. To respond to growing price sensitivity in southern Europe, “we’ve been much more promotional to make sure that we’re keeping inventory cleared.”
She also acknowledged that “it’s been difficult to pass on price increases” within U.S. value channels. “We’re not planning any additional price increases going into the fourth quarter,” she said.
While spring Calvin Klein underwear bookings were up at a double-digit pace, McCluskey said that global jeanswear booking were “probably close to flat.”
For the nine months, net income rose 12.3 percent to $134.1 million, or $3 a diluted share, while revenues grew 11.4 percent to $1.9 billion.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast