Kellwood Co. earnings were cut in half in the third quarter, due to heavy restructuring costs and the recent loss of licenses.
For the three months ended Oct. 28, earnings fell 50 percent, to $8.1 million, or 31 cents a diluted share, compared with $16.2 million, or 60 cents, in the same period a year ago.
Sales declined less than 1 percent, to $516.4 million from $520 million; reduced markdowns offset the loss of the Izod and Polo licenses, Kellwood said Friday.
The firm took a one-time after-tax hit of $12.1 million, or 47 cents per diluted share, for restructuring costs as part of an ongoing initiative.
Kellwood executives and analysts said they were pleased with net earnings from continuing operations, which declined 30 percent, to $5.5 million, or 21 cents per diluted share, from $7.9 million, or 29 cents, last year. Without restructuring costs, earnings from continuing operations increased.
“If you are going to really analyze the numbers, you have to look at apples to apples — you have to back out of the restructuring loss and out of Izod women’s sportswear and the Polo soft leather goods, which would actually make it up 19 [percent] or 20 percent,” said Brad A. Stephens, an analyst at Morgan Keegan & Co. Inc. “But then again, you can’t give them a free pass for losing the Izod and Polo licenses. Part of the challenge for them as a licensee is to develop these licenses and improve them.”
“Our fall enhanced retail results are not reflected in spring bookings, because the spring bookings were done before the last few months of good selling,” Robert C. Skinner Jr., chairman, president and chief executive officer, said in a conference call.
For the nine-month period, earnings swung into the black at $24.4 million, or 95 cents a diluted share, from a loss of $50.9 million, or $1.85 a share, a year earlier. Sales fell 3 percent, to $1.47 billion from $1.52 billion.
The firm revised its total fiscal year 2006 sales outlook, increasing it to $1.92 billion from its earlier guidance of $1.89 billion, which compares with sales in fiscal 2005 of $1.96 billion.