Kenneth Cole Productions Inc.

Consumer GoodsPersonal & Household GoodsPersonal Goods
    
    

    





          --Kenneth Cole Productions Reports Second Quarter Results--
             --Reports Q2 EPS of $0.03, in line with Expectations--
      --Issues Q3 Guidance of 15% Revenue Growth and EPS of $0.29-$0.31--


New   York,   New  York,  August  03, 2011 /  Thomson  Reuters  -  Kenneth  Cole
Productions,  Inc. (NYSE:  KCP) today reported  financial results for the second
quarter  ended  June  30, 2011. The  Company  reported  operating income of $1.1
million,  flat versus the year-ago quarter.  The Company reported net income per
fully-diluted  share of $0.03 in the second quarter versus of $0.05 in the year-
ago  period.  The Company  noted that during  the quarter it  took an impairment
charge  of $0.02 per  fully-diluted share against  the value of its auction-rate
securities.

Paul  Blum, Chief Executive Officer, commented, "Although second quarter results
were  consistent with our short-term expectations,  we are by no means satisfied
and  are dedicated to improving every aspect  of our business. We are focused on
creating  great product, more effective  marketing and improving the performance
of our operating segments across the board."

Net  revenues in the second quarter  decreased 5.3% to $102.2 million versus the
second quarter last year.   Wholesale revenues were flat at $52.0 million versus
the  year-ago  period.   Consumer  Direct  revenues  declined  by 11.5% to $39.6
million  versus the  year-ago period,  due to  the closing of unproductive full-
priced  stores and a comparable store sales decline of 1.7%.  Licensing revenues
in  the second  quarter declined  to $10.6  million versus  $11.1 million in the
year-ago  quarter.  Excluding royalties from a  now terminated Le Tigre license,
licensing revenues were up 4.5%.

Gross  margin declined 310 basis points to  40.6% versus the second quarter last
year.   This anticipated decline was driven  by higher sourcing costs, increased
promotion  to clear inventory, and  a shift in mix  as Wholesale became a larger
percentage of total sales.

SG&A,  as a percentage of net revenues  in the second quarter improved 310 basis
points  to 39.6% from  42.7% in the  year-ago period.   The improvement  was the
result  of an ongoing focus on cost efficiencies and the elimination of overhead
related to closed, unproductive full-priced stores.

The Company's balance sheet remained strong at June 30, 2011 with $56 million in
cash  and no long-term debt.  Total inventory was $40.7 million versus the prior
year's  level of  $35.2 million,  in line  with sales expectations.  The Company
also  noted  that  approximately  $5.0  million  of  the  increase was driven by
inventory required to support the Company's sportswear initiative.

The  Company noted  that during  the quarter,  it repurchased 143,800 shares for
approximately   $1.7   million.   This  leaves  approximately  3 million  shares
available for repurchase under its existing authorization.

Kenneth  Cole, Chairman and Chief Creative  Officer, commented, "I am excited to
have  Paul Blum  return to  the Company  as our  new CEO.  The Company has begun
implementing  a new strategic plan with a heightened focus on product, which has
already begun to energize and mobilize the organization."


Third Quarter Guidance
The  Company expects to report third quarter  earnings per share on a GAAP basis
of  $0.29 -  $0.31 versus  the prior  year level  of $0.11  per share on revenue
growth of approximately 15%.

About Kenneth Cole Productions, Inc.
Kenneth  Cole Productions, Inc.  designs, sources, and  markets a broad range of
footwear,  handbags, apparel and accessories under  the brand names Kenneth Cole
New  York; Kenneth Cole  Reaction; and Unlisted,  as well as  footwear under the
proprietary trademark Gentle Souls.  The Company has also granted a wide variety
of  third party  licenses for  the production  of men's,  women's and children's
apparel  as well  as fragrances,  watches, jewelry,  eyewear, and  several other
accessory categories.  The Company's products are distributed through department
stores,  better specialty stores, company-owned retail stores and its e-commerce
website.  Further information can be found at http://www.kennethcole.com/.

Forward Looking Statement Disclosure
The statements contained in this release, which are not historical facts, may be
deemed  to  constitute  "forward-looking  statements"  within the meaning of the
Private  Securities Litigation Reform Act  of 1995.  Actual future results might
differ  materially from those  projected in such  statements due to  a number of
risks  and uncertainties, including  but not limited  to, demand and competition
for  the  Company's  products,  the  ability  to  enter into new product license
agreements  or to renew or replace existing product licensee agreements, changes
in consumer preferences or fashion trends, delays in anticipated store openings,
and  changes in the  Company's relationships with  retailers, licensees, vendors
and  other resources.  The forward looking  statements contained herein are also
subject  to other  risks and  uncertainties that  are described in the Company's
reports  and  registration  statements  filed  with  the Securities and Exchange
Commission.

Company Contact
David Edelman
Chief Financial Officer
Kenneth Cole Productions, Inc.
(212) 265-1500

Investor Relations Contact
James R. Palczynski
Principal
Integrated Corporate Relations, Inc.
(203) 682-8229





                         Kenneth Cole Productions, Inc.
                                  (unaudited)

(In thousands, except               Quarter Ended            Six MonthsEnded

per share & outstanding share
amounts)

                                06/30/11     06/30/10     06/30/11     06/30/10



Net sales                         $91,643      $96,888     $199,339     $196,281



Royalty Revenue                    10,602       11,085       20,379       21,204
                              ------------ ------------ ------------ -----------


Net revenues                     $102,245     $107,973     $219,718     $217,485



Gross profit                       41,496       47,188       83,167       92,738



Selling, gen'l &                   40,441       46,092       86,746       90,672
administrative expenses

Store closings & severance             --           --
costs                                                        12,482           --
                              ------------ ------------ ------------ -----------
Total operating expense            40,441       46,092       99,228       90,672



Operating income/(loss)             1,055        1,096     (16,061)        2,066



Interest & other income, net           73           65          120        1,032

Investment impairment               (376)         (48)        (376)         (68)
                              ------------ ------------ ------------ -----------




Income/(loss) before taxes            752        1,113     (16,317)        3,030



Provision for income taxes            173          176          306          261
                              ------------ ------------ ------------ -----------


Net income/(loss)                    $579         $937    $(16,623)       $2,769





Net income/(loss) per               $0.03        $0.05      $(0.91)        $0.15
share:Basic



Net income/(loss) per
share:Diluted                       $0.03        $0.05      $(0.91)        $0.15



Average shares                 18,296,000   18,146,000   18,268,000   18,119,000
outstanding:Basic



Average shares                 18,581,000   18,517,000   18,268,000   18,501,000
outstanding:Diluted



Balance Sheet Data:             06/30/11     06/30/10

Cash & Cash Equivalents           $56,247      $79,211

Accounts Receivable                36,398       32,206

Inventory                          40,716       35,170

Total Assets                      246,077      255,846

Working Capital                    75,362       96,272

Accounts Payable & Accrued         46,904       39,486
Expenses

Long-term Debt                          -            -

Total Shareholders' Equity        130,537      145,806

















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Source: Kenneth Cole Productions Inc. via Thomson Reuters ONE

[HUG#1535775]