Tuesday August 5 6:02 PM EDT
Designer to take charges for rest of 1997
NEW YORK, Aug 5 (Reuter) - Designer Holdings Ltd said Tuesday it expected to incur a series of charges in the second half of the year as it embarked on a plan to improve efficiency and adjust to a changing market.
The Calvin Klein licensee said in a statement it might incur one-time, after-tax charges ranging between an estimated $14 million and $18 million or $0.43 per share to $0.56 per share before the end of the year.
``We believe the competitive environment and market conditions make it imperative that we undertake these and related actions,'' the licensee said, adding that most of the charges would be non-cash.
The plan will include making transportation, distribution and production more efficient, introducing a new design concept at department stores, among other measures, it added.
The licensee reported an operating profit of $0.11 per share for the second quarter, a little lower than the $0.15 for the same period last year.
Designer also said competition was growing amid a product surplus in the marketplace.
As a result, it expected earnings in fiscal 1997 on an operating basis to be about 40 percent to 50 percent of current estimates of $0.90 per share to $0.95 per share, it said.
First Call's consensus among analysts forecast $0.91 per share for the year.
Designer said it had readjusted its expectations for 1998, explaining how it would likely see lower revenues.
But higher margins and tighter expense controls would result in a slightly higher earnings-per-share figure than 1997, it said.
``We are also continuing to hold discussions with various parties regarding possible new licenses or acquisitions which will also help deliver long term growth,'' the licensee said.
Designer went public in May 1996. |
