Warnaco, Inc. reported that its Swimwear Group posted a 1.8% improvement in revenues to $136.8 million from $134.4 million in the year-ago period.
Speedo revenues were up just 0.1% for the period to $82.5 million for the period, while Designer Swimwear increased 2.5% to $51.8 million. Owned-retail delivered about 2.5 million in revenues for the quarter, representing an 85.4% increase for the period. Speedo net revenues increased $0.9 million in Canada and $0.6 million in Mexico, offset by a $1.5 million decrease in the U.S. The decrease in the U.S. was said to be due primarily to a decrease in sales to membership clubs of approximately $5.0 million, partially offset by increases in sales of racing swimwear and sales to sporting goods stores.
Swimwear Group gross margins improved 30 basis points to 37.3% of sales in the first quarter. The increase in gross margin reflects an increase in Designer margins and an increase in Swimwear retail, partially offset by a decrease in Speedo margins, due primarily to higher off-price sales.
Swimwear Group operating income decreased 1.1% to $19.0 million, reflecting a 2.4% increase in Designer profits to $5.3 million and a 0.7% decrease in Speedo operating income to $12.8 million for the period, reflecting a $0.4 million decrease in gross profit, partially offset by a $0.3 million decrease in SG&A expenses. Swim Retail operating income was up 80% to $906,000.
