For the three months ended Oct. 3, income was $29.7 million, or 63 cents a diluted share, versus $26.5 million, or 56 cents, a year ago. On an adjusted basis reflecting restructuring charges, pension income and taxes, income was $33.6 million, or 72 cents, versus $31.6 million, or 66 cents.
This story first appeared in the November 5, 2009 issue of WWD. Subscribe Today.
Total revenues were down 4.9 percent to $520.9 million from $547.6 million. By category, the company said sales in the sportswear group declined 1.1 percent to $312.9 million and swimwear dipped 4.6 percent to $30.2 million. The hardest-hit category was intimate apparel, where sales were off 11 percent to $177.8 million.
The company raised its guidance for fiscal 2009, saying it now expects earnings of between $2.70 and $2.80 a diluted share, compared with prior guidance of $2.60 to $2.75 and implying fourth-quarter earnings per share of between 87 and 97 cents. Revenues are now expected to fall 3 to 5 percent, versus the 7 to 9 percent decline forecast earlier.
Joe Gromek, president and chief executive officer, noted a disciplined approach to expenses and working capital had resulted in year-over-year inventory reductions of $34 million and an increase of $100 million over last year in cash on hand, to $229 million.
“Our strong third-quarter results validated our diversified business model, and reflects the continuing success of our long-term strategies, namely maximizing our Calvin Klein businesses, increasing our international presence and expanding our direct consumer footprint,” said Gromek on a conference call with Wall Street analysts.
He said that on a constant dollar basis, Calvin Klein net revenues were up 2 percent in the quarter, with operating margins up 170 basis points to 19 percent of sales. “Strength in our international business more than offset domestic declines,” the ceo said.
Calvin Klein Underwear revenues for the quarter decreased 9 percent. Revenues for Calvin Klein Jeans improved 6 percent on a constant dollar basis, with international sales growing by 12 percent. U.S. department store sales of Calvin Klein Jeans were challenged in the quarter, but executives said they were seeing some momentum at retail.
Investors sent shares down 5.4 percent to $40.53.