The Warnaco Group Inc. Earnings: Falls Short of Expectations

The Cheat Sheet

The Warnaco Group Inc. reported a lower net income in fourth quarter, missing analysts’ estimates. Warnaco Group designs, sources, markets, licenses and distributes a line of intimate apparel, sportswear and swimwear worldwide.

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The Warnaco Group Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for The Warnaco Group Inc. fell to a loss of $6.8 million (16 cents per share) vs. $19.2 million (42 cents per share) a year earlier. This is a decline of 64.6% from the year-earlier quarter.

Revenue: Rose 3.9% to $614.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Warnaco Group Inc. fell short of the mean analyst estimate of 98 cents per share. It fell short of the average revenue estimate of $627.6 million.

Quoting Management: “Fiscal 2011 was another successful year for Warnaco,” commented Helen McCluskey, the Company’s President and Chief Executive Officer. “We remained focused on our key strategic initiatives, growing our Calvin Klein businesses, expanding our international reach, building our direct-to-consumer platform and improving the profitability of our Heritage brands. Our net revenue results, 12% growth in Calvin Klein, 17% growth in international and a 28% increase in direct-to-consumer businesses, demonstrate the strength of our brands and our diversified global business model.”

Key Stats:

Revenue has increased for four quarters in a row. Revenue increased 8.1% to $645.1 million in the third quarter. The figure rose 13.9% in the second quarter from the year earlier and climbed 12.6% in the first quarter from the year-ago quarter.

The company reported a profit decrease last quarter, breaking a two-quarter streak of profit increases. Net income rose 7.5% in the third quarter and 52% in the second quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of $1.07.

From the past third quarter, the company’s current liabilities dropped to $47.5 million from $482.1 million.

Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the first quarter of the next fiscal year is $1.07 per share, dropping from $1.13 a month ago. For the fiscal year, the average estimate has moved down from $4.02 a share to $3.98 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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