Published February 29, 2012
Liz Claiborne (LIZ) swung to an in-line fourth-quarter profit on Wednesday thanks to the sale of a number of brands, but the retailer’s revenue shrank more than had been feared due to trouble at its Juicy brand.
Shares of the New York apparel maker slumped more than 4% in the wake of the mixed results.
Liz Claiborne, which is rebranding itself as Fifth & Pacific Cos., said it earned $229.2 million, or $1.91 a share, last quarter, compared with a loss of $30.1 million, or 28 cents a share, a year earlier.
However, the latest profits included a gain of $271 million tied to its sale of its Liz Claiborne brands, which include Monet and Dana Buchman. Excluding those gains, it earned 10 cents a share, down from 14 cents the year before, but matching the Street’s view.
Sales slipped 2.6% to $447.1 million, trailing consensus calls for $478 million. Gross margins fell to 53.8% from 51.5%.
Liz Claiborne was hurt by its Juicy Couture brand, which suffered an 8% drop in January same-store sales. By comparison, same-store sales at Lucky Brand soared 29% and surged 30% in kate spade.
Yet CEO William McComb said he is “optimistic” about the future of the Juicy brand, pointing to a preliminary 2% decline in same-store sales through February 25.
“Spring merchandise, delivered since early January, is actually generating strong season-to-date direct-to-consumer comparable sales increases compared to Spring merchandise in the year ago period. These sales trends and the associated gross margin expansion make us optimistic about the year ahead,” McComb said.
Looking ahead, Liz Claiborne backed its call for 2012 adjusted-EBITDA of $125 million to $140 million.