Warnaco to refine its 2009 earnings outlook
The Warnaco Group Inc reported results for the first quarter ended April 4, 2009.
For the quarter:
• Net revenues were $538.4 million, down 5% from the prior year quarter
• Net revenues, on a constant currency basis, rose 6% compared to the prior year quarter
• Gross margin decreased 290 basis points from the prior year quarter to 42% of net revenues
• Selling, general & administrative (SG&A) expense, as a percent of net revenues, declined 510 basis points to 29%
• Operating income was $64.1 million, or 12% of net revenues, compared to $55.7 million, or 10% of net revenues in the prior year quarter
• Income per diluted share from continuing operations was $0.83 compared to $0.15 in the prior year quarter, and includes $0.17 and $0.79, respectively, of costs related to restructuring expenses, pension expense, certain tax related items and other items
• Adjusted, non-GAAP (excluding the items above) income per diluted share from continuing operations was $1.00 compared to $0.94 for the prior year quarter.
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.
Joe Gromek, Warnaco's President and Chief Executive Officer, commented, “We are very pleased with our first quarter results. Our business model, predicated on powerful brands, global diversification and disciplined execution, continues to demonstrate strength and resiliency in a challenging global environment. First quarter revenues, in constant currency, increased as we continued to capitalize on the growth opportunities for our Calvin Klein businesses. Earnings from continuing operations increased, driven by positive comparable store sales, continued direct-to-consumer growth and geographic expansion in our Calvin Klein business. Earnings also benefited from the actions we have taken to align our costs with today's economic realities and a more efficient business model.”
“As we look forward, we remain committed to our long-term strategies of growing the Calvin Klein business, expanding internationally and broadening our direct-to-consumer platform. We are continuing to invest in our retail initiative as we seek to accelerate revenue and market share growth. At the same time, we remain focused on controlling expenses and managing inventory and receivables. We are confident that the strength of the Calvin Klein brand and the powerful global platform we have developed to support our Calvin Klein business will enable us to gain market share and create long-term shareholder value,” concluded Mr. Gromek.
Fiscal 2009 Outlook
Based on our results to date, the Company is refining its 2009 earnings outlook. For fiscal 2009, on an adjusted basis (excluding restructuring expense, certain tax related items and assuming minimal pension expense):
• The Company now anticipates net revenues will decline 9% - 12%, primarily as a result of the impact of foreign currency exchange rates
• Based on recent currency exchange rates, the Company now expects diluted earnings per share from continuing operations in the range of $2.50 - $2.66
• The Company's prior guidance was for net revenue declines in the range of 9% - 14% and diluted earnings per share from continuing operations of $2.40 - $2.66 per diluted share.