NEW YORK — Third-quarter net profits at Warnaco Group Inc. more than quadrupled and easily surpassed analysts' estimates as the apparel company saw healthy full-priced selling and strength in its Calvin Klein and Chaps brands, as well as strong international sales.
In the quarter ended Oct. 1, New York-based Warnaco had net earnings of $6.9 million, or 15 cents a diluted share, compared with $1.6 million, or 3 cents, in the year-earlier period. The company said results in the latest quarter benefited from a $1.3 million gain from restructuring items and lower tax expense. Analysts had been expecting a profit of 12 cents in the latest quarter.
Net revenues were up 1 percent to $327.7 million from $324.4 million a year ago. The company said swimwear revenues outpaced results from last year and also helped offset sales declines in sportswear and intimate apparel.
"Our brands were well received, with notable strength in Chaps and Calvin Klein jeans and underwear," said Joe Gromek, president and chief executive officer of Warnaco, in a statement released Thursday after the close of the market. "We also saw significant increase in profitability resulting in part from increases in full-price sales, declines in off-price sales, the strength of our international businesses and the realization of initial benefits from the sourcing initiatives we implemented in 2004."
The company said gross margins in the third quarter expanded 280 basis points to 34.40 as a percent of sales from 31.60 last year.
In the nine months, Warnaco's net earnings rose 62.3 percent to $42.6 million, or 92 cents, versus $26.3 million, or 57 cents, in the year-ago period. Revenues rose 8.8 percent to $1.14 billion.
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