Market Commentary and Intraday News
Warnaco 2Q profit falls, narrows outlook
287 days ago
(AP:NEW YORK) The Warnaco Group Inc. reported Monday that its second-quarter profit fell, but it beat Wall Street expectations as strong sales in Asia and Latin America offset weakness in Europe and the U.S. The clothing company also lowered its full-year earnings forecast.
Warnaco, which sells brands like Calvin Klein, Speedo, Warner's and Olga, is one of several consumer product companies that has shifted its focus to new markets in recent years as consumers in more developed markets slowed spending.
The company earned $9.6 million, or 23 cents per share, for the quarter that ended June 30. That is down from $45.5 million, or $1.01 per share, in the same quarter last year. After adjusting for restructuring charges and other special items, it earned 72 cents per share from continuing operations versus 82 cents per share last year.
Revenue fell 5 percent to $563.9 million as stronger swim sales offset declines in its sportswear and intimate apparel business.
Analysts polled by FactSet expected the company to earn 64 cents per share on revenue of $569.8 million.
Along with tough market conditions in the U.S. and Europe, the negative impact of foreign exchange and heavy promotions weighed on Warnaco's results. The company forecast earnings of $4 to $4.15 per share on an adjusted basis for the full year, versus a prior expectations of $4 to $4.25. Analysts forecast $4.01 per share.
Warnaco also expects revenue for the year to be flat to down 2 percent. Its previous forecast was flat to 2 percent growth. That implies revenue of about $2.08 billion to $2.51 billion for the year. Analysts forecast $2.49 billion.
Warnaco shares fell 62 cents to $41.94 in after-hours trading. They closed up $1.73 at $42.56.
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