Liz Claiborne Guides Lower

The shares are hit as the company cites a 'challenging' environment.
By Nat Worden ,

Liz Claiborne

(LIZ)

reported fourth quarter earnings Wednesday that were in line with Wall Street's expectations, but its guidance for the first quarter came in below estimates.

The shares fell $1.55, or 3.6%, to $42.16 midday Wednesday.

The fashion designer said it earned $83 million for the quarter, or 75 cents a share, up from $73 million, or 66 cents a share, for the year-ago period. Adjusted to exclude a gain from the sale of stock in Kenneth Cole Productions, the company said its earnings came to 74 cents a share.

Looking ahead, the company expects to report first-quarter earnings in a range of 63 to 66 cents a share, lower than the 69 cents a share expected by Wall Street. For 2005, it predicted earnings of $2.96 to $3.02 a share, compared with the $2.85 a share it logged for 2004. Excluding an expected charge related to an accounting change, it said 2005 results would come in between $3.07 and $3.13 a share, while analysts, on average, were expecting earnings of $3.13 a share.

"The retail climate is currently challenging, and we will continue to plan our businesses conservatively, focusing on solid execution and disciplined inventory management," said the company's chairman and chief executive, Paul Charron, in a statement.

Sales in the fourth quarter rose 16% to $1.198 billion, boosted by favorable currency exchange rates.

Liz Claiborne owns a portfolio of fashion brands, such as Juicy Couture, DKNY Jeans and Lucky Brand. Its shares were recently down $1.08, or 2.5%, to $42.63.

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