WARNACO’S EARNINGS UP 24.6% FOR YEAR
NEW YORK – The Warnaco Group, powered by strength across the board in intimate apparel, reported operating earnings rose 19.2 percent in the fourth quarter and 24.6 percent in the year ended Jan. 7.
Linda Wachner, chairman, president and chief executive officer, predicted more gains for the current year — a 25 percent increase in net earnings with sales ahead 15 percent.
Operating earnings in the most recent quarter rose to $23.6 million, or 57 cents a share, from $19.7 million, or 50 cents. Last year a charge of $18.6 million to restructure men’s sportswear divisions made net earnings $1.1 million, or 3 cents. Sales increased 13.7 percent to $232.9 million from $204.7 million. In the year, operating earnings rose to $66.3 million, or $1.61, from $53.3 million, or $1.34. The latest year includes a $3 million charge related to the California earthquake, trimming net earnings to $63.3 million, or $1.53. After the men’s wear restructuring and a $10.5 million accounting charge, net earnings in 1993 were $24.1 million, or 61 cents.
Interest expense fell 17 percent to $32.5 million due to refinancings.
Wall Street reacted with moderation to the good news. Warnaco’s stock rose 1/4 Thursday on the New York Stock Exchange to close at 16 5/8.
Wachner said results “continue to be driven by growth in intimate apparel brands, particularly at Warner’s, Olga, Fruit of the Loom bras, and Calvin Klein men’s underwear, and greater profitability at men’s wear.”
Intimate apparel operating profits rose “substantially” in both quarter and year, she said. Intimate apparel sales rose 47.3 percent in the quarter to $172 million from $116.8 million, partly reflecting the addition of Calvin Klein men’s underwear. For the full year, intimate apparel sales grew 33.6 percent to $565.4 million from $423.2 million.
Calvin Klein men’s underwear business continues to be “very strong,” and the launch of Calvin Klein women’s underwear was “sensational,” said Wachner. She added that sales of Warner’s, Olga, and Fruit of the Loom have been moving ahead more than 20 percent in each of the last three quarters,.
Wachner noted that intimate apparel sales are being helped by new product introductions, and Warnaco’s distribution agreement with Avon Products for Warner’s and Fruit of the Loom has “experienced excellent results.” — Fairchild News Service