Kenneth Cole Productions Inc. reported Thursday a 62.8 percent nosedive in third-quarter earnings, hurt by a drop-off in its wholesale business.
For the three months ended Sept. 30, earnings fell to $3.4 million, or 17 cents a diluted share, from $9.2 million, or 45 cents, in the year-ago period. Total revenues fell 9.3 percent to $130.3 million from $143.7 million, which included a sales decline of 10.7 percent to $118.6 million from $132.8 million last year. The balance of revenues was from licensing income.
For the nine-month period, earnings plunged 45.8 percent to $10.2 million, or 50 cents a diluted share, from $18.8 million, or 92 cents, in last year's period. Total revenues decreased 5.7 percent to $378.6 million from $401.5 million, which included a sales decline of 6.2 percent to $346.8 million from $369.9 million.
The company said wholesale revenues, affected by the overall weakness in the apparel and footwear market, slid 13.9 percent to $78.8 million, compared with $91.5 million in the year-ago period.
"While our financial results continue to reflect a business in transition, important elements of the business continue to improve," Kenneth Cole, chairman and chief executive officer, said in a statement. "Despite the tough market environment, there are a number of growth and marketing initiatives planned for next year, which we believe should result in a meaningful improvement in our earnings."
The debut of the men's sportswear line has been well received and has bookings slightly above plan for the spring, the firm said.
Kenneth Cole expects fourth-quarter earnings in the range of 15 cents to 17 cents a diluted share, which includes an expected 4 cents per-share gain on a favorable onetime tax item.
Shares of the company fell 1.2 percent Thursday to close at $17.40 in New York Stock Exchange trading.