The Warnaco Group, Inc. Earnings: Revenue Strengthens Again by Double-Digits

The Warnaco Group, Inc. (NYSE:WRC) reported its results for the second quarter. Warnaco Group, Inc. designs, sources, markets, licenses and distributes a line of intimate apparel, sportswear and swimwear worldwide.

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The Warnaco Group Earnings Cheat Sheet for the Second Quarter

Results: Net income for The Warnaco Group, Inc. rose to $45.5 million ($1.01 per share) vs. $29.9 million (65 cents per share) in the same quarter a year earlier. This marks a rise of 52% from the year earlier quarter.

Revenue: Rose 13.9% to $591.4 million from the year earlier quarter.

Actual vs. Wall St. Expectations: WRC reported adjusted net income of 82 cents per share. By that measure, the company beat the mean estimate of 80 cents per share. Analysts were expecting revenue of $581 million.

Quoting Management: “We are pleased to report another solid quarter. Our second quarter results reflect the success of our growth strategies and the benefits of our global and diverse operating model,” said Joe Gromek, Warnaco’s President and CEO. “We continued to invest in our key growth initiatives, namely maximizing our Calvin Klein business, broadening our international footprint and expanding our direct to consumer business, which produced powerful topline results and delivered a 15% increase in adjusted income per share from continuing operations.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 14.4%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 17% from the year earlier quarter.

From the first quarter, the company’s current liabilities fell to $384.3 million from $540.5 million.

Gross margin shrank 0.6 percentage point to 43.7%. The contraction appeared to be driven by increased costs, which rose 15% from the year earlier quarter while revenue rose 13.9%.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of $1.10 versus a mean estimate of net income of $1.27 per share.

The increase in profit last quarter comes after net income fell in the previous quarter. In the first quarter, net income declined 8.2% to $44 million.

Competitors to Watch: Polo Ralph Lauren Corp. (NYSE:RL), Hanesbrands Inc. (NYSE:HBI), Phillips-Van Heusen Corp. (NYSE:PVH), Wacoal Hldgs. Corp. (NASDAQ:WACLY), Sears Holdings Corporation (NASDAQ:SHLD), Saks Incorporated (NYSE:SKS), Macy’s, Inc. (NYSE:M), Kohl’s Corporation (NYSE:KSS), Dillard’s, Inc. (NYSE:DDS), Nordstrom, Inc. (NYSE:JWN), Overstock.com, Inc. (NASDAQ:OSTK), Wal-Mart Stores, Inc. (NYSE:WMT), The TJX Companies (NYSE:TJX), Ross Stores (NASDAQ:ROST) and Target Corporation (NYSE:TGT).

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(Source: Xignite Financials)

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