Losses continued for Liz Claiborne Inc. in the first quarter, driven by continued poor performance in the partnered brands segment as well as restructuring costs.
For the three months ended April 5, Claiborne lost $31 million, or 33 cents a diluted share, down from profits of $16.2 million, or 16 cents, in the first quarter of 2007, which was already a sharp decline from the year before.
Sales for the quarter increased about 5 percent to $1.12 billion from $1.07 billion, saved by strong growth in all four direct brands, which made up more than half of the company’s sales for the quarter. Juicy Couture’s revenues increased 58 percent to $140 million, and Lucky Brand sales rose 21 percent to $110 million. Kate Spade sales climbed 44 percent to $28 million. Helped by the strength of the euro, Mexx sales grew 20 percent to $342 million.
But the vendor lowered its 2008 adjusted earnings per share guidance to a range of $1.40 to $1.60 from a previous range of $1.50 to $1.70.
“No question the difficult economic environment has lowered visibility into our future financial performance and presented new challenges for us, our retail partners and consumers both in the U.S. and Europe,” chief executive officer William L. McComb said. “In providing this revised guidance, we note that higher food and energy prices, higher mortgage payments and declining consumer confidence anticipated for the second half of the year are reducing our visibility into key metrics that impact our performance, including retail traffic, conversion rates, expected markdowns and wholesale shipments.”
Meanwhile, keeping its focus on low prices, Wal-Mart Stores Inc. improved both first-quarter earnings and sales.
Earnings for the quarter advanced 6.9 percent to $3.02 billion, or 76 cents a share. Revenues for the three months ended April 30 rose 10.3 percent to $95.3 billion. Comparable-store sales increased 3.3 percent.
“We’re off to a solid start,” said Lee Scott, president and chief executive officer. “Our customers appreciate that Wal-Mart is the consistent price leader.”
Even though Wal-Mart basically kicked off retail earnings season on a positive note, other chains set to report this week are expected to have fared worse as the consumer tightened up her purse strings.
For the second quarter, Wal-Mart expects U.S. comp sales to be flat to up 2 percent as earnings come in at 78 to 81 cents a share.
For complete coverage, see Wednesday’s issue of WWD.