Fifth & Pacific reports 6.5 percent drop in Q2 net sales

Fifth & Pacific announced its earnings for the second

quarter of 2012. For the second quarter of 2012 on a GAAP basis, loss from continuing operations was 50 million dollars (Rs 277 crores), or 0.46 dollars (Rs 25.4) per share, compared to a loss from continuing operations of 54 million dollars (Rs 299 crores), or 0.57 dollars (Rs 31.5) per share, for the second quarter of 2011.

Adjusted EBITDA for the second quarter of 2012 was 16 million dollars (Rs 86 crore), while comparable adjusted EBITDA was 7 million dollars (Rs 38 crore) for the second quarter of 2011 (excluding unrealized foreign currency gains (losses) of 2 million dollars (Rs 11 crore) in the second quarter of 2012 and 6 million dollars (Rs 33 crore) in the second quarter of 2011).

Net sales for the second quarter of 2012 were 337 million dollars (Rs 1867 crores), a decrease of 23 million dollars (Rs 127 crores), or 6.5 percent, from the comparable 2011 period. Net sales increased 39 million dollars (Rs 216 crores), or 13 percent on a comparable basis from the 2011 period, excluding the 62 million dollars (Rs 343 crores) decline in net sales associated with brands that have been sold or exited but not accounted for as discontinued operations.

For the first half of 2012, the company recorded a loss from continuing operations of 101 million dollars (Rs 559 crores), or 0.96 dollars (Rs 53) per share, compared to a loss from continuing operations for the first half of 2011 of 107 million dollars (Rs 592 crores), or 1.13 dollars (Rs 62.6) per share.

Net sales for the first half of 2012 were 654 million dollars (Rs 3623 crores), a decrease of 37 million dollars (Rs 205 crores), or 5.3 per cent, from the comparable 2011 period. Net sales increased 75 million dollars (Rs 415 crores), or 13.1 per cent on a comparable basis from the 2011 period, excluding the 112 million dollars (Rs 620 crores) decline in net sales associated with brands that have been sold or exited but not accounted for as discontinued operations. Cash flow from continuing operating activities for the last twelve months was 81 million dollars (Rs 448 crores).

The adjusted results for the second quarter and first half of 2012 and 2011, as well as forward-looking targets, exclude the impact of expenses incurred in connection with the company's streamlining initiatives and brand-exiting activities, (losses) gains on extinguishment of debt and interest expense charges related to a multi-employer pension withdrawal liability.

Debt outstanding decreased to 503 million dollars (Rs 2,787 crores) compared to 769 million dollars (Rs 4,261 crores) in the second quarter of 2011. The company ended the first half of 2012 with 174 million dollars (Rs 964 crores) in cash and marketable securities, compared to 27 million dollars (Rs 149 crores) at the end of the first half of 2011. Company ended the quarter with 79 specialty retail stores, 52 outlet stores and 5 concessions, reflecting the net addition over the last 12 months of 3 outlet stores.

Headquartered in New York, Fifth & Pacific Companies designs and markets a portfolio of retail-based, premium, global lifestyle brands including Juicy Couture, Kate Spade, and Lucky Brand.