NEW YORK -- Kellwood Co. on Thursday posted fourth-quarter losses that nearly doubled those of a year ago but were lighter after exclusion of a special gain in 2000.
For the three months ended Jan. 31, the loss was $3.1 million, or 14 cents a share, compared with a loss of $1.6 million, or 7 cents, in the year-ago quarter. Last year's fourth quarter included noncash income connected with the company's overfunded pension plan and a gain from the plan's termination. Excluding the pension-related items, last year's loss would have been 30 cents.
Sales in the quarter fell 13 percent to $470 million from $540.3 million, reflecting the softness in the economy and cautious buying by the consumer. Women's sportswear sales were down 16 percent to $56 million, men's sportswear was down 14 percent to $13 million and other soft goods -- which include intimate apparel -- dipped 2 percent to $2 million.
Hal J. Upbin, chairman, president and chief executive officer, said in a statement: "Total overhead has been reduced by approximately $50 million, or 9 percent, on an annualized basis. The company has closed all of its domestic sewing operations and has moved more of its sourcing to contractors in the Far East."
Kellwood also reduced its debt by 38 percent to $209 million from the prior year. Its ratio of debt-to-capital dropped to 42 percent from 56 percent a year ago. In addition, steps to reduce inventory and debt resulted in $69 million of cash and other investment income, up $59 million from the prior year.
Because the company is unable to predict when consumers will return to previous levels of apparel spending, it is projecting a 9 percent drop in fiscal 2002 sales to $2.1 billion. Earnings per share for the current fiscal year, which ends next January, are projected in the range of $1.80 to $1.90, but could be impacted by a potential first-quarter charge.
Upbin said that the company is analyzing its sourcing and distribution infrastructure. Because global markets favor sourcing piece goods and finished product out of the Far East, as well as the downturn in the economy, Kellwood had some excess capacity in its warehousing and distribution network. If the firm decides to take certain actions to align its operations with the current business trends, it would take a charge of 40 cents a share in the first quarter, which ends April 30.
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