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'We are off to a strong start to the fourth quarter'- Warnaco Chief
09
Nov '09
The Warnaco Group, Inc. reported results for the third quarter ended October 3, 2009.

For the third quarter:

• Net revenues were $520.9 million, down 5% from the prior year quarter.
• Net revenues, on a constant currency basis, fell less than 1% compared to the prior year quarter.
• Gross margin decreased 260 basis points to 44% of net revenues.
• Selling, general & administrative (SG&A) expense, as a percent of net revenues, declined 550 basis points to 32%.
• Operating income was $60.3 million, or 12% of net revenues, compared to $48.0 million, or 9% of net revenues, in the prior year quarter.
• Income per diluted share from continuing operations was $0.66 compared to $0.62 in the prior year quarter, and the Company's reported tax rate was 40% compared to 31% in the prior year quarter.
• Adjusted, non-GAAP income per diluted share from continuing operations (as detailed in the accompanying tables) was $0.75 compared to $0.72 for the prior year quarter.
• GAAP and non-GAAP income per diluted share from continuing operations were negatively affected by a $3.6 million charge, or $0.05 per diluted share, associated with inventory write-downs related to racing swimwear that has been banned from use in competition.
• Net inventories were down 11% and cash and cash equivalents were up $100 million on a year-over-year basis.

The accompanying tables provide a reconciliation of actual results to the as adjusted results.

“Our strong third quarter results, in the midst of a challenging environment, reflect the continuing positive contribution of our long-term growth initiatives,” stated Joe Gromek, Warnaco's President and Chief Executive Officer. “During the quarter, our global expansion of Calvin Klein® continued as total international revenues rose 6% in constant currency over the prior year quarter, accounting for 61% of our total revenues. Also, our direct-to-consumer initiative continued to advance as we opened 40 new points of distribution and remain on track to grow square footage by over 20%, or an additional 120,000 square feet, this year. Our growth at wholesale and retail, coupled with expense and inventory management across all channels, contributed to a 280 basis point increase in operating margin and adjusted income per share from continuing operations that surpassed the prior year quarter.”

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Warnaco Group Inc

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