Improved margins and inventory controls helped Kenneth Cole Productions Inc. beat expectations by 10 cents in the second quarter, but couldn’t keep the company out of the red.
This story first appeared in the August 7, 2009 issue of WWD. Subscribe Today.
For the three months ended June 30, the New York-based fashion firm recorded a loss of $3.3 million, or 18 cents a diluted share, versus a loss of $2.1 million, or 11 cents a share, in the year-ago period.
Revenues in the quarter fell 15.5 percent to $93.9 million from $111.2 million in the 2008 quarter.
Analysts polled by Yahoo Finance had, on average, expected a loss of 28 cents a share on revenues of $93.8 million.
The company said gross margin gained 100 basis points in the quarter to 42.4 percent of sales from 41.4 percent a year ago. It cut inventory levels in the three months by 28.2 percent to $35.1 million.
On a conference call with analysts, chief executive officer Jill Granoff called the company’s assortment “much tighter” and said the firm is working to reduce promotions and markdowns to secure better margins.
“While this progress is encouraging, we are disappointed by our overall financial results,” the ceo said.
Granoff revealed plans to relaunch the firm’s Kenneth Cole New York women’s footwear business to help drive sales in the coming months. The company plans to market the revived line based on its “comfort technology” and offer it in Kenneth Cole stores before expanding to wholesale next year.
For the first half of fiscal 2009, the company posted a loss of $11.4 million, or 64 cents a share, compared with a loss of $1.2 million, or 7 cents a share, a year ago.
Revenues in the six months fell 15.6 percent to $197.3 million from $233.6 million in the comparable 2008 period.