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18 Mar '10

5 min read

Total net revenue for the fourth quarter of fiscal 2010 increased 14.4% to $642.0 million from $561.1 million in the prior fourth quarter period. During the quarter, the Company's retail stores in North America generated revenue of $309.4 million, a 7.2% increase from $288.6 million in the prior-year quarter. Comparable store sales for the current fourth quarter increased 5.3% (2.0% in constant dollars) compared to the same period a year ago. The Company operated 432 retail stores in the United States and Canada at the end of the fourth quarter of fiscal 2010 versus 425 stores a year earlier.

The Company's wholesale segment, which includes its Asian operations, generated revenue of $84.7 million during the quarter, a 21.1% increase from $69.9 million in the prior-year quarter.

The Company's European segment generated revenue of $222.6 million during the quarter, an increase of 23.7% when compared to $179.9 million in the prior-year quarter.

The Company's licensing segment generated revenue of $25.4 million, a 12.3% increase from $22.6 million in the prior-year period.

Operating earnings for the fourth quarter of fiscal year 2010 increased 76.3% to $120.7 million (including a $7.8 million favorable currency translation benefit) from $68.5 million in the fourth quarter of the prior year. Operating earnings in the current period included a $4.3 million non-cash asset impairment charge, compared to a $22.3 million charge in the prior-year period. Operating margin in the fourth quarter increased 660 basis points to 18.8%, compared to the prior year's quarter. This operating margin improvement was driven by stronger product margins in all segments and lower asset impairment charges, partially offset by higher performance-based compensation expense, primarily due to the reversal of certain compensation accruals in the prior-year period.

The Company's net earnings were impacted by a higher effective tax rate in the current quarter. For the fourth quarter, the tax rate was 29.9%, compared to 22.9% in the prior year's quarter. The higher quarterly tax rate resulted from finalization of the annual effective tax rates in both years.

Excluding the non-cash impairment charges, adjusted operating earnings increased 37.7% to $125.0 million from $90.7 million in the fourth quarter of the prior year period. Adjusted operating margin increased 330 basis points to 19.5% from 16.2% in the prior year period.

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