Kenneth Cole Productions Reports First Quarter Results
(Thomson Reuters ONE) -
-- Revenues Increase 7.3% vs. Last Year --
-- SG&A as a Percentage of Revenues Improves 130 basis points--
--Operating Results In-line With Expectations-
New York, New York, May 4, 2011 / PR Newswire - Kenneth Cole Productions, Inc.
(NYSE: KCP) today reported financial results for the first quarter ended March
31, 2011. As anticipated, the Company incurred certain one-time charges
associated with the acceleration of store closings. As a result, the Company
reported a net loss per fully-diluted share of ($0.94) in the first quarter
versus net income of $0.10 in the year-ago period. The year-over-year decline
in earnings was due to those store closing costs, severance and a reduction in
gross margin associated with markdowns and liquidation required to manage
inventories.
Net revenues in the first quarter grew 7.3% to $117.5 million versus $109.5
million in the first quarter last year. The increase was driven by stronger
Wholesale sales offset partially by a decline in Consumer Direct sales due to
the closing of net 11 stores year-over-year and a 2.7% comparable stores sales
decline.
Wholesale revenues increased by 19.3% to $74.5 million from $62.4 million in the
year ago period, primarily driven by an increase in men's footwear and Reaction
men's sportswear. Consumer Direct revenues declined by 10.2% to $33.2 million
versus the year-ago level of $37.0 million. Licensing revenues in the first
quarter declined to $9.8 million versus $10.1 million in the year-ago quarter.
This decline was primarily attributable to the discontinuation of licensing
royalties for Le Tigre. Otherwise licensing revenues were up 6.5%.
Gross margin declined 610 basis points to 35.5% versus 41.6% in the first
quarter last year. This anticipated decline was driven by increased promotional
and clearance activity associated primarily with the accelerated store closings,
rising costs and a shift in mix toward Wholesale sales.
SG&A, as a percentage of net revenues, excluding one-time charges in the first
quarter, improved 130 basis points to 39.4% from 40.7% in the year ago period.
The improvement was the result of an ongoing focus on cost efficiencies,
leverage in Wholesale, and a shift in sales mix towards Wholesale revenues
during the quarter.
The Company reported a net loss of $17.2 million for the quarter. The Company
noted that included in its results were $16.0 million in one-time charges,
related primarily to lease termination payments and severance. Total one-time
charges were partially offset by $3.5 million of deferred rent income associated
with the store closings, resulting in net charges of $12.5 million.
The Company's balance sheet remained strong at March 31, 2011 with $54 million
in cash and no long-term debt. The reduction in cash versus the prior year
level of $66 million was primarily a result of the lease termination payments in
the amount of $14.7 million and an increase in working capital requirements to
run the men's Reactionsportswear business. Total inventory was $42.4 million
versus the prior year's level of $35.2 million. This increase reflects the
additional inventory required to support the new Men'sReaction
sportswear business. In addition, despite progress in clearing units, total
inventory at the close of the first quarter remained elevated due to excess
inventory in retail. Notwithstanding the year-over-year increase, inventory was
current.
Kenneth Cole, Chairman and Interim Chief Executive Officer, commented, "While
we're obviously not pleased with these results we are dedicated to improving
every aspect of our business. While it's been necessary to focus on reducing
costs, streamlining, and on efficiency building the past few years, we are now
also focused on repositioning our business for sustainable growth across all
sectors. We also intend to reclaim the leadership position of the brand, not
just its social voice, but also its fashion and its product positioning."
Second Quarter Guidance
The Company expects to report second quarter earnings per share on a GAAP basis
of $0.02 - $0.04 on revenues of $105 to $110 million. While the Company expects
to remain in a clearance and liquidation mode in the second quarter, it expects
retail inventories to return to more appropriate levels by the end of the
quarter.
About Kenneth Cole Productions, Inc.
Kenneth Cole Productions, Inc. designs, sources, and markets a broad range of
footwear, handbags, apparel and accessories under the brand names Kenneth Cole
New York; Kenneth Cole Reaction; Unlisted; and Le Tigre, as well as footwear
under the proprietary trademark Gentle Souls. The Company has also granted a
wide variety of third party licenses for the production of men's, women's and
children's apparel as well as fragrances, watches, jewelry, eyewear, and several
other accessory categories. The Company's products are distributed through
department stores, better specialty stores, company-owned retail stores and its
e-commerce website. Further information can be found at
http://www.kennethcole.com/.
Forward Looking Statement Disclosure
The statements contained in this release, which are not historical facts, may be
deemed to constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Actual future results might
differ materially from those projected in such statements due to a number of
risks and uncertainties, including but not limited to, demand and competition
for the Company's products, the ability to enter into new product license
agreements or to renew or replace existing product licensee agreements, changes
in consumer preferences or fashion trends, delays in anticipated store openings,
and changes in the Company's relationships with retailers, licensees, vendors
and other resources. The forward looking statements contained herein are also
subject to other risks and uncertainties that are described in the Company's
reports and registration statements filed with the Securities and Exchange
Commission.
Company Contact:
David Edelman
Chief Financial Officer
Kenneth Cole Productions, Inc.
(212) 265-1500
Investor Relations Contact:
James R. Palczynski
Principal
Integrated Corporate Relations, Inc.
(203) 682-8229
Kenneth Cole Productions, Inc.
(In thousands, except Quarter Ended
per share & outstanding share amounts) (Unaudited)
03/31/11 03/31/10
Net sales $107,696 $99,393
Royalty revenue 9,777 10,119
------------ ------------
Net revenues $117,473 $109,512
Gross profit 41,671 45,550
Selling, gen'l & administrative expenses 46,305 44,580
Store closing & severance costs 12,482 --
------------ ------------
Total operating expense 58,787 44,580
Operating (loss)/income (17,116) 970
Interest & other income, net 47 967
Impairment of investments -- (20)
------------ ------------
(Loss)/before income taxes (17,069) 1,917
Provision for income taxes 133 85
------------ ------------
Net (loss)/income $(17,202) $1,832
Net (loss)/income per share: Basic $(0.94) $0.10
Net (loss)/income per share: Diluted $(0.94) $0.10
Average shares outstanding: Basic 18,239,000 18,092,000
Average shares outstanding: Diluted 18,239,000 18,484,000
Balance Sheet Data: 03/31/11 03/31/10
Cash & Cash Equivalents $ 54,286 $ 66,302
Accounts Receivable, net 61,654 43,610
Inventory 42,354 35,246
Total Assets 264,031 257,915
Working Capital 82,300 93,702
Accounts Payable & Accrued Expenses 65,538 40,964
Long-term Debt -- --
Total Shareholders' Equity 131,329 145,005
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Kenneth Cole Productions Inc. via Thomson Reuters ONE
[HUG#1512136]
Unternehmensinformation / Kurzprofil:
Datum: 04.05.2011 - 13:31 Uhr
Sprache: Deutsch
News-ID 54236
Anzahl Zeichen: 10626
contact information:
Town:
New York
Kategorie:
Business News
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