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International net revenues up at NY-based Warnaco
09
Nov '11
The Warnaco Group Inc reported results for the third quarter ended October 1, 2011.

Highlights for the third quarter:
• Net revenues increased 8%, to $645.1 million, compared to the prior year quarter
• International net revenues increased 16% compared to the prior year quarter
• Direct to consumer net revenues increased 31%, including a 2% increase in comparable store sales, compared to the prior year quarter
• Income per diluted share from continuing operations was $1.13 compared to $0.90 in the prior year quarter
• Income per diluted share from continuing operations on an adjusted, non-GAAP, basis was $1.07 compared to $1.04 in the prior year quarter (both of which exclude restructuring expenses, pension expenses, tax related items and other items)
• The Company purchased approximately 2.5 million shares of its common stock for approximately $123.2 million pursuant to its share repurchase programs

The accompanying tables provide a reconciliation of actual results to the adjusted, non-GAAP, results.

The Company believes it is valuable for users of the Company's financial statements to be made aware of the adjusted financial information, as such measures are used by management to evaluate the operating performance of the Company's continuing businesses on a comparable basis and to make operating and strategic decisions.

In addition, the Company uses performance targets based, in part, on non-GAAP income from continuing operations and non-GAAP operating income as a component of the measurement of certain employee incentive compensation.

"Our globally diverse operating model enabled us to deliver another solid quarter of revenue growth and achieve significant progress toward our long-term expansion goals," said Joe Gromek, Warnaco's President and CEO. "Disciplined investment in our long-term growth strategies --maximizing our Calvin Klein businesses, expanding globally and growing our direct-to-consumer footprint --drove a 10% increase in our worldwide Calvin Klein net revenues, a 16% increase in our international net revenues and a 31% increase in our direct to consumer net revenues."

"Total Company net revenues grew 8% over the prior year quarter, led by powerful growth in Asia and Latin America, which more than offset an anticipated reduction in U.S. net revenues, primarily associated with the timing of shipments to certain value channels. Our direct-to-consumer growth was driven by increased square footage and positive comparable store sales. We ended the quarter with just over 1.0 million square feet of directly operated retail."

"We again reported strong operating results in Asia and Latin America," added Gromek. "And, despite difficult market conditions in parts of Europe and gross margin pressure in the U.S. market, we were able to maintain a double digit operating margin in the quarter."

"Our Calvin Klein brand continues to resonate well with consumers globally, and we see significant opportunities to capitalize on this powerful brand equity, especially in emerging markets. As we move through the fourth quarter, we believe we are well positioned to deliver strong operating results.

"Looking ahead to fiscal 2012, our direct-to-consumer and international initiatives, together with lower input costs and supply chain efficiencies, are expected to drive gross margin and operating margin expansion. Accordingly, we remain confident in our strategies, which we believe have us poised to generate sustained long-term growth and enhance shareholder value."

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Warnaco Group Inc

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