Kenneth Cole Productions Inc. on Tuesday posted a first-quarter loss and a decline in revenues.
This story first appeared in the May 6, 2009 issue of WWD. Subscribe Today.
For the three months ended March 31, the company lost $8.2 million, or 46 cents a diluted share, compared with income of $807,000, or 4 cents, in the year-ago quarter. The results include restructuring and other one-time items of 5 cents a share. Excluding the one-time charges, the loss would have been 41 cents, 1 cent better than the consensus estimate and in line with guidance.
Total revenues fell 15.6 percent to $103.4 million from $122.5 million. Revenues include a 16.2 percent decrease in net sales to $94.4 million from $112.6 million and an 8.9 percent slip in licensing and other income to $9 million from $9.9 million. Same-store sales declined 20.4 percent
Consolidated gross margin for the quarter was 33.9 percent, compared with 41 percent a year ago, which reflects the firm’s promotional efforts to align inventory levels to sales trends. At the close of the quarter, inventory was $44.1 million, down from $49.1 million a year ago.
“While we continue to be disappointed with our financial results, we are encouraged by some of the progress we are making in some of the new strategic initiatives that we believe will appropriately position the company to be able to operate profitably in any business environment,” said Kenneth Cole, chairman and chief creative officer.
Cole added that the company has a strong balance sheet, with no long-term debt.
“We have placed tighter controls on expenses, inventory and capital investment,” chief executive officer Jill Granoff said. “At the same time, we are pursuing product innovation and an enhanced customer experience in all channels of distribution to build our brand for the long term.”
The company’s shares closed at $8.77, up 68 cents, or 8.4 percent, before the disclosure of results.