SG&A expense decreased 7% compared to the prior year quarter, to $197.8 million. As a percent of net revenue, SG&A declined 60 basis points to 32%, benefiting from disciplined expense control as well as the effects of fluctuations in currency exchange rates.
Operating income was $66.7 million, or 11% of net revenues, compared to $64.8 million, or 10% of net revenues, in the prior year quarter.
Income from continuing operations was $41.1 million, or $0.98 per diluted share, compared to $48.8 million, or $1.13 per diluted share, in the prior year quarter. Income from continuing operations for the third quarter of fiscal 2011 includes a tax benefit of approximately $8.6 million, primarily associated with a reduction in the reserve for uncertain tax positions in certain foreign jurisdictions.
On an adjusted, non-GAAP basis (excluding restructuring expenses, pension income, tax related items and for the current quarter, acquisition costs relating to the previously announced transaction with PVH Corp.), income from continuing operations was $48.1 million, or $1.15 per diluted share, compared to $46.1 million, or $1.07 per diluted share, in the prior year period.
The effective tax rate in the quarter was 35% compared to 18% in the prior year quarter. The prior year quarter benefited from the $8.6 million tax benefit described above. On an adjusted, non-GAAP basis, the effective tax rate in the quarter was 32.7%; the prior year quarter’s effective tax rate (excluding the $8.6 million tax benefit) was approximately 31%.
The effect of fluctuations in foreign currency exchange rates for the quarter resulted in a decrease in net revenues, gross profit and SG&A by $30.7 million, $13.4 million and $13.2 million, respectively, compared to the prior year quarter and had no material impact on income from continuing operations. An additional discussion regarding the effects of fluctuations in foreign currency exchange rates on operating results can be found in the Company’s Form 10-Q, for the quarter ended September 29, 2012, which is being filed with the Securities and Exchange Commission.