The Warnaco Group's Swimwear Group, which includes Speedo as well as Calvin Klein swimwear, reported sales in the first quarter fell 8.4% to $87.9 million from $96.0 million in the year-ago qarter, primarily as a result of reduced sales to membership clubs in the quarter. In constant-currency rates, sales were off 10.1%. Excluding clubs, revenue was up 2% for the quarter.  Swimwear Group revenues increased $3.1 million in the international business but fell $11.2 million on the domestic side.

 

Speedo revenues declined 12.3% to $73.5 million in Q1 from $83.8 million in the year-ago period.  The decline in Speedo sales was attributed to a decrease in sales in membership clubs, specialty stores, sporting stores and discounters in the U.S., partially offset by an increase in U.S. department stores and Canadian chain and specialty stores.

 

Swimwear Group operating income declined 5.3% to $11.9 million from $12.5 million in Q1 last year but operating margins improved to 14% of sales from 13% of sales in Q1 last year. Restructuring charges amounted to $269,000 in the latest quarter versus $1.6 million in q1 2009. Excluding the restructuring charges, operating earnings were down 14% for the period.

 

Speedo operating income dipped 2.2% to $2.4 million in Q1 from $2.4 million in the prior-year period.

 

“The operational problems that we experienced in 2009 have been resolved, and we are shipping on time and at high fulfillment levels,” said Helen McCluskey, president of Warnaco Intimate Apparel.  “This has resulted in increased revenue and improved retail selling. We are pleased with our season-to-date retail sales performance in Speedo.

 

We are up double digits in sporting good stores and chains, and while a small part of our business, we have nearly doubled our department store retail sales due to the strength of our men's water shorts business.”

 

In Competitive Swim, Speedo's launch of the LZR Elite has replaced the LZR Racer, which was banned by FINA the international governing body of swimming, after breaking numerous world records. In recent swim meets, Speedo was worn by 75% to 80% of all participating athletes, Warnaco said.

 

“We continue to focus on increasing our profitability in the Swim Group and expect to end the year ahead of 2009's margin rate,” said McCluskey.