In its first guidance on the subject, Kenneth Cole Productions Inc. said late Tuesday it expects to report a loss for the just-concluded fourth quarter.
The New York-based firm expects to register a deficit of 20 to 30 cents a diluted share, higher than analysts’ estimates of a 13-cent loss. The projection excludes non-operating charges of 40 to 45 cents a share covering, among other cost-cutting initiatives, a 10 percent reduction in headcount and the consolidation of its Tribeca footwear line into other brands. It’s estimated that reductions will save the company about $10 million a year.
Revenues are forecast to tally $125 million, down 5 percent from last year’s fourth quarter, on a same-store sales decline of 11 percent.
KCP expects to end the year with about $65 million in cash and cash equivalents, no long-term debt and inventories that are 10 percent lower than those of a year ago.
“We made a conscious decision to convert our inventory to cash during the peak holiday shopping period to increase our liquidity,” CEO Jill Granoff said in a statement. “While this placed short-term pressure on margins and profitability, we have taken proactive steps to maximize our ability to respond effectively to unforeseen challenges as well as opportunities that may lie ahead.”
The company disclosed its earnings expectations after the markets closed on Tuesday. Earlier, shares closed at $6.21, up 4 cents or 0.7 percent. However, the stock was down more than 7 percent in after-hours trading. Its 52-week range is $5.57 to $19.74.
Audited results are expected during the first week of March.