NEW YORK--The Warnaco Group reported profits up 65 percent in the second quarter ended July 9, closely in line with a forecast it announced last week.
Quarter earnings were $9.1 million, or 44 cents a share, up from $5.5 million, or 28 cents, a year ago. Sales climbed 20.3 percent to $190.3 million from $158.3 million. In the half, earnings more than tripled to $18 million, or 89 cents, from $5.8 million, or 29 cents. The latest six months includes $3 million in losses related to the California earthquake, while the year-ago half included a $10.5 million charge for a change in accounting for retirement benefits.
Sales in the half gained 7.3 percent to $338 million from $315.1 million.
Warnaco stock closed at 34 3/8, up 5/8, on the New York Stock Exchange Tuesday. When the forecast came out on Friday last week predicting a 64 percent gain in second-quarter profits, the stock picked up 1 1/8 to 33 1/8.
Intimate apparel sales in the quarter climbed 40.3 percent to $141.4 million, led by "excellent sales and earnings" from Calvin Klein men's underwear business, acquired in March; the successful launch of a new line of molded seamless products under the Not So Innocent Nudes label and continuing success in selling its Warner's and Fruit of the Loom bras through Avon Products Inc., stated Linda J. Wachner, chairman and president.
Sales in the men's wear division for the quarter were off 20 percent to 48.9 million, reflecting the firm's decision to discontinue Christian Dior shirts and ties, Jack Nicklaus and Puritan lines. However, men's wear profits gained 26 percent due to a strong performance from Chaps by Ralph Lauren sportswear and Hathaway sports and dress shirts. The company declined to pinpoint how intimate apparel profits in the quarter compared with a year ago, although it has stated they were "up significantly."
--Fairchild News Service

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