The third quarter is historically the smallest quarter of the year for the Warnaco Swimwear business, which includes the Speedo brand business, representing just 10% of the year’s revenues. Swimwear group revenues were down 6.9% for the quarter to $30.9 million versus $33.1 million in the year-ago period.

The group’s operating loss narrowed 3.3% to $9.7 million for the quarter versus $9.8 million in Q3 last year. Gross margin for the Swimwear group jumped 340 basis points to 27.1% of sales versus 23.7% last year.

The OP acquisition, which closed in mid August, only contributed about $657,000 in revenue for the period and had no real impact on the company’s operating profit, posting a loss of $360,000 for the period. Swimwear group sales would have decreased 8.8% excluding the OP deal.
Speedo sales declined 6.4% in the third quarter to $26.7 million from $28.6 million in prior year period.

The company said the decrease in Speedo net revenues “primarily reflects the elimination of a fleece program for a single customer” that was discontinued after the 2003 season, partially offset by an increase in sales of women’s swimwear to membership clubs. Nine-month YTD sales were up 2.3% to $196.8 million.

Speedo’s operating loss for the quarter improved nearly 40% in Q3 to $3.4 million versus a net loss of $5.6 million in the year-ago period. Speedo Activewear had a $317,000 loss in the period versus no activity last year.
Speedo bookings at quarter-end for the 2005 swim season were up 16% to $199 million.

The company said the Speedo footwear business posted about $27 million in revenues for the model year ended June 30, a 33% increases over the year-ago period.

The net decrease in Designer Swimwear sales volumes primarily related to the timing of certain sales to a significant customer. Designer Swimwear group bookings for the 2005 swim season were said to be up 16% to $97 million.

Total Warnaco Group sales rose 10.5% to $324.4 million from $293.7 million in Q3 last year, due in large part to a 20.9% increase in sales to $135.4 million from $112.0 million in Q3 2003. The Sportswear group fed the bottom line as well, as operating profit here more than doubled to $19.0 million versus $8.8 million LY.

WRNC posted $1.1 million, or three cents per diluted share, in net income for the period compared to a net loss of $7.2 million, or a loss of 13 cents per diluted share, in third quarter last year.


>>> Look for the OP business to make a real difference here in the Swimwear Group first half 2005…