Warnaco Group's swimwear group saw revenues grow 5.4% to $46.2 million in the fourth quarter. In constant dollars, sales rose 7.6%. Speedo revenues were up 9.0% and operating margin was in the low teens reflecting improved inventory management.
The division's operating loss of $767,000 compared to a deficit of $16.0 million a year ago. Restructuring charges amounted to $1.8 million in the latest quarter versus $12.8 million a year earlier. Operating margin was up 740 basis points.
In the full year, sales were up 2.6% to $260.0 million and advanced 1.2% in constant dollars. Operating profits reached $11.5 million versus a $24.5 million loss a year ago. Restructuring charges totaled $3.9 million in the latest period versus $29.8 million in the prior year.
Helen McCluskey, Warnaco's Group president for Intimate Apparel and Swimwear, said on a conference call with analysts that operating income grew 24.0% for the year despite an incremental $3.0 million spend behind the Olympics. For the year, Speedo operating margins were 12.0%, an 80 basis point improvement and in line with the divisional goal of delivering a mid- to high-teens operating margin over time.
While Speedo revenue was flat for the year, “the exposure and success in the Olympics did drive increases in our competitive swim business ,with both team dealers and sporting goods stores posting revenue increases for the year,” said McCluskey.
For 2009, McCluskey said “very tight expense and inventory control” will be a primary focus. She added, “While we don't anticipate revenue growth in total in Speedo, we do expect to continue to grow our competitive swim business in 2009, which is essential to Speedo's long-term success. With emphasis and focus on operational excellence, we should continue to generate improved operating margins in the upcoming year.”
