“Looking forward, our reported 3Q results support our outlook for the balance of the year. As was announced last week, we entered into a merger agreement with PVH Corp. and look forward to the opportunities the transaction with PVH brings to our business. In the meantime, we intend to continue to operate the business effectively for the next several months as we work collaboratively with PVH to ensure a smooth integration,” concluded McCluskey.
Fiscal 2012 Outlook
For fiscal 2012, based on recent foreign currency exchange rates, the Company continues to anticipate:
- Net revenues, on a reported basis, will be down 2% to flat compared to fiscal 2011; and
- Adjusted, non-GAAP, diluted income per share from continuing operations (excluding restructuring expense, pension expense the Lejaby impairment charge, and acquisition costs relating to the previously announced transaction with PVH Corp.) in the range of $4.00 - $4.15.
Schedule 7 of the accompanying tables provides a reconciliation of anticipated diluted income per share from continuing operations, on a GAAP basis of $2.97- $3.00 per diluted share (assuming minimal pension expense/income), to the adjusted, non-GAAP fiscal 2012 outlook above.
Third Quarter Highlights
Net revenues fell 5%, compared to the prior year period, to $611.5 million and were flat in constant currency. An increase in Swimwear Group net revenues, fueled by continued strength from
, was offset by declines in Sportswear and Intimate Apparel net revenues. Challenging macro-economic conditions and the unfavorable effects of fluctuations in currency exchange rates adversely affected the Company’s net revenues.
Gross profit decreased 5% compared to the prior year quarter, to $267.0 million, while gross margin increased 30 basis points to 44% of net revenues. A favorable product mix, moderation of product costs and efficient execution contributed to the improvement in gross margin.