NEW YORK--The Warnaco Group said it expects profits to rise 64 percent in the second quarter ended July 9, boosted by strength in both intimate apparel and men's wear divisions.
The results also benefited from lower interest costs.
Earnings are expected to reach $9 million, or 44 cents a share, up from $5.5 million, or 28 cents, a year earlier. Sales are expected to increase 20 percent to $190 million from $158.3 million.
Operating income will be up about 12 percent to $18.1 million from $16.2 million.
Linda J. Wachner, chairman and chief executive officer, said the gain was driven by continued strength in intimate apparel and the Chaps by Ralph Lauren men's sportswear line, as well as a turnaround by the Hathaway men's line.
At the intimate apparel division, profits were "up significantly," though the company declined to provide figures.
Intimate apparel sales jumped 40 percent to $140 million, bolstered by Warner's new Non-So-Innocent-Nudes line of bras and the Calvin Klein line of men's underwear acquired in March. Wachner also cited a strong performance by Miracle Bra--a lacy push-up bra distributed through The Limited's Victoria's Secret Stores--Valentino innerwear and the successful national rollout of the distribution of bras and panties through Avon Products representatives.
Wachner said intimate apparel sales in the second half will be helped by several new products, including the Not-So-Innocent-Nudes line of seamless bras, which come in five shades to match women's skin tones, and a department store complement to its Miracle Bra. Warnaco also expects to complete the acquisition of the Calvin Klein women's underwear license in January.
In men's wear, sales declined 20 percent to $39 million due to the company's sale last year of the Puritan Sportswear line to Wal-Mart Stores Inc. and the termination of licensing agreements to produce Christian Dior men's shirts and ties and Jack Nicklaus golf shirts.
However, profits in men's wear rose 26 percent to $2.9 million, helped by 36 percent sales gain by Chaps by Ralph Lauren sportswear line and a turnaround at Hathaway dress shirts and sports shirts, where sales soared 71 percent.
Wachner said that due to Hathaway's improved performance, the company is no longer looking to sell the line. It plans to expand the line in golfing apparel, including pants and jackets.
Wachner noted that Warnaco's previously announced plans to run a test with QVC home shopping is on the back burner for now, but she said the company is still interested in the television retailing concept.
Full results will be released Tuesday.
--Fairchild News Service

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