(Reuters) - Liz Claiborne Inc LIZ.N, which recently announced a name change, cut its outlook for the year as the company expects to push more of its cost cuts to 2013, sending its shares down 12 percent after the bell.
The company, which also said its finance chief is leaving effective March 16 to join the media industry, now expects earnings before interest, taxes, depreciation and amortization in 2012 of between $125 million and $140 million, compared with the $130 million to $150 million it previously forecast.
“This new range ... reflects a more cautious view of how much cost reduction we can achieve ... as well as a more conservative outlook for the wholesale channel at both Juicy Couture and Lucky Brand,” Chief Executive William McComb said in a statement.
The New York-based company, which owns Juicy Couture, kate spade and Lucky Brand, has sold or closed many brands, including its namesake line, to focus on high margin brands and cut debt.
For the fiscal year, the company said it expects net debt of
between $265 million and $270 million, below the $270 million to $290 million it forecast earlier.
“You obviously don’t want a company to reduce their earnings guidance, but it isn’t a significant reduction in our view. It really doesn’t change the overall value of the business,” Mary Ross Gilbert, managing director of investment bank Imperial Capital said.
“The stock is already down over a buck in after hours and this actually provides a better entry point for investors.”
Liz Claiborne has started looking for a replacement for Chief Financial Officer Andrew Warren, who will help with the transition till a new CFO is named. Discovery Communications Inc (DISCA.O) said in a regulatory filing that Warren would join the cable company as chief financial officer.
Last week, Liz Claiborne said it will change its name to Fifth & Pacific Companies in a nod to the fashion hubs of New York and California.
Comparable sales at kate spade were up about 39 percent in December, while at Lucky Brand they rose 21 percent, the company said in a statement.
In contrast, at Juicy Couture sales fell 5 percent and Liz Claiborne said it was expecting year-end inventories to be below plan, particularly at Juicy Couture.
Liz Claiborne shares closed at $9.93 Monday on the New York Stock Exchange. They were down 12 percent at $8.70 after the bell.
Nivedita Bhattacharjee in Chicago; editing by Steve Orlofsky and Andre Grenon