Kenneth Cole Productions Inc. (KCP, Financial) filed Quarterly Report for the period ended 2010-09-30.
Kenneth Cole Productions Inc. has a market cap of $239 million; its shares were traded at around $13.12 with a P/E ratio of 27.9 and P/S ratio of 0.6. KCP is in the portfolios of Jim Simons of Renaissance Technologies LLC, Columbia Wanger of Columbia Wanger Asset Management, Charles Brandes of Brandes Investment, Charles Brandes of Brandes Investment.
First, about two-thirds of the decrease was due to a shift in revenue mix because the Wholesale segment, which carries the lowest gross margin of any segment, grew fastest and therefore became a larger percentage of the business. Second, the promotional activity in outlets was at a slightly higher level than the prior year. The Consumer Direct segment, which operates at a higher gross profit level than the Wholesale segment, had decreased revenues as a percentage of total net revenues to 37.8% for the three months ended September 30, 2010 compared to 40.2% for the three months ended September 30, 2009. The Wholesale segment revenues, as a percentage of total net revenues, increased to 52.5% for the three months ended September 30, 2010 from 49.8% for the three months ended September 30, 2009. The revenues in the Licensing segment, which carries nominal cost of goods sold, decreased, as a percentage of total net revenues, to 9.7% for the three months ended September 30, 2010 compared to 10.0% for the three months ended September 30, 2009.
INCOME TAXES: The Company's effective tax rate was 4.0% for the three months ended September 30, 2010 compared to 100.6% for the three months ended September 30, 2009. The change in the Company's effective tax rate is primarily a result of a reversal of a portion of the deferred tax valuation allowance established by the Company during 2009, relating to net operating losses utilized, which offset substantially all of the Company's federal income tax expense for the three months ended September 30, 2010. The income tax expense for 2010 is primarily taxes from state, local and foreign jurisdictions.
GROSS PROFIT: Consolidated gross profit, as a percentage of net revenues, increased to 42.6% for the nine months ended September 30, 2010 from 39.8% for the nine months ended September 30, 2009. The 280 basis point increase was attributable to increases in both Wholesale and Consumer Direct segment gross profit primarily from enhanced product and merchandise assortments and better sell-throughs, offset by increased markdowns in outlets. In addition, the increase as a percentage of total net revenues was due to revenue mix shifting to the Consumer Direct and Licensing segments. The Consumer Direct segment, which operates at a higher gross profit level than the Wholesale segment, had increased revenues as a percentage of total net revenues to 37.7% for the nine months ended September 30, 2010 compared to 37.5% for the nine months ended September 30, 2009. The Wholesale segment revenues, as a percentage of total net revenues, decreased to 52.6% for the nine months ended September 30, 2010 from 53.0% for the nine months ended September 30, 2009. The revenues in the Licensing segment, which carries nominal cost of goods sold, increased, as a percentage of total net revenues, to 9.7% for the nine months ended September 30, 2010 compared to 9.5% for the nine months ended September 30, 2009.
INCOME TAXES: The Company's effective tax rate was 6.7% for the nine months ended September 30, 2010 compared to 36.7% for the nine months ended September 30, 2009. The change in the Company's effective tax rate is primarily a result of a reversal of a portion of the deferred tax valuation allowance established by the Company during 2009, relating to net operating losses utilized, which offset substantially all of the Company's federal income tax expense for the nine months ended September 30, 2010. The income tax expense for 2010 is primarily taxes from state, local and foreign jurisdictions.
NET INCOME/(LOSS): As a result of the foregoing, the Company recorded net income of $4.8 million or 1.4% of net revenues for the nine months ended September 30, 2010 compared to a net loss of $(11.2) million or (3.7%) of net revenues for the nine months ended September 30, 2009.
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Kenneth Cole Productions Inc. has a market cap of $239 million; its shares were traded at around $13.12 with a P/E ratio of 27.9 and P/S ratio of 0.6. KCP is in the portfolios of Jim Simons of Renaissance Technologies LLC, Columbia Wanger of Columbia Wanger Asset Management, Charles Brandes of Brandes Investment, Charles Brandes of Brandes Investment.
Highlight of Business Operations:
GROSS PROFIT: Consolidated gross profit, as a percentage of net revenues, decreased to 42.5% for the three months ended September 30, 2010 from 43.3% for the three months ended September 30, 2009. The decrease was the result of two factors.First, about two-thirds of the decrease was due to a shift in revenue mix because the Wholesale segment, which carries the lowest gross margin of any segment, grew fastest and therefore became a larger percentage of the business. Second, the promotional activity in outlets was at a slightly higher level than the prior year. The Consumer Direct segment, which operates at a higher gross profit level than the Wholesale segment, had decreased revenues as a percentage of total net revenues to 37.8% for the three months ended September 30, 2010 compared to 40.2% for the three months ended September 30, 2009. The Wholesale segment revenues, as a percentage of total net revenues, increased to 52.5% for the three months ended September 30, 2010 from 49.8% for the three months ended September 30, 2009. The revenues in the Licensing segment, which carries nominal cost of goods sold, decreased, as a percentage of total net revenues, to 9.7% for the three months ended September 30, 2010 compared to 10.0% for the three months ended September 30, 2009.
INCOME TAXES: The Company's effective tax rate was 4.0% for the three months ended September 30, 2010 compared to 100.6% for the three months ended September 30, 2009. The change in the Company's effective tax rate is primarily a result of a reversal of a portion of the deferred tax valuation allowance established by the Company during 2009, relating to net operating losses utilized, which offset substantially all of the Company's federal income tax expense for the three months ended September 30, 2010. The income tax expense for 2010 is primarily taxes from state, local and foreign jurisdictions.
GROSS PROFIT: Consolidated gross profit, as a percentage of net revenues, increased to 42.6% for the nine months ended September 30, 2010 from 39.8% for the nine months ended September 30, 2009. The 280 basis point increase was attributable to increases in both Wholesale and Consumer Direct segment gross profit primarily from enhanced product and merchandise assortments and better sell-throughs, offset by increased markdowns in outlets. In addition, the increase as a percentage of total net revenues was due to revenue mix shifting to the Consumer Direct and Licensing segments. The Consumer Direct segment, which operates at a higher gross profit level than the Wholesale segment, had increased revenues as a percentage of total net revenues to 37.7% for the nine months ended September 30, 2010 compared to 37.5% for the nine months ended September 30, 2009. The Wholesale segment revenues, as a percentage of total net revenues, decreased to 52.6% for the nine months ended September 30, 2010 from 53.0% for the nine months ended September 30, 2009. The revenues in the Licensing segment, which carries nominal cost of goods sold, increased, as a percentage of total net revenues, to 9.7% for the nine months ended September 30, 2010 compared to 9.5% for the nine months ended September 30, 2009.
INCOME TAXES: The Company's effective tax rate was 6.7% for the nine months ended September 30, 2010 compared to 36.7% for the nine months ended September 30, 2009. The change in the Company's effective tax rate is primarily a result of a reversal of a portion of the deferred tax valuation allowance established by the Company during 2009, relating to net operating losses utilized, which offset substantially all of the Company's federal income tax expense for the nine months ended September 30, 2010. The income tax expense for 2010 is primarily taxes from state, local and foreign jurisdictions.
NET INCOME/(LOSS): As a result of the foregoing, the Company recorded net income of $4.8 million or 1.4% of net revenues for the nine months ended September 30, 2010 compared to a net loss of $(11.2) million or (3.7%) of net revenues for the nine months ended September 30, 2009.
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