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Warnaco reports Q2 losses but says outlook positive

Warnaco Group has reported an 8% fall in net revenues in the three months to July 4 but said that full-year sales will come in ahead of expectations.

The US-based group, which manufactures brands including Calvin Klein underwear, Speedo swimwear and Olga lingerie, said the drop was due to currency fluctuations and that the fall was only 0.5% when calculated on a constant currency basis.

Operating income was $40.7m (£24.8m), compared with $48.9m (£29.8m) in the same quarter 2008.

Lingerie was the best-performing in the group’s three sectors, with net revenues down 8% but up 1% on a constant currency basis. Sportswear dropped 10% and swimwear 9%.

The company has adjusted its fiscal 2009 outlook to predict a net revenue loss of 7-9% instead of the previous guidance of 9-12% decline.

Chief executive Joseph Gromek said: “We are quite pleased with our performance in the second quarter. The ongoing success of our strategies to grow our Calvin Klein businesses globally, increase our international presence, expand our direct-to-consumer channel led to a solid quarter for Warnaco.”

He added: “We will continue to realise the benefits of our $70 million (£42.3m) in cost reductions through 2009 and future periods.”

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