Warnaco Group releases selected preliminary results
11 Jan '06
3 min read
New York based leading apparel company Warnaco Group Inc announced that it expects fiscal 2005 revenues to be approximately $1.5 billion, which represents a 5.7 percent increase over fiscal 2004.
The expected increase is less than the Company's targeted high single-digit sales growth, primarily due to
(i) a decrease of higher margin swimwear sales in excess of $15 million during the fourth quarter of fiscal 2005, the majority of which is expected to be shipped during the first quarter of fiscal 2006,
(ii) fewer than expected replenishment orders of intimate apparel, sportswear and denim product offerings and
(iii) the Company's inability to timely deliver product to meet demand for certain intimate apparel product offerings.
Primarily as a result of the above-mentioned loss of certain higher margin sales and, to a lesser extent, additional end-of-season markdowns, gross profit as a percentage of net revenues is expected to improve less than the targeted 100 basis points from the prior year.
Selling, general and administrative expenses as a percentage of net revenues are expected to be comparable or slightly above the prior year, and the Company expects that growth in operating income as a percentage of net revenues will be less than the targeted double digit improvement.
The Company notes that it expects that reported operating income will include pension expense of approximately $2 million in the full year fiscal 2005 results (substantially due to adjustments to actuarial assumptions) as compared to $6.2 million of pension income recorded in fiscal 2004.
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