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Warnaco rises above retail gloom Thursday, 5th January 2012
Shares of Warnaco rose by more than 5 per cent yesterday and an analyst boosted the clothing maker’s rating, stating that its fourth-quarter margins could come in better than expected on less promotions.
Joseph Parkhill, analyst for Morgan Stanley, said that the company fell short of third-quarter gross margin estimates but was able to meet expectations thanks to cost cuts related to both sales and administration.
Parkhill also said that fewer promotions could help margins in the fourth quarter and he raised his quarterly earnings per share estimate for Warnaco to USD 1 from 92 cents. He also lifted the company’s full-year earnings forecast to USD 4.57 per share from USD 4.35, stating that the company is likely to see better margins as product costs decline and faces easy European margin comparisons.
Shares of Warnaco Group Inc. rose USD 2.68 to USD 53.63 in afternoon trading. The shares have traded in a range of USD 40.08 to USD 65.01 over the last year.