NEW YORK — The Warnaco Group Inc. on Monday posted improved fourth-quarter and full-year results, and substantially increased earnings from continuing operations for both periods.

Investors liked what they saw, sending Warnaco shares to their highest level since the firm’s emergence from bankruptcy last February. After peaking at $19.39 in intraday trading, shares of Warnaco closed Monday at $19, up $1.03 or 5.7 percent, in trading on the Big Board.

For the three months ended Jan. 3, Warnaco narrowed its loss to $4.1 million, or 9 cents a share, from $59.5 million, or $1.12 a share, in the same year-ago quarter. The results included a $6.5 million gain in pension income in connection with a change in accounting for defined benefit pension plans. On a pro forma basis, income from continuing operations was $15.1 million, or 33 cents a diluted share, against a $663,000 loss, or 1 cent, in the year-ago quarter.

Revenues in the latest quarter dipped 0.5 percent to $337.4 million from $339.1 million. The intimate apparel group lost 3.1 percent in revenues to $146 million from $150.7 million, while the sportswear group fell by 7.9 percent, to $117.3 million from $127.5 million. The swimwear group gained a whopping 21.5 percent in revenues to $74.1 million from $61 million.

The firm also restated earnings for the first three quarters, reducing each by 1 cent a share in connection with a noncash amortization charge of $2.1 million. The restatements resulted from a reclassification of the Calvin Klein jeans license to a finite-lived asset that is amortized over the remaining license period of 42 years. Warnaco said that the restatement had no impact on either earnings before interest, taxes, depreciation and amortization or cash flows from operations.

“Fiscal 2002 and 2003 marked a rewarding [period] for Warnaco. We grew profitably and at the same time began to capitalize for the potential that we believe exists for our brand and company,” Joe Gromek, president and chief executive officer, said during a conference call.

He highlighted key initiatives the company focused on during 2003: it strengthened its relationship with Calvin Klein jeans and Phillips-Van Heusen; extended the licensing agreement with Polo Ralph Lauren for Chaps Sportswear to 2018, as well as added new product categories; formed new licensing partnerships for JLo by Jennifer Lopez lingerie and Nautica swimwear and cover-ups; extended the Speedo brand to a beach fashion line, and soon will launch the innerwear line Lejaby Rose.The company also has been busy with a junior underwear line under the Choice Calvin Klein label, and exited noncore businesses such as the sale of its A.B.S. by Allen Schwartz unit and the closure of its 44 remaining Speedo Authentic Fitness retail stores.

Tom Wyatt, president of the intimate apparel group, said on the call, “Both Warner’s and Olga show signs of recovery but continue to be challenged.”

He noted that Olga was the one that continues to be “most challenged, [while] several of Warner’s new product introductions have met favorable consumer acceptance.” One bright note for Olga, observed Wyatt, was the recent relaunch of Olga petites. He said it was a business that historically accounted for a “meaningful portion” of the firm’s total Olga business. “A favorable product review prompted retailers to move up delivery by about 30 days, with initial deliveries occurring in December. We shipped Olga petites to over 1,000 department stores currently demonstrating highly improved execution.”

As for Lejaby Rose, Wyatt said it was a growth opportunity for Warnaco, with its more affordable price points and association with the Lejaby master brand. He boasted that the door count for Rose is in excess of 200, an increase from the initial goal of 150.

For Warnaco, the growth opportunity in intimates may be yet to come. The newest addition, JLo by Jennifer Lopez, was initially planned for between 400 to 500 doors but because of an overwhelmingly positive response by retailers, Warnaco has shifted its plan for an increased launch in 800 doors.

Roger Williams, president of the swimwear group, said during the call that gains for the segment were driven by double-digit growth from Speedo, Catalina and the Anne Cole lines. He also noted that Warnaco is signing a license agreement with the U.S. Olympic Committee to produce a line of Olympic apparel.

Gromek noted that Chaps has been a strong performer, and attributed the positive momentum to a renewed interest in the men’s sportswear category. “We believe that the Chaps brand represents our single largest revenue growth opportunity over the next three years driven by products and channel expansion we have planned,” he said. Gromek added that Warnaco is also producing a Chaps denim collection, with an updated logo, that will be sold in more than 900 department store doors.As for Calvin Klein underwear, Gromek said that the brand has been impressive “geographically,” with 2003 European revenue exceeding $110 million and Asian operations over $25 million. The company ended 2003 with over 33 freestanding CKU stores globally, and expects to have over 60 stores worldwide by the end of 2004. Calvin Klein jeans, however, remains challenged.

The firm said over the next three years it was targeting “modest near-term revenue growth,” along with a gross margin percentage rising by over 1 percentage point per year on average.

For the year, income was $1.9 million, or 4 cents a share, against a loss of $964.9 million, or $18.21, a year earlier, most of it attributable to an $801.6 million accounting effect. The year-end results reflect an 11-month period. Warnaco exited bankruptcy proceedings on Feb. 5, 2003. Revenues for the period fell by 10.2 percent to $1.26 billion from $1.41 billion.

On a pro forma basis, income from continuing operations jumped 69.1 percent to $47.6 million, or $1.05 a share, from $28.2 million, or 62 cents, in the prior period. Revenues for the year declined by 2.4 percent to $1.37 billion from $1.41 billion. In the intimate apparel group, revenues fell by 6.7 percent to $572.8 million from $614.2 million. The sportswear group also fell, dropping 8.9 percent to $440.5 million from $483.5 million. As in the quarter, swimwear showed an increase, gaining 16.2 percent to $361.1 million from $310.6 million.

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