By  on October 28, 2005

NEW YORK — As Liz Claiborne Inc. posted third-quarter results in line with the low end of its guidance while cutting its full-year earnings forecast, the company said it remains interested in making acquisitions and launching its own brands.

Wall Street focused on the profit miss and lowered guidance, sending shares of Liz down 9.7 percent to close at $34.56. But one equity analyst said Liz's Juicy Couture brand could one day be a billion-dollar business.

"We have not lost our zest for acquisitions or internally developed brand launches. You should expect to see more on this front in the coming weeks," said Paul Charron, chairman and chief executive officer, during an investor conference call.

For the three months ended Oct. 1, the apparel giant posted a 1.7 percent rise in net income to $113.5 million, or $1.06 a diluted share, from $111.6 million, or $1.03, in the same year-ago quarter. Wall Street had expected the firm to deliver EPS of $1.09.

Sales in the quarter rose 2.3 percent to $1.34 billion from $1.31 billion. By segment, wholesale apparel sales were $837.3 million, representing 62.6 percent of total revenues. Wholesale nonapparel sales were $198.5 million, or 14.9 percent. Retail sales were $289.8 million, or 21.7 percent of total revenues, with comparable store sales up 6.6 percent. Lucky Brand same-store sales rose 18.1 percent. The balance of the revenue base was from licensing income.

For the nine months, net income was up 3.5 percent to $239.1 million, or $2.20 a diluted share, from $230.9 million, or $2.10, last year while sales increased 6.2 percent to $3.65 billion from $3.44 billion.

"The second half of 2005 is being adversely impacted by another series of developments which can be grouped under the general heading retail consolidation. Let me say that consolidation itself is not necessarily a bad thing. We have been accused from time to time of being consolidators ourselves. But it is the sheer number of mergers and buyouts and combinations and the reactions of the various parties to these events and the strategies which shift as a result which make navigation of these waters somewhat more challenging than has been the case historically," said Charron, referring to mergers such as Federated Department Stores and May Department Stores, and Kmart Holding Corp. acquiring Sears Holdings Corp.

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