The Warnaco Group Inc reported results for the first quarter ended March 31, 2007.
• Net revenues rose 20.7% over the prior year quarter • Gross margin increased 300 basis points to 41.0% of net revenues • Operating margin increased 350 basis points to 11.6% of net revenues • Net income increased by $0.52 to $0.82 per diluted share
"Our business is off to a very good start, with improved results in our key operating metrics," stated Joe Gromek, Warnaco's President and Chief Executive Officer.
"Total net revenues rose over 20% and on a comparable basis (excluding the January 2007 results of the international Calvin Klein business, which was acquired on January 31, 2006) were up over 13%, driven by gains in all three segments with notable strength from our worldwide Calvin Klein businesses."
"Our international revenues grew to over 48% of our total business and our direct-to-consumer revenues climbed four percentage points to 14%. Additionally, our gross margin increase was driven by sourcing and supply chain efficiencies as well as the mix of business generated from our higher margin international and direct-to-consumer businesses. This, along with disciplined cost control, contributed to a significant increase in operating profit."
Mr. Gromek concluded, "Looking forward, we remain optimistic. We are a global enterprise with a portfolio of powerful brands, serving multiple geographies and channels. We are strategicallydirecting our resources to support the growth of our businesses with the greatest long-term potential and have initiatives in place to address our underperforming businesses. We remain focused on enhancing shareholder value and look forward to continuing our positive momentum throughout the year and beyond."
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