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| Calvin Klein Jeans revenue growth remains strong at Warnaco | | August 08, 2008 (USA) |  |
The Warnaco Group Inc reported results for the second quarter ended July 5, 2008.
For the second quarter on a GAAP basis:
• Net revenues rose 22% compared to the prior year quarter
• Gross margin increased 290 basis points to 45% of net revenues
• Operating margin increased 290 basis points to 10% of net revenues
• Income from continuing operations increased 23% to $0.57 per diluted share
For the second quarter on an adjusted basis (non-GAAP) (excluding certain tax items, restructuring expenses and pension income/expense):
• Operating margin increased 330 basis points to 11% of net revenues
• Income from continuing operations increased 56% to $0.71 per diluted share
The accompanying tables provide a reconciliation of actual results to the as adjusted results.
The Company believes it is valuable for users of the Company's financial statements to be made aware of the as 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.
"We are pleased to report another strong quarter for Warnaco," stated Joe Gromek, Warnaco's President and Chief Executive Officer. "Our second quarter results included broad based strength with all operating segments and geographies recording increased revenue and profitability.
Our key expansion initiatives, including international, direct-to-consumer and our Calvin Klein businesses, continued to fuel our growth. During the quarter, international revenues accounted for 50% of the Company's total, led by 51% growth in Europe. With powerful brands and an integrated global platform, we are excited about our opportunities both in the near and long term."
Mr. Gromek concluded, "While we are mindful of macro economic challenges, we believe our strategies will continue to produce positive results and underscores our decision to again increase guidance. Longer term, we see ample opportunity for organic growth as we continue to execute our strategic plan."
Fiscal 2008 Outlook:
Based on a strong first half performance, for fiscal 2008, the Company now expects net revenues to grow 13% - 15% over comparable fiscal 2007 levels and, on an adjusted basis (excluding restructuring expense and a non-recurring repatriation tax charge, and assuming minimal pension income/expense), diluted earnings per share from continuing operations in the range of $2.80 - $2.90.
The accompanying tables provide a reconciliation of expected diluted earnings per share from continuing operations on a GAAP basis ($1.70 - $1.76 per diluted share (assuming minimal pension income/expense) to the adjusted fiscal 2008 outlook above.
Second Quarter Highlights:
Total Company:
Net revenues rose 22% to $503.8 million compared to $412.5 million in the prior year period and gross margin increased to 45% compared to 42% in the prior year quarter. Operating income was $48.9 million, or 10% of net revenues, compared to $28.2 million, or 7% of net revenues, in the second quarter of fiscal 2007.
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