Photo By: WWD Staff
Juicy Couture's retail business is doing well, and added stores like the Beverly Hills flagship in 2007.
Launch Slideshow 1 image
Liz Claiborne Inc. chief executive officer William L. McComb's tale of two cities analogy continues to haunt him.
On Tuesday the company posted a first-quarter loss of $31 million, or 33 cents a diluted share, down from profits of $16.2 million in the first quarter of 2007. The bottom line was hurt by $44 million in restructuring costs.
The results exhibited the same story for the beleaguered vendor: direct brand sales grew 28 percent to $610 million, while partnered brand sales slid 14 percent to $501 million.
Facing what McComb called "a very light second quarter," the vendor lowered its 2008 adjusted earnings per share guidance to a range of $1.40 to $1.60 from a previous range of $1.50 to $1.70.
"Today, on an apples-to-apples basis, you saw an uptick, and we hit what analysts had been expecting," McComb told WWD. "But the second quarter is always a tough quarter, and this quarter will be tougher than normal."
Sales for the quarter increased about 5 percent to $1.12 billion from $1.07 billion.
Juicy Couture continued its growth streak with revenues increasing 58 percent to $140 million. Lucky Brand Jeans sales rose 21 percent to $110 million, Kate Spade sales climbed 44 percent to $28 million. Helped by the strength of the euro, Mexx revenues grew 20 percent to $342 million, though McComb said, "Mexx is underperforming the market overall" and "our execution has been poor."
But this time around, the tale of two cities story included a twist, as even the partnered brands developed haves and have-nots. The company pointed to Kensie, DKNY Jeans, Liz & Co. and Monet as growth leaders, and the Liz Claiborne brand, Claiborne men's and Kohl's Villager business as leading losses.
"Department stores are promoting heavily, conserving their open to buy and managing their inventories carefully," Dave McTague, executive vice president of partnered brands, said. "The fall of the partnered brands environment will continue to be tough, especially on our declining brands. We are carefully watching our exposure to order cancellations and markdowns....While we won't claim success in 2008, with careful execution, we are on course for significantly improved results in 2009."
On Tuesday the company posted a first-quarter loss of $31 million, or 33 cents a diluted share, down from profits of $16.2 million in the first quarter of 2007. The bottom line was hurt by $44 million in restructuring costs.
The results exhibited the same story for the beleaguered vendor: direct brand sales grew 28 percent to $610 million, while partnered brand sales slid 14 percent to $501 million.
Facing what McComb called "a very light second quarter," the vendor lowered its 2008 adjusted earnings per share guidance to a range of $1.40 to $1.60 from a previous range of $1.50 to $1.70.
"Today, on an apples-to-apples basis, you saw an uptick, and we hit what analysts had been expecting," McComb told WWD. "But the second quarter is always a tough quarter, and this quarter will be tougher than normal."
Sales for the quarter increased about 5 percent to $1.12 billion from $1.07 billion.
Juicy Couture continued its growth streak with revenues increasing 58 percent to $140 million. Lucky Brand Jeans sales rose 21 percent to $110 million, Kate Spade sales climbed 44 percent to $28 million. Helped by the strength of the euro, Mexx revenues grew 20 percent to $342 million, though McComb said, "Mexx is underperforming the market overall" and "our execution has been poor."
But this time around, the tale of two cities story included a twist, as even the partnered brands developed haves and have-nots. The company pointed to Kensie, DKNY Jeans, Liz & Co. and Monet as growth leaders, and the Liz Claiborne brand, Claiborne men's and Kohl's Villager business as leading losses.
"Department stores are promoting heavily, conserving their open to buy and managing their inventories carefully," Dave McTague, executive vice president of partnered brands, said. "The fall of the partnered brands environment will continue to be tough, especially on our declining brands. We are carefully watching our exposure to order cancellations and markdowns....While we won't claim success in 2008, with careful execution, we are on course for significantly improved results in 2009."
