Kellwood (NYSE) Reports Fourth Quarter and Fiscal Year 2003 Results Fourth Quarter Sales Flat, Net Earnings Up 33 Percent Versus

Kellwood (NYSE) Reports Fourth Quarter and Fiscal Year 2003 Results Fourth
Quarter Sales Flat, Net Earnings Up 33 Percent Versus Last Year Fiscal Year
Sales Up 8 Percent, Net Earnings Up 43 Percent Versus Last Year Regular
Quarterly Dividend Declared 


ST. LOUIS, March 4  /PRNewswire-FirstCall/ -- Kellwood Company reported sales
and earnings today for both the fourth quarter and fiscal year ended January 31,
2004, according to Hal J. Upbin, chairman and chief executive officer.  Sales
from continuingoperations for the fourth quarter were flat with prior year at
$521 million.  As previously announced in November, Kellwood completed the sale
of its Domestic and European Hosiery operations. During the fourth quarter, the
Company also made the decision to discontinue the True Beauty by Emme(R)
operation including the termination of the related license agreement. 
Accordingly, both the Hosiery and True Beauty businesses are treated as
discontinued operations.

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Fourth quarter net earnings from continuing operations were strong; increasing
$3.1 million, or 33 percent to $12.8 million, or $0.46 per diluted share, versus
$9.7 million, or $0.38 per diluted share last year, before business and
facilities realignment costs.  Net earnings from continuing operations in the
fourth quarter of last year including business and facilities realignment costs
were $8.4 million, or $0.33 per diluted share.

Net earnings in the fourth quarter this year including discontinued operations
increased $4.9 million, or 58 percent, to $13.3 million, or $0.48 per diluted
share, versus $8.4 million, or $0.33 per diluted share last year.

Sales from continuing operations of Women's Sportswear increased $17 million, or
6 percent, due to the acquisition of Briggs.  Men's Sportswear sales from
continuing operations increased $3 million, or 3 percent.  Finally, Other Soft
Goods sales decreased $19 million, or 16 percent, due to loss of certain low
margin private label programs.

The improvement in net earnings from continuing operations for the fourth
quarter came principally from the acquisition of Briggs and a 1.9 percentage
point improvement in gross profit as a percent of sales.  The fourth quarter
increase in gross margin is the seventh consecutive quarter in which Kellwood
has been able to post a year-to-year improvement in its gross profit percent.
This is especially noteworthy given the current economic conditions, and
continued sales price deflation at both retail and wholesale.  The Company has
been able to improve its gross margin due to more competitive sourcing resulting
from shifting more contract production from the Western to Eastern Hemisphere,
and running more contractor production through Kellwood's recently established
trading company in the Far East.

Gross margins were also bolstered by the retailers carrying less inventory this
year and the performance of Kellwood's brands, which resulted in less end of
season markdowns.  Finally, margins were enhanced by improved sales mix, and
having less surplus and obsolete inventory to liquidate as a result of the
Company's focus on reducing inventory levels.

Selling, general and administrative expense for the fourth quarter increased
$9.5 million due to increased spending to underwrite several new marketing
growth initiatives and SG&A expense attendant with the acquisition of Briggs. 
Spending on the remaining business was essentially flat with last year.

Sales from continuing operations for the year were $2,346 million, up $180
million, or 8 percent, from $2,167 million last year.  Sales of Women's
Sportswear were up 7 percent, Men's Sportswear up 19 percent, and Other Soft
Goods up 2 percent.

Net earnings from continuing operations for the year increased 43 percent to
$72.6 million, or $2.68 per share on a diluted basis, versus $51.0 million, or
$2.05 per diluted share last year, before business and facilities realignment
costs.  Net earnings from continuing operations for lastyear including business
and facilities realignment costs were $41.3 million, or $1.66 per diluted
share.

Net earnings for the year including discontinued operations increased $29.1
million, or 69 percent, to $71.1 million, or $2.62 per diluted share, versus
$42.0 million, or $1.69 per diluted share last year.

Kellwood ended the year with a very strong balance sheet.  Total debt at January
31, 2004 was $275 million, down $31 million from last year and represented 29.9
percent of total capital versus35.3 percent last year. Strong free cash flow
and excellent working capital management enabled the Company to end the year
with $179 million of cash and time deposits. Subsequent to this year-end,
Kellwood acquired Phat Fashions and exercised their option to buy back the Phat
Farm men's sportswear license for a total cash purchase price of $140 million.

For fiscal year 2004, which ends in January 2005, sales are planned to be
approximately $2.6 billion -- up $255 million, or 11 percent.  The increase is
made up of significant organic growth along with approximately $65 million from
the Phat Fashions and Phat Farm(R) acquisition.  The organic growth will be
driven by several new and exciting branded marketing initiatives.  The new
marketing initiatives include Calvin Klein(R), IZOD(R), XOXO(R), O Oscar(TM),
Lucy Pereda(TM) sportswear, Liz Claiborne(R) dresses and suits, Dockers(R) Tops
for women, Run Athletics(TM) and Def Jam University(TM) men's sportswear. The
year-to-year sales growth from theexciting new branded marketing initiatives
will accelerate as the year unfolds with the majority of the growth coming in
the second half of the year.  Additionally, the revenue from Phat Farm(R) men's
sportswear will not commence until the Fall sellingseason.

Each year the Company examines the need to eliminate certain brands, private
label programs and products from its broad and diversified portfolio due to
volume levels, pricing, and margins that are no longer acceptable. Additionally,
Kellwood's customers may change their merchandising strategies which can result
in the loss of business.  These factors collectively will result in a planned
$75 million drop in volume in 2004, which will largely impact the first half of
2004.

Because of these factors, sales growth driven by the new marketing initiatives,
will accelerate in excess of 10 percent in the second quarter with year-to-year
growth of approximately 15 percent in the second half of the year.

Net earnings from continuing operations infiscal year 2004 are expected to
increase by approximately $17 million, or 23 percent, and be in the range of
$88-$90 million, or $3.15 - $3.25 per diluted share, versus $72.6 million, or
$2.68 per diluted share, reported in fiscal year 2003.  The year-to-year
improvement in net earnings and earnings per share in fiscal year 2004 is
expected to come from sales growth of $255 million, continued improvement in
gross profit as a percent of sales due largely to a change in sales mix to
higher priced branded business replacing lower priced and lower margin private
label business, licensing income from Phat Fashions, and sourcing more product
through Kellwood's recently established trading company (Kellwood Trading
Limited) in the Far East.  These factors should result in over one half of one
percent improvement in Kellwood's EBITDA as a percent of sales.  All of the
improvement will come from gross margin as selling, general and administration
expense as a percent of sales will increase due principally to the new marketing
initiatives and the acquisition.  The year-to-year gain in (EBITDA) as a percent
of sales is expected to occur in each quarter of the year driven by an
improvement in gross profit as a percent of sales.  The increase in EBITDA
dollars will be partially offset by an estimated $5 million increase in
amortization of intangible assets resulting from the acquisition of Phat
Fashions and Phat Farm(R), a $5 million increase in depreciation expense, and a
$6 million increase in interestexpense as the Company plans to do a long- term
financing sometime during the first half of the year.

Finally, average diluted outstanding shares will increase by approximately
800,000 shares in 2004 to 27.9 million shares.

Kellwood's first quarter ends in April and largely encompasses the Spring
shipping season.  The outlook for the first quarter calls for sales to be
essentially flat with last year and in the range of $675 million.  Growth from
the new branded marketing initiatives will be offsetby a planned reduction in
low margin private label business and Wal-Mart's decision to no longer carry the
Kathie Lee(R) brand of sportswear and dresses.

Net earnings from continuing operations are expected to increase by $3-$4
million, or 16 percent,to $24-$25 million, or approximately $0.85-$0.88 per
diluted share, versus $21.1 million, or $0.80 per diluted share last year.

The growth in net earnings in the first quarter will come from nearly a full
percentage point improvement in EBITDA as a percent of sales.  This improvement
will be driven by higher gross margin branded business partially offset by an
increase in SG&A expense in relation to sales.  Average diluted shares are
expected to increase by 1.0 million shares to 27.6 million shares in the first
quarter of 2004.

The Board of Directors declared a regular quarterly dividend of $0.16 per common
share, payable March 26, 2004 to shareholders of record March 15, 2004.

The Company will conduct a conference call on March 5 at 10:00 a.m. EST. If you
wish to participate, you may do so by dialing 212-346-6606.  You may also access
Kellwood's website at http://www.kellwood.com/ to view an updated version of
Kellwood's analyst presentation.

ABOUT KELLWOOD COMPANY

Kellwood (NYSE:KWD) is a $2.3 billion marketer of apparel and consumer soft
goods. Kellwood specializes in branded as well private label products, and
markets to all channels of distribution with product specific to a particular
channel. Kellwood brands include Phat Farm(R), Baby Phat(R), Sag Harbor(R),
Koret(R), Jax(R), David Dart(R), Democracy(R), David Meister(TM), Dorby(TM), My
Michelle(R), Briggs New York(R), Northern Isles(R), David Brooks(R), Kelty(R),
and Sierra Designs(R). Calvin Klein(R), XOXO(R), IZOD(R), Dockers(R), Liz
Claiborne(R) Dresses and Suits, Gerber(R), Slates(R) and Bill Burns(R) are
produced under licensing agreements. For more information, visit
http://www.kellwood.com/ .

Statements in this press release that are not strictly historical are
"forward-looking" statements within the meaning of the safe harbor provisions of
the federal securities laws.  Actual results may differ materially due to risks
and uncertainties that are described in the Company's Form 10-K and other filing
with the SEC.

  KELLWOOD COMPANY AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
  (Amounts in thousands, except per share data)

                          Three Months Ended       Twelve Months Ended
                       1/31/2004     2/1/2003     1/31/2004     2/1/2003
  Net sales by segment:
    Women's Sportswear  $308,192     $291,217   $1,406,296   $1,313,407
    Men's Sportswear     110,231      107,360      472,442      395,452
    Other Soft Goods     102,721      122,057      467,743      457,695
    Total net sales      521,144      520,634    2,346,481    2,166,554

  Costs and expenses:
    Cost of products
     sold                405,408      415,040    1,845,202    1,733,560
    Selling, general and
     administrative
     expenses 91,034       81,552      357,639      324,438
    Provision for
     realignment               -        1,727            -       12,086
    Amortization of
     intangible assets     2,222        1,777        9,532        5,775
    Interest expense       6,180        6,414       25,051       27,884
    Interest (income) and
     other, net           (3,160)       1,720       (1,418)         (50)

  Earnings before income
   taxes                  19,460       12,404      110,475       62,861

  Income taxes             6,665        4,038       37,838       21,598

  Net earnings from
   continuing operations  12,795        8,366       72,637       41,263

  Net earnings (loss)
   from discontinued
   operations                526        76       (1,552)         747

  Net earnings           $13,321       $8,442      $71,085      $42,010

  Weighted average
   shares outstanding:
    Basic                 26,762       25,570       26,499       24,564
    Diluted               27,562 25,869       27,100       24,872

  Earnings (loss) per share:
    Basic:
      Continuing operations $.48         $.33        $2.74        $1.68
      Discontinued
       operations            .02          .00         (.06)         .03
      Net earnings          $.50         $.33        $2.68        $1.71

    Diluted:
      Continuing operations $.46         $.33        $2.68        $1.66
      Discontinued
       operations            .02          .00         (.06)         .03
      Net earnings          $.48         $.33        $2.62        $1.69


  KELLWOOD COMPANY AND SUBSIDIARIES
  CONDENSED CONSOLIDATED BALANCE SHEET
  (Amounts in thousands)

                                                           As of
                           1/31/2004      2/1/2003
  ASSETS
  Current assets:
    Cash and time deposits                        $179,155       $210,323
    Receivables, net                               321,455        318,832
    Inventories                 315,935        350,386
    Prepaid taxes and expenses                      66,328         40,236
    Current assets of discontinued operations            -         22,354
      Total current assets                         882,873     942,131

  Property, plant and equipment, net                96,798         99,354
  Intangible assets, net                           116,102         57,975
  Goodwill                                         165,518        102,224
  Other assets     30,783         44,519
  Long-term assets of discontinued operations            -          8,376
  Total assets                                  $1,292,074     $1,254,579

  LIABILITIES AND SHAREOWNERS' EQUITY
  Current liabilities:
    Notes payable and current portion of
     long-term debt                                 $2,743        $27,232
    Accounts payable                               179,024        179,731
    Accrued expenses                               120,986        131,030
    Current liabilities of discontinued operations   2,333         14,692
      Total current liabilities                    305,086        352,685

  Long-term debt                                   271,877        278,115
  Deferred income taxes and other                   71,729         61,975
  Long-term liabilities of discontinued operations       -          2,685
  Shareowners' equity                              643,382        559,119
  Total liabilities & shareowners' equity       $1,292,074     $1,254,579


  KELLWOOD COMPANY AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
  (Amounts in thousands)

                                                    Twelve Months Ended
                                 1/31/2004      2/1/2003
  OPERATING ACTIVITIES
  Net earnings                                     $71,085        $42,010

  Add/(deduct) items not affecting operating
   cash flows:
    Depreciation and amortization                   35,938         32,008
    Non-cash portion of restructuring charge             -          6,064
    401(k) contribution previously funded            4,403          5,173
    Deferred income taxes and other                 19,364          4,314

  Changes in working capital components:
    Receivables, net                                31,563         17,205
    Inventories                                     58,158         51,167
    Prepaid taxes and expenses                     (24,718)        (3,082)
Accounts payable and accrued expenses          (37,967)        64,114
  Net cash from operating activities               157,826        218,973

  INVESTING ACTIVITIES
    Additions to property, plant and equipment     (24,074)       (14,510)
    Acquisitions, net of cash acquired            (142,975)       (18,150)
    Dispositions of fixed assets                     5,693          5,238
    Subordinated note receivable                     2,062        (11,000)

  Net cash from investing activities              (159,294)       (38,422)

  FINANCING ACTIVITIES
    Reduction of notes payable                        (636)        (6,976)
    Reduction of long-term debt                    (30,891)       (22,968)
    Stock transactions under incentiveplans        18,809          6,028
    Dividends paid                                 (16,982)       (15,551)
  Net cash from financing activities               (29,700)       (39,467)

  Net increase (decrease) in cash and time
   deposits            (31,168)       141,084
  Cash and time deposits, beginning of period      210,323         69,239
  Cash and time deposits, end of period           $179,155       $210,323

  Significant non-cash investing and financing
   activities:
    Issuance of stock for acquisitions             $11,891        $68,185

  Supplemental cash flow Information:
    Interest paid                                  $27,436        $26,411
    Income taxes paid                              $41,339        $13,597


  KELLWOOD COMPANY AND SUBSIDIARIES
  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
  (Amounts in thousands, except per share data)

  The following sets forth selected quarterly financial data for fiscal
  2003 and 2002 restated fromprevious filings to reflect the Hosiery and
  True Beauty businesses as discontinued operations.

  Quarter                 First        Second        Third       Fourth
  Fiscal 2003:
    Net sales           $672,345     $508,861     $644,131     $521,144
    Gross profit         137,564      106,830      141,149      115,736
    Net earnings from
     continuing
     operations           21,123        7,850       30,869       12,795
    Net earnings (loss)
     from discontinued
     operations    (295)      (1,164)        (619)         526
    Net earnings         $20,828       $6,686      $30,250      $13,321

    Diluted earnings
     (loss) per share:
      Continuing operations $.80         $.29        $1.13         $.46
      Discontinued
       operations           (.02)        (.04)        (.02)         .02
      Net earnings (loss)   $.78         $.25        $1.11         $.48

  Fiscal 2002:
    Net sales           $570,680     $452,614     $622,626     $520,634
    Gross profit         106,886       90,124      130,390      105,594
    Provision for
     facilities
     realignment           7,244            -        3,115        1,727
    Net earnings from
     continuing operations 8,547        3,665       20,685        8,366
    Net earnings (loss)
     from discontinued
     operations                -          261          410           76
    Net earnings          $8,547       $3,926      $21,095       $8,442
    Diluted earnings
     (loss) per share:
      Continuing operations $.37         $.15         $.80         $.33
      Discontinued
       operations              -          .01          .02            -
      Net earnings (loss)   $.37         $.16         $.82         $.33


  Note Regarding Discontinued Operations
  (Amounts in thousands, except per share data)

  On October 30, 2003, the Company finalized an agreement to sell their
  domestic and European hosiery (Hosiery) operations for $7,500 plus
  reimbursement of $2,800 for costs incurred by the Company in connection
  with the closure of certain facilities.  In addition, during the fourth
  quarter of 2003, the Company decided to discontinue their True Beauty by
  Emme(R) (True Beauty) operations.  This included the termination of the
  related license agreement before its expiration.  The operations of True
  Beauty ceased in the fourth quarter of 2003.  Accordingly, both the
  Hosiery and True Beauty businesses have been accounted for as
  discontinued operations.  As such, their operating results and assets and
  liabilities are segregated in the accompanying consolidated statement of
  earnings and consolidated balance sheet.  Prior to being classified as
  discontinued, the Hosiery operations were included in the Men's
  Sportswear segment, and True Beauty was included in the Women's
  Sportswear segment.

  The financial results for the discontinued Hosiery and True Beauty
  businesses are as follows:

  Three months ended                             1/31/2004      2/1/2003

  Net sales                                         $1,133        $16,655
  Earnings (loss) before income taxes               (9,388)           638
  Income taxes                                      (9,914)           562
  Net earnings (loss)              $526            $76


  Fiscal year ended                              1/31/2004      2/1/2003

  Net sales                                        $51,122        $38,155
  Earnings (loss) before income taxes              (12,552)     1,849
  Income taxes                                     (11,000)         1,102
  Net earnings (loss)                              $(1,552)          $747

  Recorded in income taxes is the benefit of a higher tax basis in the
  Hosiery operation's assets than that recorded for book purposes.


  RECONCILIATION OF NON-GAAP MEASURES TO REPORTED GAAP AMOUNTS

  Net earnings from continuing operations
  Before business and facilities realignment costs

                            Three Months Ended   Twelve Months Ended
                                 2/1/2003                  2/1/2003
                          $000       Diluted EPS     $000      Diluted EPS

  Net earnings from
   continuing operations  $8,366         $.33      $41,263      $1.66

  Add back: Business and
   facilities realignment
   costs, net of tax       1,287          .05        9,697          .39

  Net earnings from
   continuing operations
   and before business
   and facilities
   realignment costs      $9,653  $.38      $50,960        $2.05


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DATASOURCE: Kellwood Company



CONTACT:  Financial, Roger D. Joseph, VP Treasurer & IR, [phone],

or Fax, [phone],  , or W. Lee Capps III,

Executive VP Finance & CFO, [phone], or Fax, [phone],

 ; or Media, Donna Weaver, VP Corp. Comm., [phone], or

Fax, [phone],  , all of Kellwood Co.



Web site:  http://www.kellwood.com/ 

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