Kenneth Cole Productions, Inc. (New York) reported first quarter revenues of $123 million, down 5.6% from the year-ago quarter. Executives said that the decline was primarily the result of a slower than anticipated start-up of a new third-party distribution center that shifted $7 million of shipments from March into April.
Had all wholesale orders shipped as planned, the company noted that sales and earnings results would have been in-line with previous guidance for revenues and earnings per share. Kenneth Cole’s consolidated inventories of $54 million on March 31, 2006 were up 7.2% versus the year-ago level of $50 million. This again reflects the carry-forward of unshipped product at quarter-end.
"Our wholesale and licensing businesses remain healthy, as indicated by a strong backlog as well as solid performance from a wide range of categories of licensed products. We believe this illustrates, in large part, the ongoing successful implementation of our brand elevation strategy,” said chairman and CEO Kenneth Cole. "Our consumer direct business, however, remains very challenging. We are putting corrective actions into place to address the disappointing performance of our retail stores, including the adjustment of the range of various products and their respective price points."
Kenneth Cole designs, sources and markets a broad range of footwear, handbags, and accessories under a variety of trademarks. The company distributes its products through department stores, specialty stores and company-owned retail stores as well as direct to consumer catalogs and e-commerce.