The Warnaco Group, Inc. today reported results for the third quarter ended October 4, 2008.
For the third quarter on a GAAP basis:
-Net revenues rose 16% compared to the prior year quarter
- Gross margin increased 520 basis points to 47% of net revenues
-Operating margin increased 90 basis points to 9% of net revenues
-Income from continuing operations increased 77% to $0.62 per diluted share
For the third quarter on an adjusted basis (non-GAAP) (excluding certain tax items, restructuring expenses, certain other items, and pension income/expense):
-Gross margin increased 380 basis points to 47% of net revenues
-Operating margin decreased 80 basis points to 10% of net revenues
-Income from continuing operations increased 10% to $0.74 per diluted share
For both GAAP and adjusted third quarter results, the impact of foreign currency exchange rates:
-Increased third quarter 2008 net revenues and gross margin by approximately $7.7 million and $2.4 million, respectively, compared to the third quarter of fiscal 2007; and
-Decreased operating income by $12.0 million, due to a $15.3 million increase in SG&A expense primarily related to the mark to market of U.S. dollar denominated trade liabilities in certain of the Company's foreign subsidiaries.
-Increased other income by $3.4 million, related primarily to net gains associated with the hedging of certain U.S. dollar denominated inventory purchased by certain of the Company's European subsidiaries.
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