The Warnaco Group Inc.'s first-quarter profits soared 173.4 percent over year-ago results as the company experienced robust sales while benefiting from improved operations.
For the three months ended March 31, net income rose to $38 million, or 82 cents a diluted share, from $13.9 million, or 30 cents, in the same year-ago quarter. Revenues jumped 20.7 percent to $547.2 million from $453.2 million.
For the quarter, the sportswear group's revenues rose 40.2 percent, while the intimate apparel group gained 15.9 percent. Revenues in the swimwear group inched up 1.8 percent.
Due to better than expected first-quarter performance, Warnaco said it expects diluted earnings per share for fiscal 2007 to be in the range of $1.75 to $1.85, presuming minimal pension expense.
On a conference call with analysts, management touted its growth as an international firm. "We are truly a global company with nearly 50 percent of our revenues generated outside of the U.S. Our acquisition last year of Calvin Klein jeans Europe and Asia reflected that vision and is driving our performance today," said Joe Gromek, president and chief executive officer.
Gromek added that the company's diversified market strategy mitigates risk. "We are not reliant on any particular geography, customer or channel. The strategy is working and we are off to a great start in 2007," Gromek boasted.
During the quarter, revenue growth was up 3 percent in the U.S., 62 percent in Europe and 53 percent is Asia. The key driver of that growth was the worldwide Calvin Klein business, which grew by 48 percent or almost $100 million compared to the prior-year's quarter. Warnaco said it expects annual growth in its billion-dollar Calvin Klein business to exceed 15 percent. One component of that business that is considered a growth vehicle is the CK accessories operation, which generated over $10 million in revenue for the quarter, and which is expected to be a $100 million business over the next three years.
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