Warnaco Reports Second Quarter 2008 Results

For the second quarter on a GAAP basis:

-- Net revenues rose 22% compared to the prior year quarter

-- Gross margin increased 290 basis points to 45% of net revenues

-- Operating margin increased 290 basis points to 10% of net revenues

-- Income from continuing operations increased 23% to $0.57 per diluted share

For the second quarter on an adjusted basis (non-GAAP) (excluding certain tax items, restructuring expenses and pension income/expense):

-- Operating margin increased 330 basis points to 11% of net revenues

-- Income from continuing operations increased 56% to $0.71 per diluted share

The accompanying tables provide a reconciliation of actual results to the as adjusted results.

The Company believes it is valuable for users of the Company's financial statements to be made aware of the as adjusted financial information, as such measures are used by management to evaluate the operating performance of the Company's continuing businesses on a comparable basis.

"We are pleased to report another strong quarter for Warnaco," stated Joe Gromek, Warnaco's President and Chief Executive Officer. "Our second quarter results included broad based strength with all operating segments and geographies recording increased revenue and profitability. Our key expansion initiatives, including international, direct-to-consumer and our Calvin Klein businesses, continued to fuel our growth. During the quarter, international revenues accounted for 50% of the Company's total, led by 51% growth in Europe. With powerful brands and an integrated global platform, we are excited about our opportunities both in the near and long term."

Mr. Gromek concluded, "While we are mindful of macro economic challenges, we believe our strategies will continue to produce positive results and underscores our decision to again increase guidance. Longer term, we see ample opportunity for organic growth as we continue to execute our strategic plan."

Fiscal 2008 Outlook

Based on a strong first half performance, for fiscal 2008, the Company now expects net revenues to grow 13% - 15% over comparable fiscal 2007 levels and, on an adjusted basis (excluding restructuring expense and a non-recurring repatriation tax charge, and assuming minimal pension income/expense), diluted earnings per share from continuing operations in the range of $2.80 - $2.90.

The accompanying tables provide a reconciliation of expected diluted earnings per share from continuing operations on a GAAP basis ($1.70 - $1.76 per diluted share (assuming minimal pension income/expense) to the adjusted fiscal 2008 outlook above.

Second Quarter Highlights

Total Company

Net revenues rose 22% to $503.8 million compared to $412.5 million in the prior year period and gross margin increased to 45% compared to 42% in the prior year quarter. Operating income was $48.9 million, or 10% of net revenues, compared to $28.2 million, or 7% of net revenues, in the second quarter of fiscal 2007.

Income from continuing operations was $26.5 million, or $0.57 per diluted share, compared to $21.6 million, or $0.46 per diluted share, in the prior year quarter. Income from continuing operations for the second quarter of 2008 and 2007 includes approximately $6.0 million and $3.2 million, respectively, of pre-tax restructuring expense (the second quarter of 2007 also benefited from $6.3 million of other income related primarily to net gains on intercompany loans denominated in currency other than that of the foreign subsidiaries' functional currency). Net income was $19.4 million, or $0.41 per diluted share, compared to $13.8 million, or $0.30 per diluted share, in the prior year quarter.

On an adjusted, non-GAAP basis (excluding certain tax items, restructuring expenses and pension income), income from continuing operations was $33.4 million, or $0.71 per diluted share, compared to $21.4 million, or $0.46 per diluted share, in the prior year period. Net income was $26.3 million, or $0.56 per diluted share, compared to $13.6 million, or $0.29 per diluted share, in the prior year quarter.

The translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar, increased second quarter 2008 net revenues, gross margin and operating income by approximately $17.0 million, $8.1 million and $2.0 million, respectively, compared to the second quarter of fiscal 2007.

The Company's adjusted non-GAAP effective tax rate (excluding certain non-recurring items, the non-cash tax charge associated with the repatriation of the proceeds from the sale of Lejaby(R), and certain restructuring expenses for which there was no tax benefit) in the quarter was 32% compared to an adjusted rate of 26% in the first quarter. The increased rate reflects additional tax expense to attain the Company's anticipated annualized non-GAAP effective tax rate of 29% (compared to an annualized non-GAAP effective tax rate of 25% in fiscal 2007).

Segment Results

Sportswear

Revenues for the Sportswear Group increased 29% to $249.4 million and operating income increased to $23.0 million, or 9% of net revenues. Calvin Klein Jeans revenue growth remained strong and included double digit increases in all geographies. Operating income reflects sharp improvements in Chaps operating profit, resulting from improved product offerings and lower dilution, combined with continued strength in the Calvin Klein Jeans businesses.

Intimate Apparel

Intimate Apparel Group revenues rose 24% to $172.7 million and operating income increased to $31.8 million, or 18% of Intimate Apparel Group net revenues. All brands and businesses within the Intimate Apparel Group contributed to the strong results. While international expansion remains a key contributor to the growth of Calvin Klein Underwear, the U.S. Calvin Klein Underwear business increased revenues by 9% despite a challenging environment. Expanded distribution and strong response to new product offerings contributed to both top and bottom line improvement for the Group's core brands, Warner's(R) and Olga(R).

Swimwear

Swimwear Group revenues rose 2% to $81.7 million and operating income increased to $7.7 million, or 9% of net revenues. Strong European demand, driven by fashion right design, continued to drive Calvin Klein swim revenues higher. While Speedo(R) revenues decreased $1.5 million, Speedo operating income was up significantly to $6.9 million, or 10% of Speedo net revenues. Group results benefited from a lower restructuring expense as well as a reduction in SG&A expense, as compared to the prior year period.

Balance Sheet

Cash and cash equivalents at July 5, 2008 were $154.5 million compared to $163.1 million at June 30, 2007. Since June 30, 2007, the Company has repurchased approximately $24.7 million of its common stock, repaid approximately $83.6 million of debt and received proceeds of approximately $47.4 million from the sale of its Lejaby, Catalina(R), Anne Cole(R) and Cole of California(R) businesses.

Accounts receivable, net, increased to $310.9 million at July 5, 2008 from $278.6 million at June 30, 2007, primarily due to increased sales toward the end of the quarter and growth in our European business.

Net inventories were $316.3 million at July 5, 2008, down from $357.1 million at June 30, 2007, primarily as a result of discontinued operations, and in line with the Company's needs to service its ongoing business.

"Our business continues to generate positive cash flow, which we are investing in those areas of the Company that are expected to produce long-term sustainable growth. We begin the second half of the year well positioned, with increased cash and reduced debt and operating with less inventory, as compared to a year ago," stated Larry Rutkowski, Warnaco's Executive Vice President and Chief Financial Officer.

Subsequent Events

The Company expects to enter into a new $300 million Asset Based Revolving Credit facility, which is expected to close during the third quarter. As part of this refinancing, the Company expects to retire the outstanding balance of its Term B loans.

Conference Call Information

Stockholders and other persons are invited to listen to the first quarter earnings conference call scheduled for today, Thursday, August 7, 2008, at 9:00 a.m. EDT. To participate in Warnaco's conference call, dial (877) 692-2592 approximately five to ten minutes prior to the 9:00 a.m. start time. The call will also be broadcast live over the Internet at www.warnaco.com. An online archive will be available following the call.

This press release was furnished to the SEC (www.sec.gov) and may also be accessed through the Company's internet website: www.warnaco.com.

ABOUT WARNACO

The Warnaco Group, Inc., headquartered in New York, is a leading apparel company engaged in the business of designing, sourcing, marketing and selling intimate apparel, menswear, jeanswear, swimwear, men's and women's sportswear and accessories under such owned and licensed brands as Warner's(R), Olga(R), and Speedo(R), as well as Chaps(R) sportswear and denim, and Calvin Klein(R) men's and women's underwear, men's and women's bridge apparel and accessories, men's and women's jeans and jeans accessories, junior women's and children's jeans and men's and women's swimwear.

FORWARD-LOOKING STATEMENTS

The Warnaco Group, Inc. notes that this press release, the conference call scheduled for August 7, 2008 and certain other written, electronic and oral disclosure made by the Company from time to time, may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties and reflect, when made, the Company's estimates, objectives, projections, forecasts, plans, strategies, beliefs, intentions, opportunities and expectations. Actual results may differ materially from anticipated results, targets or expectations and investors are cautioned not to place undue reliance on any forward-looking statements. Statements other than statements of historical fact, including, without limitation, future financial targets, are forward-looking statements. These forward-looking statements may be identified by, among other things, the use of forward-looking language, such as the words "believe," "anticipate," "estimate," "expect," "intend," "may," "project," "scheduled to," "seek," "should," "will be," "will continue," "will likely result, " "targeted", or the negative of those terms, or other similar words and phrases or by discussions of intentions or strategies.

The following factors, among others and in addition to those described in the Company's reports filed with the SEC (including, without limitation, those described under the headings "Risk Factors" and "Statement Regarding Forward-Looking Disclosure," as such disclosure may be modified or supplemented from time to time), could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by it: the Company's ability to execute its repositioning and sale initiatives (including achieving enhanced productivity and profitability) previously announced; economic conditions that affect the apparel industry; the Company's failure to anticipate, identify or promptly react to changing trends, styles, or brand preferences; further declines in prices in the apparel industry; declining sales resulting from increased competition in the Company's markets; increases in the prices of raw materials; events which result in difficulty in procuring or producing the Company's products on a cost-effective basis; the effect of laws and regulations, including those relating to labor, workplace and the environment; changing international trade regulation, including as it relates to the imposition or elimination of quotas on imports of textiles and apparel; the Company's ability to protect its intellectual property or the costs incurred by the Company related thereto; the risk of product safety issues, defects or other production problems associated with our products; the Company's dependence on a limited number of customers; the effects of consolidation in the retail sector; the Company's dependence on license agreements with third parties; the Company's dependence on the reputation of its brand names, including, in particular, Calvin Klein; the Company's exposure to conditions in overseas markets in connection with the Company's foreign operations and the sourcing of products from foreign third-party vendors; the Company's foreign currency exposure; the Company's history of insufficient disclosure controls and procedures and internal controls and restated financial statements; unanticipated future internal control deficiencies or weaknesses or ineffective disclosure controls and procedures; the effects of fluctuations in the value of investments of the Company's pension plan; the sufficiency of cash to fund operations, including capital expenditures; the Company's ability to service its indebtedness, the effect of changes in interest rates on the Company's indebtedness that is subject to floating interest rates and the limitations imposed on the Company's operating and financial flexibility by the agreements governing the Company's indebtedness; the Company's dependence on its senior management team and other key personnel; the Company's reliance on information technology; the limitations on purchases under the Company's share repurchase program contained in the Company's debt instruments, the number of shares that the Company purchases under such program and the prices paid for such shares; the Company's inability to achieve its financial targets and strategic objectives, as a result of one or more of the factors described above, changes in the assumptions underlying the targets or goals, or otherwise; the failure of acquired businesses to generate expected levels of revenues; the failure of the Company to successfully integrate such businesses with its existing businesses (and as a result, not achieving all or a substantial portion of the anticipated benefits of such acquisitions); and such acquired businesses being adversely affected, including by one or more of the factors described above and thereby failing to achieve anticipated revenues and earnings growth.

The Company encourages investors to read the section entitled "Risk Factors" and the discussion of the Company's critical accounting policies under "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Discussion of Critical Accounting Policies" included in the Company's Annual Report on Form 10-K, as such discussions may be modified or supplemented by subsequent reports that the Company files with the SEC. The discussion in this press release is not exhaustive but is designed to highlight important factors that may affect actual results. Forward-looking statements speak only as of the date on which they are made, and, except for the Company's ongoing obligation under the U.S. federal securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Schedule 1 THE WARNACO GROUP, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, excluding per share amounts) (Unaudited) As Reported Restructuring As Adjusted Second Second Quarter Charges and Taxation (c) Quarter of Fiscal of Fiscal 2008 Pension (b) 2008 (d) ------------------------------------------------------ Net revenues $ 503,835 $ - $ - $ 503,835 Cost of goods sold 278,924 (104) 278,820 ------------------------------------------------------ Gross profit 224,911 104 - 225,015 Selling, general and administrative expenses 173,682 (5,871) 167,811 Amortization of intangible assets 2,588 2,588 Pension income (291) 291 - ------------------------------------------------------ Operating income 48,932 5,684 - 54,616 Other expense (1,203) (1,203) Interest expense 7,086 7,086 Interest income (671) (671) ------------ --------------------------------------- Income from continuing operations before provision for income taxes and minority interest 43,720 5,684 - 49,404 Provision for income taxes 17,078 (1,236) 15,842 ------------ --------------------------------------- Income from continuing operations before minority interest 26,642 5,684 1,236 33,562 Minority Interest (148) (148) ------------------------------------------------------ Income from continuing operations 26,494 5,684 1,236 33,414 Loss from (a) discontinued operations, net of taxes (7,130) (7,130) ------------------------------------------------------ Net income $ 19,364 $ 5,684 $ 1,236 $ 26,284 ====================================================== Basic income per common share: Income from continuing operations $ 0.58 $ 0.13 $ 0.03 $ 0.74 Loss from discontinued operations (0.15) - - (0.16) ------------------------------------------------------ Net income $ 0.43 $ 0.13 $ 0.03 $ 0.58 ====================================================== Diluted income per common share: Income from continuing operations $ 0.57 $ 0.12 $ 0.03 $ 0.71 Loss from discontinued operations (0.16) - - (0.15) ------------------------------------------------------ Net income $ 0.41 $ 0.12 $ 0.03 $ 0.56 ====================================================== Weighted average number of shares outstanding used in computing income per common share: Basic 45,340,695 45,340,695 45,340,695 45,340,695 ====================================================== Diluted 46,780,639 46,780,639 46,780,639 46,780,639 ======================================================

(a) Includes operations related to the Company's designer swimwear (excluding Calvin Klein) and Lejaby businesses which have been classified as discontinued operations. (b) This adjustment seeks to present the Company's consolidated condensed statement of operations on a continuing basis without the effects of restructuring charges or pension income. See note (d) below. (c) Adjustment based on the Company's expected tax rate of 28.7% for Fiscal 2008, which rate excludes the effects of restructuring charges, pension income and certain tax related items. See note (d) below. (d) The "As Adjusted" statement of operations is used by management to evaluate the operating performance of the Company's continuing operations on a comparable basis. Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitution for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its results to provide investors with an additional tool to evaluate the Company's operating results.

Schedule 1a THE WARNACO GROUP, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, excluding per share amounts) As Reported Restructuring As Adjusted Second Second Quarter Charges and Taxation (c) Quarter of Fiscal of Fiscal 2007 Pension (b) 2007 (d) ------------------------------------------------------ Net revenues $ 412,501 $ - $ - $ 412,501 Cost of goods sold 240,413 (2,401) 238,012 ------------ --------------------------------------- Gross profit 172,088 2,401 - 174,489 Selling, general and administrative expenses 140,770 (845) 139,925 Amortization of intangible assets 3,617 3,617 Pension income (509) 509 - ------------------------------------------------------ Operating income 28,210 2,737 - 30,947 Other income (6,280) (6,280) Interest expense 9,494 9,494 Interest income (753) (753) ------------ --------------------------------------- Income from continuing operations before provision for income taxes 25,749 2,737 - 28,486 Provision for income taxes 4,181 - 2,912 7,093 ------------------------------------------------------ Income from continuing operations 21,568 2,737 (2,912) 21,393 Loss from (a) discontinued operations, net of taxes (7,791) (7,791) ------------------------------------------------------ Net income $ 13,777 $ 2,737 $ (2,912) $ 13,602 ====================================================== Basic income per common share: Income from continuing operations $ 0.48 $ 0.06 $ (0.06) $ 0.47 Loss from discontinued operations (0.17) - - (0.17) ------------------------------------------------------ Net income $ 0.31 $ 0.06 $ (0.06) $ 0.30 ====================================================== Diluted income per common share: Income from continuing operations $ 0.46 $ 0.06 $ (0.06) $ 0.46 Loss from discontinued operations (0.16) - - (0.17) ------------------------------------------------------ Net income $ 0.30 $ 0.06 $ (0.06) $ 0.29 ====================================================== Weighted average number of shares outstanding used in computing income per common share: Basic 45,146,246 45,146,246 45,146,246 45,146,246 ====================================================== Diluted 46,534,530 46,534,530 46,534,530 46,534,530 ======================================================

(a) Includes operations related to the Company's designer swimwear (excluding Calvin Klein) and Lejaby businesses which have been classified as discontinued operations. (b) This adjustment seeks to present the Company's consolidated condensed statement of operation on a continuing basis without the effects of restructuring charges or pension income. See note (d) below. (c) Adjustment to reflect the Company's income from continuing operations at a normalized tax rate of 24.9% which reflects the Company's tax rate for Fiscal 2007 excluding the effects of restructuring charges, pension income and certain tax related items. See note (d) below. (d) The "As Adjusted" statement of operations is used by management to evaluate the operating performance of the Company's continuing operations on a comparable basis. Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitution for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its results to provide investors with an additional tool to evaluate the Company's operating results.

Schedule 2 THE WARNACO GROUP, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, excluding per share amounts) (Unaudited) As Reported Restructuring As Adjusted Six Months Six Months Ended Charges and Taxation (d) Ended July 5, 2008 July 5, 2008 Pension (c) (e) ---------------------------- ------------ ------------ Net revenues $ 1,072,063 $ - $ 1,072,063 Cost of goods sold 592,781 (840) 591,941 ------------ ------------- ------------ ------------ Gross profit 479,282 840 - 480,122 Selling, general and administrative expenses 369,988 (25,477) 344,511 Amortization of intangible assets 5,062 5,062 Pension income (582) 582 - ------------------------------------------------------ Operating income 104,814 25,735 - 130,549 Other expense 4,258 4,258 Interest expense 16,476 16,476 Interest income (1,604) (1,604) ------------ --------------------------------------- Income from continuing operations before provision for income taxes and minority interest 85,684 25,735 - 111,419 Provision for income taxes 51,765 (a) (19,788) 31,977 ------------ --------------------------------------- Income from continuing operations before minority interest 33,919 25,735 19,788 79,442 Minority Interest (359) (359) ------------------------------------------------------ Income from continuing operations 33,560 25,735 19,788 79,083 Income from (b) discontinued operations, net of taxes 3,513 3,513 ------------------------------------------------------ Net income $ 37,073 $ 25,735 $ 19,788 $ 82,596 ====================================================== Basic income per common share: Income from continuing operations $ 0.75 $ 0.57 $ 0.44 $ 1.76 Income from discontinued operations 0.07 - - 0.08 ------------------------------------------------------ Net income $ 0.82 $ 0.57 $ 0.44 $ 1.84 ====================================================== Diluted income per common share: Income from continuing operations $ 0.72 $ 0.55 $ 0.42 $ 1.70 Income from discontinued operations 0.08 - - 0.07 ------------------------------------------------------ Net income $ 0.80 $ 0.55 $ 0.42 $ 1.77 ====================================================== Weighted average number of shares outstanding used in computing income per common share: Basic 44,953,200 44,953,200 44,953,200 44,953,200 ====================================================== Diluted 46,590,322 46,590,322 46,590,322 46,590,322 ======================================================

(a) Includes, among other items, a non-recurring tax charge of approximately $19,000 related to the repatriation, to the United States, of the net proceeds received in connection with the sale of the Lejaby business. (b) Includes operations related to the Company's designer swimwear (excluding Calvin Klein) and Lejaby businesses which have been classified as discontinued operations. (c) This adjustment seeks to present the Company's consolidated condensed statement of operations on a continuing basis without the effects of restructuring charges or pension income. See note (e) below. (d) Adjustment to reflect the Company's income from continuing operations at a normalized tax rate of 28.7% which reflects the Company's estimated tax rate for fiscal 2008 excluding the effects of restructuring charges, pension income and certain tax related items (including a non-recurring tax charge of approximately $19,000 related to the repatriation, to the United States of the net proceeds received in connection with the sale of the Lejaby business). See note (e) below. (e) The "As Adjusted" statement of operations is used by management to evaluate the operating performance of the Company's continuing operations on a comparable basis. Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitution for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its results to provide investors with an additional tool to evaluate the Company's operating results.

Schedule 2a THE WARNACO GROUP, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, excluding per share amounts) As Reported Restructuring As Adjusted Six Months Six Months Ended Charges and Taxation (c) Ended June 30, June 30, 2007 Pension (b) 2007 (d) ------------------------------------------------------ Net revenues $ 881,741 $ - $ - $ 881,741 Cost of goods sold 512,295 (3,001) 509,294 ------------ --------------------------------------- Gross profit 369,446 3,001 - 372,447 Selling, general and administrative expenses 283,567 (1,087) 282,480 Amortization of intangible assets 7,051 7,051 Pension income (693) 693 - ------------------------------------------------------ Operating income 79,521 3,395 - 82,916 Other income (6,882) (6,882) Interest expense 18,806 18,806 Interest income (1,036) (1,036) ------------ --------------------------------------- Income from continuing operations before provision for income taxes 68,633 3,395 - 72,028 Provision for income taxes 18,817 - (882) 17,935 ------------------------------------------------------ Income from continuing operations 49,816 3,395 882 54,093 Income from (a) discontinued operations, net of taxes 1,936 1,936 ------------------------------------------------------ Net income $ 51,752 $ 3,395 $ 882 $ 56,029 ====================================================== Basic income per common share: Income from continuing operations $ 1.11 $ 0.08 $ 0.02 $ 1.20 Income from discontinued operations 0.04 - - 0.04 ------------------------------------------------------ Net income $ 1.15 $ 0.08 $ 0.02 $ 1.24 ====================================================== Diluted income per common share: Income from continuing operations $ 1.07 $ 0.07 $ 0.02 $ 1.16 Income from discontinued operations 0.04 - - 0.05 ------------------------------------------------------ Net income $ 1.11 $ 0.07 $ 0.02 $ 1.21 ====================================================== Weighted average number of shares outstanding used in computing income per common share: Basic 45,058,976 45,058,976 45,058,976 45,058,976 ====================================================== Diluted 46,482,664 46,482,664 46,482,664 46,482,664 ======================================================

(a) Includes operations related to the Company's designer swimwear (excluding Calvin Klein) and Lejaby businesses which have been classified as discontinued operations. (b) This adjustment seeks to present the Company's consolidated condensed statement of operations on a continuing basis without the effects of restructuring charges or pension income. See note (d) below. (c) Adjustment to reflect the Company's income from continuing operations at a normalized tax rate of 24.9% which reflects the Company's tax rate for Fiscal 2007 excluding the effects of restructuring charges, pension income and certain tax related items. See note (e) below. (d) The "As Adjusted" statement of operations is used by management to evaluate the operating performance of the Company's continuing operations on a comparable basis. Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitution for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its results to provide investors with an additional tool to evaluate the Company's operating results.

Schedule 3 THE WARNACO GROUP, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in thousands) (Unaudited) July 5, December June 30, 2008 29, 2007 2007 ---------- ---------- ---------- ASSETS Current assets: Cash and cash equivalents $ 154,516 $ 191,918 $ 163,054 Accounts receivable, net 310,883 267,450 278,570 Inventories 316,350 332,652 357,073 Assets of discontinued operations (a) 10,520 67,931 4,532 Other current assets 168,032 133,211 57,830 ---------- ---------- ---------- Total current assets 960,301 993,162 861,059 Property, plant and equipment, net 112,627 111,916 118,317 Intangible and other assets 536,724 501,425 604,058 ---------- ---------- ---------- TOTAL ASSETS $1,609,652 $1,606,503 $1,583,434 ========== ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 35,562 $ 56,115 $ 45,360 Accounts payable and accrued liabilities 286,513 294,271 275,279 Accrued income taxes payable 25,109 12,199 15,892 Liabilities of discontinued operations (b) 17,141 42,566 1,678 ---------- ---------- ---------- Total current liabilities 364,325 405,151 338,209 Long-term debt 265,291 310,500 331,402 Other long-term liabilities 121,778 117,956 189,977 Total stockholders' equity 858,258 772,896 723,846 ---------- ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,609,652 $1,606,503 $1,583,434 ========== ========== ========== (a) Assets of discontinued operations include the following: July 5, December June 30, 2008 29, 2007 2007 ---------- ---------- ---------- Accounts receivable, net $ 8,931 $ 21,487 $ 3,103 Inventories 192 28,167 745 Other current assets 1,024 6,741 555 Property, plant and equipment, net 373 3,001 - Intangible and other assets - 8,535 129 ---------- ---------- ---------- Assets of discontinued operations $ 10,520 $ 67,931 $ 4,532 ========== ========== ========== (b) Liabilities of discontinued operations include the following: July 5, December June 30, 2008 29, 2007 2007 ---------- ---------- ---------- Accounts payable $ 5,017 $ 14,867 $ 614 Accrued liabilities 9,563 21,700 1,064 Other long-term liabilities 2,561 5,999 - ---------- ---------- ---------- Liabilities of discontinued operations $ 17,141 $ 42,566 $ 1,678 ========== ========== ==========

Schedule 4 THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY BUSINESS GROUP (Dollars in thousands) (Unaudited) Net revenues: Second Second Increase / Quarter Quarter % of Fiscal of Fiscal (Decrease) Change 2008 2007 --------- ----------- ---------- --------- Sportswear Group $249,395 $192,890 $ 56,505 29.3 % Intimate Apparel Group 172,746 139,453 33,293 23.9 % Swimwear Group 81,694 80,158 1,536 1.9 % --------- ----------- ---------- Net revenues $503,835 $412,501 $ 91,334 22.1 % ========= =========== ========== ========= Second Second % of Quarter % of Group Quarter Group of Fiscal Net of Fiscal Net 2008 Revenues 2007 Revenues --------- ----------- ---------- --------- Operating income (loss): Sportswear Group (a) $ 23,040 9.2 % $ 18,300 9.5 % Intimate Apparel Group (a), (b) 31,826 18.4 % 22,016 15.8 % Swimwear Group (a), (b) 7,658 9.4 % 937 1.2 % Unallocated corporate expenses (b) (13,592) na (13,043) na --------- ---------- Operating income $ 48,932 na $ 28,210 na ========= =========== ========== ========= Operating income as a percentage of total net revenues 9.7% 6.8% ========= ========== (a) Includes an allocation of shared services expenses as follows: Second Second Quarter Quarter of Fiscal of Fiscal 2008 2007 --------- ----------- Sportswear Group $ 5,453 $ 5,584 Intimate Apparel Group $ 4,430 $ 4,289 Swimwear Group $ 3,824 $ 4,980 (b) Includes restructuring charges as follows: Second Second Quarter Quarter of Fiscal of Fiscal 2008 2007 --------- ----------- Sportswear Group $ 4,401 $ 21 Intimate Apparel Group 18 19 Swimwear Group 144 3,206 Unallocated corporate expenses 1,412 - --------- ----------- $ 5,975 $ 3,246 ========= ===========

Schedule 4a THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY BUSINESS GROUP (Dollars in thousands) (Unaudited) Net revenues: Six Months Six Months Increase / Ended Ended % July 5, June 30, (Decrease) Change 2008 2007 ----------- ----------- ---------- --------- Sportswear Group $ 549,514 $428,321 $121,193 28.3% Intimate Apparel Group 340,345 276,823 63,522 22.9% Swimwear Group 182,204 176,597 5,607 3.2% ----------- ----------- ---------- Net revenues $1,072,063 $881,741 $190,322 21.6% =========== =========== ========== ========= Six Months % of Group Six Months % of Ended Ended Group July 5, Net June 30, Net 2008 Revenues 2007 Revenues ----------- ----------- ---------- --------- Operating income (loss): Sportswear Group (a) $ 45,119 8.2 % $ 45,226 10.6 % Intimate Apparel Group (a), (b) 64,250 18.9 % 45,734 16.5 % Swimwear Group (a), (b) 22,476 12.3 % 14,415 8.2 % Unallocated corporate expenses (b) (27,031) na (25,854) na ----------- ---------- Operating income $ 104,814 na $ 79,521 na =========== =========== ========== ========= Operating income as a percentage of total net revenues 9.8% 9.0% =========== ========== (a) Includes an allocation of shared services expenses as follows: Six Months Six Months Ended Ended July 5, June 30, 2008 2007 ----------- ----------- Sportswear Group $ 10,910 $ 11,165 Intimate Apparel Group $ 8,861 $ 8,581 Swimwear Group $ 7,648 $ 9,960 (b) Includes restructuring charges as follows: Six Months Six Months Ended Ended July 5, June 30, 2008 2007 ----------- ----------- Sportswear Group $ 23,096 $ 119 Intimate Apparel Group 695 120 Swimwear Group 1,114 3,872 Unallocated corporate expenses 1,412 (23) ----------- ----------- $ 26,317 $ 4,088 =========== ===========

Schedule 5 THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY REGION & CHANNEL (Dollars in thousands) (Unaudited) By Region: Net Revenues ----------------------------------------- Second Second Quarter Quarter of of Fiscal Fiscal 2008 2007 Increase % Change --------- --------- ----------- --------- United States $254,484 $241,921 $12,563 5.2% Europe 119,790 79,304 40,486 51.1% Asia 71,790 50,426 21,364 42.4% Canada 31,349 26,109 5,240 20.1% Mexico, Central and South America 26,422 14,741 11,681 79.2% --------- --------- ----------- Total $503,835 $412,501 $91,334 22.1% ========= ========= =========== ========= Operating Income ----------------------------------------- Second Second Quarter Quarter of of Fiscal Fiscal Increase / 2008 2007 (Decrease) % Change --------- --------- --------------------- United States $ 33,452 $ 22,271 $11,181 50.2% Europe 8,000 6,275 1,725 27.5% Asia 10,548 6,880 3,668 53.3% Canada 7,898 3,852 4,046 105.0% Mexico, Central and South America 2,627 1,975 652 33.0% Unallocated corporate expenses (13,592) (13,043) (549) 4.2% --------- --------- ----------- Total $ 48,933 $ 28,210 $20,723 73.5% ========= ========= =========== ========= By Channel: Net Revenues ----------------------------------------- Second Second Quarter Quarter of of Fiscal Fiscal 2008 2007 Increase % Change --------- --------- ----------- --------- Wholesale $396,964 $335,521 $61,443 18.3% Retail 106,871 76,980 29,891 38.8% --------- --------- ----------- Total $503,835 $412,501 $91,334 22.1% ========= ========= =========== ========= Operating Income ----------------------------------------- Second Second Quarter Quarter of of Fiscal Fiscal Increase / 2008 2007 (Decrease) % Change --------- --------- ----------- --------- Wholesale $ 47,633 $ 26,569 $21,064 79.3% Retail 14,892 14,684 208 1.4% Unallocated corporate expenses (13,592) (13,043) (549) 4.2% --------- --------- ----------- Total $ 48,933 $ 28,210 $20,723 73.5% ========= ========= =========== =========

Schedule 5a THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY REGION & CHANNEL (Dollars in thousands) (Unaudited) By Region: Net Revenues ------------------------------------------ Six Months Six Months Ended Ended July June 30, 5, 2008 2007 Increase % Change ----------- --------- ----------- -------- United States $ 511,498 $487,726 $ 23,772 4.9% Europe 291,956 200,976 90,980 45.3% Asia 158,373 112,821 45,552 40.4% Canada 58,850 49,512 9,338 18.9% Mexico, Central and South America 51,386 30,706 20,680 67.3% ----------- --------- ----------- Total $1,072,063 $881,741 $190,322 21.6% =========== ========= =========== ======== Operating Income ------------------------------------------ Six Months Six Months Ended Ended July June 30, Increase / 5, 2008 2007 (Decrease) % Change ----------- --------- -------------------- United States $ 61,822 $ 46,869 $ 14,953 31.9% Europe 23,366 28,389 (5,023) -17.7% Asia 26,306 16,766 9,540 56.9% Canada 14,184 8,370 5,814 69.5% Mexico, Central and South America 6,167 4,981 1,186 23.8% Unallocated corporate expenses (27,031) (25,854) (1,177) 4.6% ----------- --------- ----------- Total $ 104,814 $ 79,521 $ 25,293 31.8% =========== ========= =========== ======== By Channel: Net Revenues ------------------------------------------ Six Months Six Months Ended Ended July June 30, 5, 2008 2007 Increase % Change ----------- --------- ----------- -------- Wholesale $ 859,851 $728,935 $130,916 18.0% Retail 212,212 152,806 59,406 38.9% ----------- --------- ----------- Total $1,072,063 $881,741 $190,322 21.6% =========== ========= =========== ======== Operating Income ------------------------------------------ Six Months Six Months Ended Ended July June 30, Increase / 5, 2008 2007 (Decrease) % Change ----------- --------- -------------------- Wholesale $ 102,780 $ 79,796 $ 22,984 28.8% Retail 29,065 25,579 3,486 13.6% Unallocated corporate expenses (27,031) (25,854) (1,177) 4.6% ----------- --------- ----------- Total $ 104,814 $ 79,521 $ 25,293 31.8% =========== ========= =========== ========

Schedule 6 THE WARNACO GROUP, INC. SUPPLEMENTAL SCHEDULE - FISCAL 2008 OUTLOOK (Dollars in thousands, excluding per share amounts) (Unaudited) NET REVENUE GUIDANCE Percentages (Unaudited) --------------------------- Estimated growth in net revenues in Fiscal to 2008 over comparable Fiscal 2007 levels. 13.00% 15.00% EARNINGS PER SHARE GUIDANCE U.S. Dollars Diluted Income per common share from (Unaudited) continuing operations --------------------------- GAAP basis $ 1.70 to $ 1.76 Restructuring charges (a) 0.60 to 0.64 Taxation related items (b) 0.50 0.50 ----------- ------- As adjusted (Non-GAAP basis) (c) $ 2.80 to $ 2.90 =========== =======

(a) Reflects between $27,000 to $30,000 of restructuring charges (net of an income tax benefit of between $2,000 and $3,000) for Fiscal 2008 primarily related to the transfer of the Calvin Klein Collection Business. (b) Reflects certain tax related items including, among other items, a non-recurring tax charge of approximately $19,000 related to the repatriation, to the United States of the net proceeds received in connection with the sale of the Lejaby business. (c) The Company believes it is useful for users of the Company's financial statements to be made aware of the "adjusted" net revenue growth and per share amounts related to the Company's income from continuing operations as such measures are used by management to evaluate the operating performance of the Company's continuing businesses on a comparable basis. Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company presents such non- GAAP financial measures in reporting its projected results to provide investors with an additional tool to evaluate the Company's operating results.

SOURCE: The Warnaco Group, Inc.

The Warnaco Group, Inc. Deborah Abraham, 212-287-8289 Vice President, Investor Relations