By  on September 15, 2005

BERLIN — Due to strong quarterly financial results, German fashion house Escada AG is expecting to outperform its forecast earnings for the fiscal year.

On Wednesday, Escada said third-quarter profits after taxes and minority interests came in at 2.8 million euros, or $3.4 million, which compares with a loss of 2.6 million euros, or $3.2 million, in the same period last year.

Dollar figures are at the average exchange rate.

Earnings before interest, taxes, depreciation and amortization rose 37.9 percent to 12 million euros, or $14.8 million, from 8.7 million euros, or $10.7 million in the prior year. Escada achieved its business targets for the quarter with group revenues increasing 3.5 percent to 150 million euros, or $184.4 million, from 144.9 million euros, or $178.1 million, in the prior year.

Escada credits its healthy performance to leaner operating processes and cost-cutting measures, which were initiatives launched last year. The company believes its price discipline strategy in stores also has helped increase earnings.

For fiscal year 2004-2005, the label expects revenues in euros to rise slightly. Escada hopes to outperform its target of increasing EBITDA by at least 10 million euros, or $12.3 million for the year.

The company also feels positive about fiscal year 2005-2006, with its new collections getting a very strong reaction in the market. Orders for the 2006 spring-summer collection are up by 10 percent compared with last year, for both Escada collection and Escada Sport.

While warning against overoptimism and stressing that the market remains tight for luxury women's wear in Europe, Wolfgang Ley, the group's chief executive officer, said Escada was "very satisfied" with how buyers have responded to the new collections.

"Our vigorous increase in new orders implies that business will continue to develop satisfactorily in the 2005-2006 year ahead," he said.

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