LIZ CLAIBORNE QUARTER SEES RISE IN NET, SALES

Byline: Vicki M. Young / With contributions from Kristin Larson

NEW YORK — Despite the impact of the tragic events of Sept. 11, Liz Claiborne Inc. on Thursday posted an 8.2 percent increase in third-quarter profits along with a corresponding 14.7 percent jump in sales.
Separately, Claiborne announced Thursday that it has entered into a partnership with Myer Grace Bros. to sell apparel in the company’s department stores throughout Australia by August 2002.
For the quarter ended Sept. 29, net income rose to $72.6 million, or $1.38 a diluted share, from $67.1 million, or $1.26, in the year-ago period. Earnings per share rose 9.5 percent in the quarter. Sales hit the $1 billion mark, compared with just $879 million last year.
Paul R. Charron, chairman and chief executive officer, said in a statement: “While we are generally pleased with the performance of our brands in this unsettled environment, and while we continue to have confidence that our core strategies remain relevant, we cannot plan that the challenges we see ahead will become easier to deal with or will go away any time soon.”
The firm provided fourth-quarter EPS guidance in the range of 93 to 97 cents and a sales increase of between 15 and 17 percent.
Dennis Rosenberg, apparel analyst at Credit Suisse First Boston, said in a research note: “We view the results constructively. Most of Liz’s businesses recovered and have performed better than the market in the weeks following the attack. Inventories at both wholesale and retail are in good shape.”
The analyst pointed out that Claiborne’s relative strength at retail has limited the company’s markdown exposure. While the firm’s management is planning 2002 sales very conservatively, due to economic uncertainty, Rosenberg noted that there could be “potential upside if the economy recovers in the second half [of 2002].”
In the nine months, net income was up 3.8 percent, to $150.6 million, or $2.87 a diluted share, from $145 million, or $2.67, in the year-ago period. Sales were up 9 percent, to $2.6 billion from $2.4 billion.
Shares of Claiborne closed Thursday at $43.10, down 25 cents, in trading on the New York Stock Exchange.

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