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Strong growth in Core Intimates - Warnaco
11 May '10
5 min read
Fiscal 2010 Outlook
Based on our results to date and recent currency exchange rates, the Company is raising its 2010 earnings outlook. For fiscal 2010, on an adjusted basis (excluding restructuring expense, certain tax related items and other items and assuming minimal pension expense):
• The Company now anticipates net revenues will increase 8% - 10% compared to fiscal 2009
• The Company now expects adjusted diluted earnings per share from continuing operations in the range of $3.30 - $3.40
• The Company's prior guidance was for net revenue growth in the range of 5% - 7% compared to fiscal 2009 and diluted earnings per share from continuing operations in the range of $3.10 - $3.20 per diluted share.
First Quarter 2010 Highlights
Total Company
Net revenues rose 9% in the quarter, 4% on a constant dollar basis, to $588.2 million. Double digit growth in the Company's Calvin Klein businesses, expanded distribution in Chaps and strong growth in Core Intimates, driven by new product launches and higher level of replenishment, more than offset a decline in Swimwear net revenues.
Gross margin increased 350 basis points to 45% of net revenues, driven by lower product costs, strong sell through and higher margin associated with our direct to consumer expansion.SG&A expense increased $26.6 million to $185.0 million and SG&A as a percent of net revenues increased 200 basis points to 31% of net revenues. Growth in the Company's direct to consumer segment ($18.4 million), planned investments in marketing ($7.8 million) and accounting for equity plan expense ($6.0 million) contributed to the $26.6 million increase in SG&A expense.
Operating income increased 24% to $79.5 million compared to $ 64.3 million in the prior year quarter. Operating income for the first quarter of fiscal 2010 and 2009 was adversely affected by $0.9 million and $8.8 million, respectively, of restructuring charges, pension expense and other items.
The Company recorded income from continuing operations of $48.3 million, or $1.03 per diluted share, compared to $38.6 million, or $0.84 per diluted share, in the prior year period.
Income from continuing operations, on an adjusted non-GAAP basis (excluding costs related to restructuring expenses, pension expense, certain tax related items and other items), as detailed in the accompanying schedules, was $1.09 per diluted share compared to $0.97 per diluted share in the prior year period.
The impact of foreign currency exchange rates increased fiscal 2010 first quarter net revenues, gross profit, SG&A and operating profit by approximately $28 million, $16 million, $9 million and $7 million, respectively, and increased income from continuing operations by approximately $0.10 per diluted share.
Click here for more details.
Based on our results to date and recent currency exchange rates, the Company is raising its 2010 earnings outlook. For fiscal 2010, on an adjusted basis (excluding restructuring expense, certain tax related items and other items and assuming minimal pension expense):
• The Company now anticipates net revenues will increase 8% - 10% compared to fiscal 2009
• The Company now expects adjusted diluted earnings per share from continuing operations in the range of $3.30 - $3.40
• The Company's prior guidance was for net revenue growth in the range of 5% - 7% compared to fiscal 2009 and diluted earnings per share from continuing operations in the range of $3.10 - $3.20 per diluted share.
First Quarter 2010 Highlights
Total Company
Net revenues rose 9% in the quarter, 4% on a constant dollar basis, to $588.2 million. Double digit growth in the Company's Calvin Klein businesses, expanded distribution in Chaps and strong growth in Core Intimates, driven by new product launches and higher level of replenishment, more than offset a decline in Swimwear net revenues.
Gross margin increased 350 basis points to 45% of net revenues, driven by lower product costs, strong sell through and higher margin associated with our direct to consumer expansion.SG&A expense increased $26.6 million to $185.0 million and SG&A as a percent of net revenues increased 200 basis points to 31% of net revenues. Growth in the Company's direct to consumer segment ($18.4 million), planned investments in marketing ($7.8 million) and accounting for equity plan expense ($6.0 million) contributed to the $26.6 million increase in SG&A expense.
Operating income increased 24% to $79.5 million compared to $ 64.3 million in the prior year quarter. Operating income for the first quarter of fiscal 2010 and 2009 was adversely affected by $0.9 million and $8.8 million, respectively, of restructuring charges, pension expense and other items.
The Company recorded income from continuing operations of $48.3 million, or $1.03 per diluted share, compared to $38.6 million, or $0.84 per diluted share, in the prior year period.
Income from continuing operations, on an adjusted non-GAAP basis (excluding costs related to restructuring expenses, pension expense, certain tax related items and other items), as detailed in the accompanying schedules, was $1.09 per diluted share compared to $0.97 per diluted share in the prior year period.
The impact of foreign currency exchange rates increased fiscal 2010 first quarter net revenues, gross profit, SG&A and operating profit by approximately $28 million, $16 million, $9 million and $7 million, respectively, and increased income from continuing operations by approximately $0.10 per diluted share.
Click here for more details.
The Warnaco Group Inc
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