Despite first-quarter earnings cut in half by restructuring costs and exits from the swim business, Warnaco Group Inc. raised its guidance for the year, based on substantial international growth in its Calvin Klein business.
Warnaco revised its 2008 guidance, expecting revenues to grow 10 percent to 12 percent and diluted earnings per share growth of $2.65 to $2.75.
"Our strategies to maximize the opportunities in our Calvin Klein businesses, continue our global expansion and grow our direct-to-consumer platform are clearly working," said Joe Gromek, Warnaco president and chief executive officer. "While we are sensitive to the challenging economic environment, we believe our powerful portfolio of brands and diversified global business model leave us uniquely positioned to continue to drive profitable growth and enhance shareholder value."
For the quarter ended April 5, income fell 53 percent to $17.7 million, or 38 cents a diluted share, from $38 million, or 82 cents, in the first quarter of fiscal 2008.
Sales for the quarter climbed 18 percent to $574.9 million from $485.9 million, driven by growth in the Calvin Klein business, particularly internationally and direct to consumers. International sales now represent more than half of the company's revenues. An additional week in fiscal 2008's first quarter added $23 million in revenues.
But the company asked analysts to look at adjusted numbers, which excluded its discontinued brands (including Anne Cole and Lejaby), restructuring expenses and one-time tax costs. Adjusted earnings increased 30 percent to $56.4 million, or $1.22 a diluted share, from $43.4 million, or 94 cents. Adjusted sales climbed 21 percent to $568.2 million from $469.3 million.
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