Warnaco 3Q Earnings Plunge 70 Percent

Third-quarter earnings dropped to $4.4 million, or 10 cents per share, from $14.6 million, or 31 cents per share, in the prior year. Excluding businesses expected to be discontinued in fiscal 2008 and restructuring expenses, adjusted earnings totaled $31.1 million, or 67 cents per share, compared with $27.6 million, or 59 cents per share, a year ago.

In September, Warnaco said it plans to exit its swimwear group's private label and designer swimwear brands, excluding Calvin Klein swimwear. The company is also exploring strategic alternatives for its Lejaby business, including a potential sale.

Quarterly revenue grew 13 percent to $474.8 million, from $419.6 million in the third quarter of 2006.

Analysts surveyed by Thomson Financial, who typically exclude one-time items and discontinued operations, forecast third-quarter earnings of 49 cents per share on revenue of $465.6 million.

Warnaco said gross margin was flat at about 40 percent of net revenue.

The company recorded gains in its sportswear and intimate apparel groups, but swimwear group revenue fell 12 percent to $35.2 million, as Speedo revenue was hurt by lower-than-expected membership club sales. The segment's operating loss widened to $29.6 million, which included $16.6 million of restructuring expense.

President and Chief Executive Joe Gromek said Warnaco's international revenue represented more than half of the company's total business for the first time, driven by strength in Europe and Asia.

Warnaco shares gained 53 cents in after-hours trading to $37.91, after falling 96 cents, or 2.5 percent, to $37.38 during the regular session. The stock has traded between $23.77 and $44.94 during the past 52 weeks.