NEW YORK — The Warnaco Group Inc. posted strong fourth-quarter earnings, beating analysts’ estimates, but the company gave 2011 guidance that was less than expected.
This story first appeared in the March 1, 2011 issue of WWD. Subscribe Today.
Joe Gromek, president and chief executive officer, said the firm’s retail business was off to a strong start this year and the firm was poised to continue its global expansion, but he also acknowledged price increases building in the supply chain.
“While we are clearly facing product cost and supply chain inflation, we believe our business model, anchored by our powerful Calvin Klein brand and our high-margin international and retail operations, positions us to address these challenges,” he said.
Net income for the quarter ended Jan. 1 rose 74 percent to $19.2 million, or 42 cents a diluted share, from $11 million, or 23 cents, a year earlier. Revenues increased 17 percent to $591.5 million from $505.4 million. Adjusted earnings of 74 cents beat Wall Street’s best guess by 4 cents.
Annual profits rose 44.4 percent to $138.6 million, or $2.99 a diluted share, on a 13.7 percent increase in revenues to $2.3 billion.
Adjusted annual profits tallied $3.57 a share, a figure Warnaco plans to boost to $3.85 to $4.05 this year — below the $4.08 analysts projected. The firm projected revenue growth of 7 to 9 percent this year.
Shares of Warnaco inched up 1.3 percent to $59.71 Monday, prior to the afternoon earnings report. The stock was down in after-market trading.
In all, it was a quiet day for the markets. The S&P Retail Index advanced 0.2 percent, or 0.96 points, to end at 512.79, as the Dow Jones Industrial Average increased 0.8 percent, or 95.89 points, to close at 12,226.34.
Shares of J. Crew Group Inc. slipped 10 cents to $43.12. The falling price could indicate some trepidation ahead of today’s shareholders’ meeting, where investors are scheduled to decide whether to sell the company to TPG Capital and Leonard Green & Partners for $43.50 a share, or about $3 billion.