In the fiscal third quarter ended on March 27, Stuart Weitzman managed to significantly cut its operating losses thanks to higher revenues and a reduction in expenses.
The brand, which is owned by the American group Tapestry, posted net sales of $57 million for the quarter compared to $51 million a year earlier, representing a 13 percent increase. The top line included the negative impact of the shift to the fiscal fourth quarter of North American wholesale sales.
Gross profit totaled $34 million on both a reported and an adjusted basis, resulting in a gross margin of 58.9 percent. A year earlier, the reported gross margin was 35.4 percent and the adjusted gross margin stood at 54.7 percent.
Selling, general and administrative (SG&A) expenses were slashed to $51 million on a reported basis from $549 million a year earlier. On an adjusted basis, SG&A expenses fell to $42 million from $63 million.
The operating loss dropped to $18 million from a loss of $531 million in the year-ago period. On an adjusted basis, the operating loss narrowed to $8 million from $35 million.
In the third quarter, Tapestry, which also owns the brands Coach and Kate Spade, posted a 19 percent increase in sales to $1.27 billion. The net income totaled $92 million, or $0.32 per diluted share, on a reported basis against a loss of $677 million a year earlier. On an adjusted basis, net income was $145 million, or $0.51 per diluted share, against a loss of $76 million.
Tapestry said that thanks to better-than-anticipated results year-to-date, full-year revenues could increase at a mid-teens rate compared to the prior year. Meanwhile, operating income and earnings per diluted share could increase compared with two years earlier.