NEW YORK — Robust sales helped Kenneth Cole Productions raise its bottom line 15.8 percent in the third quarter, despite a charge taken on its Rockefeller Plaza store.
This story first appeared in the October 31, 2002 issue of WWD. Subscribe Today.
For the three months ended Sept. 30, the footwear, apparel and accessories marketer reported net income swelled to $6.8 million, or 33 cents. That compares with last year’s profits of $5.9 million, or 29 cents. A $4.4 million pretax charge for the write-down of the leasehold improvements at the Rockefeller Center flagship store subtracted 14 cents from earnings per share, while an audit of certain licensees resulted in a 3-cent gain. Without these items, EPS would have totaled 44 cents, 4 cents higher than Wall Street estimates.
Total revenues for the period rose 22 percent to $123.5 million from $101.2 million a year ago.
The company said its Rockefeller Plaza flagship was “dramatically affected by post-Sept. 11 retail environment here last year and continues to track below planned levels of sales productivity.” While hopeful that it can turn a profit, KCP deemed an asset impairment charge “prudent and appropriate” and noted that the store’s significant contributions to its brand profile, international visibility and public relations value “cannot be quantified.”
KCP released its earnings after the close of the market Wednesday. In New York Stock Exchange trading earlier in the day, its shares closed off 20 cents, or 0.9 percent, at $23.75.
“Despite our conservative nature and outlook, we were able to realize record revenues while controlling costs, which enhanced our operating profitability,” Kenneth Cole, chairman and chief executive, said in a statement.
By segment, KCP’s wholesale revenue increased 29.4 percent to $76 million from $58.7 million in last year’s quarter. Consumer direct sales rose 7.5 percent to $39.3 million from $36.6 million in the year-ago period. Licensing revenue extended 38.5 percent to $8.2 million versus $5.9 million, while comparable-store sales slumped 0.6 percent for the quarter.
Looking ahead, the company raised its EPS guidance for the fourth quarter to between 32 and 34 cents, with sales expected to finish between $108 million and $110 million. This compares with prior guidance of 30 to 32 cents and $103 million to $108 million, respectively.
For the nine months, income rose 23.1 percent to $17.7 million, or 86 cents a diluted share, compared with $14.4 million, or 69 cents. Sales notched up 9.9 percent to $315.7 million from $287.3 million.