The Warnaco Group, Inc. (NYSE: WRC) today reported results for the third quarter ended September 29, 2012.
Highlights for the third quarter:
- Net revenues declined 5%, to $611.5 million, compared to the prior year quarter
- Net revenues, in constant currency, were flat compared to the prior year quarter
- Income per diluted share from continuing operations was $0.98 compared to $1.13 in the prior year quarter
- Income per diluted share from continuing operations on an adjusted, non-GAAP, basis was $1.15 compared to $1.07 in the prior year quarter (which excludes restructuring expenses, pension income, tax related items and for the current quarter, acquisition costs relating to the previously announced transaction with PVH Corp.)
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 third quarter results reflect the efforts of our team to efficiently operate our global business,” said Helen McCluskey, Warnaco’s President and Chief Executive Officer. “Gross margin expansion and expense discipline more than offset a decline in net revenues, driven primarily by the impact of currency and macro challenges. As a result, we delivered an increase in operating margin and adjusted non-GAAP income per share from continuing operations compared to the prior year quarter. “Internationally, net revenues in constant dollars were up slightly, led by growth in Latin America and Asia offsetting a slight decline in Europe. Our direct-to-consumer net revenues, in constant dollars, were up 5% and comparable store sales for the quarter were relatively flat. We saw some progress in Europe, where direct-to-consumer net revenues rose 6%, in constant dollars, including positive comparable store sales for the quarter.