Liz Claiborne (LIZ) Q1 2012 Earnings Call April 26, 2012 10:00 am ET Executives William L. McComb - Chief Executive Officer and Executive Director George M. Carrara - Chief Financial Officer, Chief Operating Officer and Executive Vice President Analysts Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division Jennifer Black Corinna L. Freedman - Wedbush Securities Inc., Research Division Kate McShane - Citigroup Inc, Research Division Casey Flavin Mary Ross Gilbert - Imperial Capital, LLC, Research Division Janet Kloppenburg Robert S. Drbul - Barclays Capital, Research Division James Andrew Chartier - Monness, Crespi, Hardt & Co., Inc., Research Division Presentation Operator
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William L. McCombGood morning and thank you for making time to listen to our report on our first quarter 2012 earnings results. We're presenting today with a slide deck as we usually do, that's available out on the website in the Investor Relations section. And joining me today is our new CFO and COO, George Carrara. George is off to a very strong start here now in week 4. Our company has given him a warm welcome and he's learning our business and already actively leading our corporate transformation work. Today's call will be brief. I'll offer some overall perspectives on the quarter. I'll review the director consumer comps, and George will summarize the financial highlights from our earnings report. We'll then field some questions. Overall, we're pleased with the sales and earnings performance during the quarter. Within the brand, we posted very strong growth at Lucky Brand. We posted a strong trend again at kate spade. And Juicy Couture shows positive responses again to new product and marketing, despite posting negative comps. The reported adjusted EBITDA of negative $1 million met our expectations and we remain on track to deliver the guided 2012 adjusted EBITDA range of $125 million to $140 million, excluding unrealized foreign currency gains and losses. We're highly focused now on rationalizing our corporate expenses while also investing for the efficiency that will deliver the most effective and lean corporate infrastructure possible. And finally, in terms of overall perspectives, as we've said a few times in response to press generated inquiries, we continue to have no plans today other than to run this business and deliver the growth and earnings expansion that we've been working hard to unlock over the past few years. We're bullish on our future, on our brands and on our people. So let's have a look at the first quarter. Turning here to Slide Page 3, you'll see January, February, March and first quarter total comps. We gave you a peek at February to date back on February 29, when we reported year end 2011 results. kate spade posted a total direct to consumer comps for the quarter of plus 38%. While February was in line with our guided comp range, March posted very strong results at plus 73%. Month to date in April, kate spade comps are up strong double digits again.
And as I said before, Lucky Brand is posting very strong sales growth. Total direct to consumer comps in February were up 20% and March registered up 18%, with a total quarter at plus 21%. April to date comps are posting right in line with our forecast and up against very high levels year ago.And at Juicy Couture, the quarterly total direct to consumer comp was down 4%, down 2 points in February and down 3 points in March. Let's flip to the next page to take a deeper look at each of the brands, starting with Juicy Couture. Here on Page 4, you can see the first quarter performance summary for Juicy Couture. Net sales across the channels and geographies were down 4%. Direct to consumer comps, as I said, were also down 4% for the quarter as well. Here's what we see going on at Juicy. Apparel is really working. In the first quarter, spring and summer season apparel posted a plus 15% total direct to consumer comp on inventory that was on average during the period down 24%. The new fashion items are selling very well, comprising the strongest, single category comp in the store. These are the advertised items and the ones that are signaling a new look for Juicy Couture. Read the rest of this transcript for free on seekingalpha.com