Warnaco Intimate Apparel revenues up 14% to $200.3 mn
The Warnaco Group Inc reported results for the third quarter ended October 4, 2008.
For the third quarter on a GAAP basis: 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.
"Our third quarter results reflect the continuing success of our long-term strategies to grow our Calvin Klein(R) businesses, increase our international presence and expand our direct-to-consumer initiative," stated Joe Gromek, Warnaco's President and Chief Executive Officer. "Our ability to achieve this positive performance despite the challenges facing economies around the globe is a testament to the power of the Calvin Klein brand, the superior execution by our team and the strong returns on our investments across our businesses."
"During the quarter," commented Mr. Gromek, "our Calvin Klein business continued to lead our growth with a 20% increase in revenue, driven primarily by the strength of our international businesses and success of our direct to consumer initiative. We have also seen continued improvement in the profitability of our heritage brands, most notably the 75% increase in operating income for our Chaps business."
"As we look ahead, we believe the retail environment will remain challenged. We expect the slowdown in the global economy and the recent strengthening of the U.S. dollar against several major currencies to have a negative near term impact on revenue growth and our bottom line. However, we will remain focused on our longer term goals of maximizing revenue and profitability to generate value for our shareholders by capitalizing on the strength of our brands and our channel diversification as well as emphasizing expense discipline," Gromek concluded.
Outlook - The Company believes that declines in foreign currency exchange rates relative to the dollar (and the tax effect thereof) as well as the current macroeconomic conditions will negatively affect fourth quarter and full year results.
Fourth quarter net revenues are expected to grow approximately 3%-5% in constant currency; and declines, as compared to the prior year quarter, in foreign currency exchange rates relative to the dollar, are expected to negatively impact net revenues by 8%-10%
- The Company now expects net revenues to grow 12% - 14% over comparable fiscal 2007 levels; and
- Due to both the negative impact from foreign currency exchange rates and the increase in the Company's tax rate which together equate to approximately $0.30 per diluted share, the Company now believes that, on an adjusted basis (excluding certain tax items, restructuring expense, certain other items and pension income/expense), diluted earnings per share from continuing operations will be in the range of $2.50 - $2.65.