VAN NUYS, Calif.--Propelled by a strong performance by the Speedo brand and its retail stores, Authentic Fitness Corp. reported earnings rose 14.3 percent in the first quarter ended Oct.1.
Earnings rose to $2.1 million from $1.8 million a year earlier. Per-share earnings were 10 cents in both periods, reflecting the sale of 4 million shares in a December 1993 secondary offering.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 21 percent to $5.7 million from $4.7 million.
Sales gained 31.4 percent to $37.6 million from $28.6 million.
Linda J. Wachner, chairman and chief executive officer, said sales and earnings gains "continued to be fueled by the growth of our Speedo swimwear and activewear brands and the successful expansion of our Speedo Authentic Fitness retail concept."
Speedo's wholesale volume was up 10 percent to $18.5 million from $16.7 million, with profits up about 15 percent. Wachner said the designer swimwear division is on track to reach $50 million in sales in its fiscal year ending June 1995, up from $28.7 million in its first year of operations in fiscal 1994.
The designer swimwear area was established with the acquisition of Anne Cole, Cole of California, Catalina and Oscar de la Renta in October 1993. The group had sales of $4.4 million in the quarter.
The company also plans to introduce the Sandcastle swimwear brand in Avon's catalog for Avon Products Inc. The first order will be shipped in March.
Wachner said order backlog for the overall firm is up about 15 percent over a year ago.
The retail division, which operated 30 stores as of Oct. 21, had sales of $2.8 million versus $300,000 last year. The two stores that have been open for more than a year, Beverly Center, Los Angeles, and Roosevelt Field, Garden City, N.Y., showed sales gains of 10 percent, Wachner noted. Authentic Fitness added 11 new stores in the quarter and plans to open 20 more to end 1994 with 50 in operation. Expansion plans call for the opening of 150 additional stores by the end of calendar 1996.
Bruce M. Missett, an analyst at Morgan Stanley, was particularly impressed with the aggressive rollout of the stores, considering all the organizational requirements, while at the same time keeping sales levels over $450 per square foot.
Missett estimates Authentic Fitness will earn 90 cents in its year ending June 1995 against 67 cents before the costs of acquiring the Cole/Catalina swimwear business a year earlier, representing an increase of 34 percent.
--Fairchild News Service

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