Clothing company Liz Claiborne on Tuesday posted a sharply lower quarterly profit that missed analysts' estimates and cut its full-year outlook as it sells some underperforming brands.
The company, whose labels include Juicy Couture, Lucky Brand Jeans, Ellen Tracy and Dana Buchman as well as its namesake sportswear line, said third-quarter net income fell to $33.1 million, or 33 cents per share, from $95.2 million, or 93 cents per share, a year earlier.
Excluding restructuring expenses, a loss from the sale of some brands, and an impairment charge, earnings were 63 cents per share, missing the analysts' average forecast of 67 cents, according to Reuters Estimates.
"While third-quarter 2007 results are tough to look at, particularly compared to last year, they are consistent with what we forecasted back in May," Chief Executive William McComb said in a statement.
Liz Claiborne , like rival Jones Apparel Group , has struggled due to a squeeze on moderate apparel lines, falling demand for traditional upscale brands and lower sales from consolidating department stores that increasingly promote their own private labels.
In July, McComb announced a restructuring that included a plan to sell 16 wholesale brands and cut up to 800 jobs.
The company said Tuesday that the turnaround plan was on track, and even ahead of its cost reduction targets for 2008, with $130 million implemented or well under way.
The company also said it was ahead of schedule on divesting or exiting the 16 brands.
Last month the company said the U.S. arm of Hong Kong-based sourcing and trading company Li & Fung had agreed to buy four brands.
Liz Claiborne's third-quarter net sales fell 3.9 percent to $1.26 billion, hurt by declines in brands sold by retail partners.
"While our partnered brand segment continues to challenge the overall performance picture," McComb said, "we are near completion on detailed merchandising, product design and partnering initiatives to address the core Liz Claiborne brand specifically."
The company lowered its full-year outlook, citing the impact of its brands under strategic review. It now expects adjusted earnings of $1.70 to $1.80 per share, with net sales falling at a low-single-digit percentage rate.
Analysts on average had been expecting profit of $1.95 per share, following the company's prior forecast of $1.90 to $2 on net sales projected at unchanged to down in the low single digits.