CLAIBORNE’S QUARTER NET GAINS 17.3%
NEW YORK — With its women’s casual sportswear and Dana Buchman bridge sportswear continuing to shine, Liz Claiborne Inc. reported a 17.3 percent increase in first-quarter earnings on a 7.2 percent sales gain.
In the quarter ended April 5, the company earned $42.1 million, or 59 cents a share, up from $35.9 million, or 49 cents, a year ago.
The figures beat Wall Street estimates of 56 cents. Shares of Claiborne closed Monday down 1/2 to 45 1/2 on the New York Stock Exchange.
Sales rose to $596.6 million from $556.6 million.
Samuel M. Miller, chief financial officer, noted in a statement that the quarter marked Claiborne’s ninth consecutive quarterly increase in earnings per share. Particularly strong sales were tallied by Dana Buchman; the casual sportswear collection consisting of LizWear, Lizsport and Liz & Co., and men’s sportswear.
“Based on our wholesale bookings, the company is optimistic about its ability to continue to report improvement in sales and earnings for the remainder of 1997,” Miller said.
Paul R. Charron, chairman and chief executive officer, noted that Claiborne’s “momentum built steadily throughout 1996 and has extended into 1997, with positive overall performance at retail.
“We are encouraged by our progress in product development and are continuing to successfully drive our cost-reduction efforts, the reengineering of key business processes and the technology initiatives, which are key to furthering the transformation of Liz Claiborne.”
Carol Pope, an analyst at J.P. Morgan Securities Inc. said Claiborne’s “broad strength” contributed to its solid first-quarter performance.
Pope also said that sales of cosmetics and in Dana Buchman, two of the higher-margin divisions, were ahead of a year ago, and the retail division turned in positive gains in same-store sales.
The company as a whole “had very good margins,” she added, noting that it achieved a higher percentage of sales at regular prices.
Gross margins lifted to 38.8 percent of sales from 38 percent a year ago, while selling, general and administrative expenses were trimmed to 28.2 percent of sales from 28.3 percent.
Looking ahead, Pope predicts Claiborne will earn 38 cents a share in the second quarter against 31 cents, and $2.55 for the year against $2.15.
“In fact, the only area where there was any weakness was in the Collection,” she said. Sales and profits were down, but bookings for summer and fall merchandise are ahead of the year-ago period.
“This area may see improved results as early as the second fiscal quarter.”
Through April 18, the company further reported, it has repurchased 22.1 million shares, or $623 million worth of common stock, in its $675 million authorized repurchase plan.