The Warnaco Group, Inc. (NYSE: WRC) today reported results for the second quarter ended June 30, 2012.
For the second quarter:
- Net revenues decreased 5%, to $563.9 million, compared to the prior year quarter.
- Net revenues, in constant currency, were flat compared to the prior year quarter.
- The Company incurred a $12.0 million impairment charge pertaining to the note receivable related to its 2008 sale of Lejaby ® to Palmers Textil AG, referred to as the Lejaby impairment charge.
- Income per diluted share from continuing operations was $0.23, compared to $1.01 in the prior year quarter.
- Income per diluted share from continuing operations on an adjusted, non-GAAP basis was $0.72 compared to $0.82 in the prior year quarter (which excludes restructuring expense, pension expense, tax-related items and, for the current quarter, the Lejaby impairment charge).
The accompanying tables provide a reconciliation of actual results to the adjusted, non-GAAP results.
The Company believes it is valuable for users of the Company’s financial statements to be made aware of the 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 and to make operating and strategic decisions. In addition, the Company uses performance targets based, in part, on non-GAAP income from continuing operations and non-GAAP operating income as a component of the measurement of certain employee incentive compensation.“Our second quarter results were in line with our projections. As expected, a positive performance in Asia and Latin America during the quarter offset softness in Europe and the U.S. Despite a decline in comparable store sales, reflecting challenging macroeconomic conditions, our Calvin Klein direct-to-consumer business was up 6% in constant currency, further validating our core international and retail expansion strategies. Speedo had a great quarter reflecting the benefit of our Olympic initiatives as well as the kickoff of our segmentation strategy, which will drive future growth for the brand. In addition, we continued to exercise disciplined control over our expenses while continuing to invest in our direct-to-consumer expansion. We took further action in Europe, as we previously announced, to position the business for improved operating performance over time,” commented Helen McCluskey, Warnaco’s President and Chief Executive Officer. “We are making progress in reshaping our organization to reflect the consumer-centric vision I outlined earlier in the year. We are very excited about the caliber of talent we are attracting to our design and merchandising teams as we consolidate the group into New York. We are confident that we are taking the appropriate actions to ensure that these changes will have a significant benefit for the business over the long term.”