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Liz Claiborne Q2 result out, posts 8.7 % growth
27 Jul '05
14 min read
The increased gross profit rate reflected the positive impact of lower sourcing costs and a changing mix within our portfolio, primarily reflecting an increased proportion of sales from our Mexx Europe, Canadian retail and domestic specialty retail businesses, which run at higher gross profit rates than the Company average as well as a decreased proportion of sales from our domestic Liz Claiborne apparel business, which runs at a lower gross profit rate than the Company average, partially offset by the additional liquidation of excess inventory.
Selling, General & Administrative Expenses
SG&A increased $87 million, or 11.0 percent, to $877 million in the six months of 2005 and as a percent of net sales increased to 37.9 percent in the six months of 2005 from 37.1 percent in 2004
The increased SG&A rate primarily reflected the impact of the increased proportion of expenses described above related to our domestic specialty retail and Mexx Europe businesses, which run at higher SG&A rates than the Company average, and reduced expense leverage resulting from the decreased proportion of expenses related to our domestic Liz Claiborne wholesale apparel business, which runs at a lower SG&A rate than the Company average, partially offset by Company-wide expense control initiatives.
Operating Income
Operating income in the six months of 2005 was $211 million, an increase of $11 million, or 5.3 percent, over 2004. Approximately $2 million of the increase in 2005 was due to the impact of foreign currency exchange rates, primarily as a result of the strengthening of the euro, in our international businesses. Operating income as a percent of net sales decreased to 9.1 percent in the six months of 2005 from 9.4 percent in 2004. The decrease in operating income as a percent of sales primarily resulted from the continued investment in the expansion of our domestic and international retail businesses as well as increased expenses associated with building a multi-brand platform in Europe, as discussed above.
Selling, General & Administrative Expenses
SG&A increased $87 million, or 11.0 percent, to $877 million in the six months of 2005 and as a percent of net sales increased to 37.9 percent in the six months of 2005 from 37.1 percent in 2004
The increased SG&A rate primarily reflected the impact of the increased proportion of expenses described above related to our domestic specialty retail and Mexx Europe businesses, which run at higher SG&A rates than the Company average, and reduced expense leverage resulting from the decreased proportion of expenses related to our domestic Liz Claiborne wholesale apparel business, which runs at a lower SG&A rate than the Company average, partially offset by Company-wide expense control initiatives.
Operating Income
Operating income in the six months of 2005 was $211 million, an increase of $11 million, or 5.3 percent, over 2004. Approximately $2 million of the increase in 2005 was due to the impact of foreign currency exchange rates, primarily as a result of the strengthening of the euro, in our international businesses. Operating income as a percent of net sales decreased to 9.1 percent in the six months of 2005 from 9.4 percent in 2004. The decrease in operating income as a percent of sales primarily resulted from the continued investment in the expansion of our domestic and international retail businesses as well as increased expenses associated with building a multi-brand platform in Europe, as discussed above.
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