NAUTICA NET UP IN QUARTER, DOWN IN YEAR
Byline: Thomas J. Ryan
NEW YORK — As it prepares to reenter the women’s sportswear field with a jeans line this fall, Nautica Enterprises reported earnings for the fourth quarter nudged up 4.3 percent, but were still down 21.4 percent for its year ended March 4.
Fourth-quarter earnings rose to $10.1 million, or 28 cents a share, from $9.7 million, or 25 cents, a year ago, in line with Wall Street estimates. Sales grew 18.6 percent to $158.1 million. The sales gains were broad-based, Nautica told analysts; only the NST athletics line declied.
For the year, earnings slid to $46.2 million, or $1.26, against $58.7 million, or $1.45, a year ago. Sales advanced 12.4 percent to $621.3 million from $552.7 million. Wholesale sales rose 12.9 percent to $483 million and outlet sales increased 11.3 percent to $138 million.
Harvey Sanders, chairman and chief executive, said in a statement that the past year was “a year of both transition and positioning for the future.” In the last year, Nautica worked to revitalize sales in its core sportswear and outerwear lines, launched Nautica men’s jeans and Nautica women’s sleepwear, and prepared for the fall launch of Nautica women’s jeans and the John Varvatos men’s contemporary designer collection.
“Overall sales grew as the sales from new product lines and new outlet stores offset the planned decline in core sportswear sales. The earnings were affected by the expenses for infrastructure and marketing to launch and support the new product lines,” said Sanders. “We look forward to a year of growth as we realize the benefits from our efforts of the past year.”
Nautica said the women’s jeans and Varvatos lines hade been well received by retailers. Women’s jeans will be launched in 175 to 200 department stores and 200 to 250 specialty doors.
Josie Esquivel, at Morgan Stanley Dean Witter, called the fourth quarter “decent,” in that the gross margin rate showed improvement — but much depends upon the ultimate success of Nautica’s numerous launches.
“They appear to be doing better, but it’s hard to put your hands around it,” she said.
On a conference call, Nautica officials warned that results in its first quarter ending in early May would remain soft, with earnings ranging between 8 and 12 cents a share against 12 cents a year ago, the shortfall blamed largely on launch costs. Wall Street’s consensus had been 13 cents a share.
Nautica told analysts earnings should rise in the next three quarters.
Backlog orders were running up between 12 and 15 percent, but Nautica did not say how much of that figure represented new launches.