WARNACO, AUTHENTIC TOP WALL ST. ESTIMATES
NEW YORK — The Warnaco Group and Authentic Fitness Corp., both headed by Linda J. Wachner, reported record quarterly earnings Thursday, each topping Wall Street estimates by a penny a share.
Warnaco’s first-quarter earnings, sparked by strength both in intimate apparel and men’s wear, rose 19.1 percent to $18.1 million, or 34 cents a share. Wall Street was looking for 33 cents. In the year-ago quarter, Warnaco earned $15.2 million, or 29 cents a share. Revenues rose 21.8 percent to a record $251.5 million from $208.5 million.
Operating income for Warnaco in the three months ended April 5 was up 22.2 percent to $39.5 million from $32.3 million. In a statement, Wachner, president, chairman and chief executive officer, said that revenues in the intimate apparel division rose 24.2 percent to $194.8 million from $156.8 million, reflecting continued growth of the Warner’s, Olga and Calvin Klein brands as well as the impact of recent acquisitions, including Lejaby and GJM. She added that recently introduced Marilyn Monroe intimate apparel has had excellent retail response.
In addition, the statement said, the Marilyn Monroe line has provided an opportunity to expand Warnaco’s department store presence and target a new customer group. Wachner also cited continuing strength in Chaps by Ralph Lauren men’s wear. Men’s wear sales rose 11.2 percent to $47.5 million from $42.7 million in the year ago quarter. Excluding the year-ago sales of the discontinued Hathaway division, men’s wear revenues were up 36.1 percent, she pointed out.
At Authentic Fitness, led by improved results at the company’s core Speedo business and designer swimwear, third-quarter earnings after adjustment for normal taxes of 36 percent were up 46.9 percent to a record $11.5 million, or 51 cents a share. Wall Street expected 50 cents. In the year-earlier quarter, income before charges was $7.8 million, or 34 cents.
Before the tax adjustment, income for the quarter ended April 5 was $13.9 million or 62 cents. After the year-ago charges related to the bankruptcy of major customer Herman’s and an unsuccessful merger plan with Warnaco, Authentic Fitness reported a loss of $5.6 million. Revenues were up 6.2 percent to $105 million from $98.9 million. About $15.5 million in orders were not shipped because of a flood at the company’s Sparks, Nev., warehouse. Had those orders been shipped, revenues would have been up 21.7 percent, the company said.
In addition to strength in the Speedo business and in the designer swimwear business, operating profits in the retail operation jumped to $1.2 million from $700,000 in the year-ago quarter, Wachner, chairman and ceo of Authentic, said in a telephone interview. Retail sales were up 26.6 percent to $10.5 million. Wachner said same-store sales were down a little less than 10 percent, noting that the reason for the same-store sales decline was the opening of more than one store in the same market.
The company operated 144 stores at the end of the quarter compared to 78 units a year earlier.
Revenues for the Speedo division rose 10.5 percent to $56.3 million, while revenues for the designer swimwear, which includes Anne Cole, Catalina, Cole of California and Oscar de la Renta, were up 14.2 percent to $34.3 million.
For the nine months ended April 5, net income was $7 million, or 31 cents a share, against $15.5 million, or 69 cents, before special charges a year earlier.
After the special charges, the company reported a net loss of $4.6 million in the 1996 period.
Sales slipped 2.2 percent to $214.2 million from $219.1 million, but after adjusting for discontinuance of the skiwear and outlet divisions and the flood, sales would have been up 10.3 percent.
Warnaco’s shares Thursday closed at 28 5/8, up 1/4 on the New York Stock Exchange. Authentic, also on the NYSE, closed at 14 7/8, down 3/4.
Authentic Fitness is based in Los Angeles and Warnaco is in New York.