The Warnaco Group Inc. on Monday posted third-quarter profits well below prior-year numbers, but that were in line with the company's strategic rationalization of its swimwear portfolio.
As a result, Warnaco raised guidance for fiscal 2007.
For the three months ended Sept. 29, net income fell 69.7 percent to $4.4 million, or 10 cents a diluted share, from $14.6 million, or 31 cents, in the same year-ago period. On an adjusted basis, taking into account discontinued operations and restructuring charges, income rose 36.7 percent to $20 million, or 43 cents a diluted share, from $14.6 million, or 32 cents, a year ago. The company said on Sept. 18 that it intends to exit all of its swimwear group's private label and designer swimwear brands, with the exception of Calvin Klein swimwear.
Revenues for the quarter rose 13.1 percent to $474.8 million from $419.6 million. On an adjusted basis, revenues rose 13.3 percent to $472.6 million from $417.1 million. Sportswear and intimate apparel revenues soared 14 and 19 percent, respectively.
For the nine months, net income gained 76.2 percent to $56.2 million, or $1.21 a diluted share, from $31.9 million, or 68 cents, in the same year-ago quarter. Adjusted for discontinued operations and restructuring charges, income jumped 135.8 percent to $75.3 million, or $1.62 a diluted share, from $31.9 million, or 68 cents, last year. Revenues for the nine months rose 14.7 percent to $1.39 billion from $1.21 billion. On an adjusted basis, revenues rose 15.3 percent to $1.35 billion from $1.17 billion.
"The power of our brands and the diversity of our global business model are evident in the strong results of our ongoing business we reported today," said Joe Gromek, president and chief executive officer, in a statement.
During the quarter, the Calvin Klein Jeans business continued its momentum, posting a 21 percent increase in net revenues, the company said. In intimates, strong global growth in Calvin Klein Underwear's wholesale and retail businesses drove gains in both areas, with retail revenues growing 35 percent due in part to new store openings.
For fiscal 2007, the company said it expects net revenues to grow 11 to 12 percent over adjusted fiscal 2006 levels, and forecasts diluted earnings per share from continuing operations in the range of $2.10 to $2.18.
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