Kellwood Company Lowers 2004 Guidance for the Fourth Quarter and Total Year Outlook for Sales in Fiscal Year 2005
January 24 2005 - 6:00PM
PR Newswire (US)
Kellwood Company Lowers 2004 Guidance for the Fourth Quarter and
Total Year Outlook for Sales in Fiscal Year 2005 ST. LOUIS, Jan. 24
/PRNewswire-FirstCall/ -- Kellwood Company announced today that it
expects sales in the fourth quarter to be approximately $585
million which is below the previous guidance of $600 million
provided on December 2, 2004. Last year the Company reported sales
of $521 million in the fourth quarter. Net earnings from continuing
operations in the fourth quarter are expected to be approximately
$6.5 million, or approximately $0.23 per diluted share, which is
below the December 2 guidance of $13.7 million or $0.48 per share,
according to Hal J. Upbin, chairman and chief executive officer.
Last year, the Company reported net earnings of $12.8 million and
earnings per diluted share of $0.46 from continuing operations in
the fourth quarter. "The late Fall and Holiday 2004 selling season
at retail was disappointing for our customers. As a result the
stores took aggressive Holiday markdowns and cut back on Spring
2005 open-to-buy. "Essentially all of the drop in sales and
earnings from our earlier forecast occurred in the women's
sportswear segment due to a combination of having to provide
significantly more end-of-year markdown assistance for some of our
brands, having to sell more units off price to liquidate seasonal
inventory, and lower than expected Spring 2005 orders," said Upbin.
The Company now expects sales for the year to be approximately
$2.55 billion, versus its earlier forecast of $2.57 billion. Last
year Kellwood reported sales of $2.35 billion. Net earnings for
fiscal year 2004 from continuing operations are now forecasted to
be in the range of $70.0 million, or approximately $2.50 per
diluted share. On December 2, 2004 Kellwood provided net earnings
guidance of $77.5 million, or $2.75 per diluted share. Last year
the Company reported net earnings of $72.6 million, or $2.68 per
diluted share from continuing operations. "Given the current
disappointing pace of consumer demand for moderately priced women's
sportswear we expect sales in fiscal year 2005 to be flat with the
level forecasted for fiscal year 2004. "During our third quarter
conference call, we discussed the major issues impacting the near
term performance of our women's sportswear business which were
expected to result in lower sales for Spring 2005. These issues
include: -- In Spring 2004, retailers enjoyed relatively strong
year-to-year same store sales increases. Thus, retailers will be
facing more challenging comparisons in the first half of this year
and have cut their 2005 open-to-buy versus prior year. -- The
consumer who shops moderate price points has not yet benefited from
the improving economy. This is the consumer who buys Kellwood's
core brands. Job uncertainty, higher energy and food costs and a
relatively high level of consumer debt have put a damper on
discretionary spending for apparel. If the economy and the rate of
job creation continue to improve, we are hopeful to see some uptick
in spending in the second half of the year. -- The dress market
continues to shrink. As a result, we are planning for lower sales
for Spring 2005. -- The environment is certainly a major factor.
However, we also have some work to do to further modernize the look
of some of our core moderate brands in response to the consumers'
rapidly evolving taste level, and some fine-tuning of the
merchandise assortments offered by some of our new marketing
initiatives," added Upbin. Sales in the first quarter of 2005 are
expected to be approximately $640 million, versus $686 million last
year. "We are very disappointed in our fourth quarter 2004 expected
results and in the outlook for the first quarter of 2005. We have
initiated and will continue to take the necessary steps to update
and modernize our product offerings. However, we do not expect to
see the benefits of these efforts until Fall 2005, which we begin
shipping in July, due to the seasonality and lead-time attendant
with the apparel business. "Finally, as with most new and
transforming endeavors, the economic benefits always cost more and
take longer to realize. This is true for the launching of some of
our new higher profile, and better price point brands. We are
committed to this strategy because we believe it will better
position the Company for more profitable growth beginning in the
second half of 2005 and beyond," said Upbin. Kellwood will provide
further guidance for the first quarter of 2005 and fiscal year
during our regularly scheduled conference call on March 11, 2005.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. This press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. The words "believe", "expect", "will",
"estimate", "project", "looks ahead", "forecast", "should",
"anticipate" and similar expressions may identify forward-looking
statements. These forward-looking statements represent the
Company's expectations concerning future events, are based on
various assumptions and are subject to a number of risks and
uncertainties. These risks include, without limitation: changes in
the retail environment; an economic downturn in the retail market,
including deflationary pressures; economic uncertainty due to the
elimination of quotas on Chinese imports; a decline in the demand
for the Company's products; the lack of customer acceptance of the
Company's new designs and/or product lines; the increasingly
competitive and consolidating retail environment; financial or
operational difficulties of customers or suppliers; disruptions to
transportation systems used by the Company or its suppliers;
continued satisfactory relationships with licensees and licensors
of trademarks and brands; ability to generate sufficient sales and
profitability related to licenses containing minimum royalty
payments; the economic impact of uncontrollable factors, such as
terrorism and war; the effect of economic conditions and trade,
legal social and economic risks (such as import, licensing and
trade restrictions); stable governments and business conditions in
the countries where the Company's products are manufactured; the
impact of acquisition activity and the ability to effectively
integrate acquired operations; and changes in the Company's
strategies and expectations. These risks are more fully described
in the Company's periodic filings with the SEC. Actual results
could differ materially from those expressed or implied in
forward-looking statements. The Company disclaims any obligation to
publicly update or revise any of its forward-looking statements.
Kellwood (NYSE:KWD) is a $2.5 billion marketer of apparel and
consumer soft goods. Kellwood specializes in branded as well as
private label products, and markets to all channels of distribution
with product specific to a particular channel. Kellwood brands
include Phat Farm(R), Baby Phat(R), Sag Harbor(R), Koret(R),
Jax(R), David Dart(R), Democracy(R), Dorby(TM), My Michelle(R),
Briggs New York(R), Northern Isles(R), David Brooks(R), Kelty(R),
and Sierra Designs(R). Calvin Klein(R), XOXO(R), Liz Claiborne(R)
Dresses and Suits, IZOD(R), Claiborne(R) Dress Shirts, Dockers(R),
David Meister(TM), Gerber(R), Slates(R), Bill Burns(R) and
Nautica(R) Dress Shirts are produced under licensing agreements.
For more information, visit http://www.kellwood.com/ . DATASOURCE:
Kellwood Company CONTACT: Financial, Roger D. Joseph, VP Treasurer
& IR, +1-314-576-3437, fax, +1-314-576-3325, , or W. Lee Capps
III, Executive VP Finance & CFO, +1-314-576-3486, fax,
+1-314-576-3439, , or Media, Donna Weaver, VP Corp. Comm.,
+1-212-329-8072, fax, +1-212-329-8073, , all of Kellwood Company
Web site: http://www.kellwood.com/
Copyright
Kellwood (NYSE:KWD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Kellwood (NYSE:KWD)
Historical Stock Chart
From Jul 2023 to Jul 2024