For the three months ended Dec. 28, the company said income rose 39.7 percent to $58 million, or 54 cents a diluted share, from $41.5 million, or 39 cents, in the year-ago quarter. Included in the quarter is a $7.1 million pretax restructuring charge connected with 22 Liz Claiborne retail closures.
Sales in the quarter jumped 12.1 percent to $993.9 million from $886.5 million, making it the company’s 28th consecutive quarter of sales growth.
Shares of Liz closed on Thursday at $27.51, up 1 cent in trading on the New York Stock Exchange on a day when the Dow Jones Industrial Average shed 85.64 points, or 1.1 percent, to end the day at 7,914.96.
Charron said during a conference call that the difficulties of the retail environment in the U.S. have been particularly challenging, with significant geopolitical issues showing no signs of resolution. He added that this is "not the sort of situation where one expects to muscle out."
He also told Wall Street that sourcing costs for 2003 continue to decline for the company as "investments in technology have positively impacted the ability to perform in a challenging environment."
During 2002, the company saw growth in its apparel business, costume jewelry business and its international operations.
"Dana Buchman, Sigrid Olsen and Ellen Tracy are our trio of brands at upper-price points that outperformed the better and moderate segments," the ceo noted.
In an unrelated move on Thursday, the company’s Lucky Brand subsidiary said it had signed a licensing agreement with Charles Komar & Sons for the production of men’s and women’s loungewear, sleepwear and underwear. Current plans are to have limited distribution of both collections in the stores this fall, with retail price points between $15 and $90. Lucky Brand sleepwear and underwear will also be carried in better department and specialty stores.
Ellen Schlossberg, analyst at William Blair & Co., said: "In light of the retailing environment, Liz Claiborne actually did very well." She noted that the company’s investment in the back end of the business for the last six years or so has positively impacted the company’s efficiencies. While Mexx and Sigrid Olsen could be potential hits for the firm, she doesn’t expect to see a roll-out of stores until the end of 2004 or 2005. Neither brand name has a lot of competitors and they aren’t overexposed in the retail channel, she observed. In addition, the experience from operating Mexx stores overseas and the Lucky Brand chain in the U.S. should help the company successfully operate and roll out Mexx and Sigrid Olsen stores in the U.S., she noted.