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PVH Profits Surge 50.7%, Guidance Raised for 2005

Phillips-Van Heusen Corp. on Monday raised its 2005 earnings per share guidance after posting third-quarter results that beat Wall Street's consensus estimate.

NEW YORK — Phillips-Van Heusen Corp. on Monday raised its 2005 earnings per share guidance after posting third-quarter results that beat Wall Street’s consensus estimate.

For the three months ended Oct. 30, net income jumped 50.7 percent to $40.3 million, or 73 cents a diluted share, from $26.7 million, or 52 cents, in the same year-ago quarter.

Excluding adjustments for restructuring and other items last year, earnings were $30.6 million.

Total revenues rose 12.6 percent to $533.2 million from $473.5 million, which included an 11.6 percent jump in sales to $471.8 million from $422.7 million, and the balance representing a 20.9 percent gain in royalty and other income to $61.4 million from $50.8 million.

For the nine months, income skyrocketed 114.8 percent to $88.8 million, or $1.44 a diluted share, from $41.3 million, or 79 cents, last year. Excluding charges for restructuring and other items, net income was $55.9 million. Total revenues were up 18 percent to $1.45 billion from $1.23 billion, which included an 18 percent increase in sales to $1.29 billion from $1.1 billion and the balance representing an 18.2 percent gain in royalty and other income to $156.3 million from $132.3 million.

The company said it saw significant revenue growth in the dress shirt and sportswear businesses. Growth in the dress shirt category was driven by incremental sales added by new Chaps, Sean John and Donald J. Trump Signature Collection lines, as well as strong performances by the company’s core brands.

In sportswear, growth was driven by the Calvin Klein men’s better sportswear collection and the Izod brand. It added that gains in Calvin Klein licensing revenues and in the continued rollout of Calvin Klein outlet stores in premium outlet malls also contributed to growth in the quarter.

“We are extremely pleased that the company has maintained its positive business momentum through the first nine months of the year. This is especially encouraging given that there was a backdrop of uncertainty leading into the third quarter concerning the overall economic environment and consumer spending,” said Mark Weber, chief executive officer, in a statement.

Weber said the Calvin Klein licensing business continues to be a key driver in the growth of the company. During the quarter it announced several new licensing agreements.

“These include Markwins for a line of color cosmetics and skin care products under the ck Calvin Klein Beauty brand; G-III Apparel for women’s better suits, and Fratini for men’s and women’s CK/Calvin Klein sportswear in Europe,” Weber said.

Given the company’s third-quarter performance and momentum that is carrying into the fourth quarter, PVH raised its 2005 EPS guidance, excluding the costs of a secondary common stock offering, to $1.90 from a previous guidance range of $1.75 to $1.80. It is projecting fourth-quarter EPS to be 28 cents. Full-year 2005 revenues are projected between $1.9 billion to $1.91 billion.

For 2006, the company said it believes EPS will grow to between $2 and $2.10, which includes the impact of expensing stock options. Revenue growth is projected at between 4 and 5 percent.

“Overall, we feel good about our business performance and our ability to achieve our earnings growth targets in the fourth quarter and beyond,” Weber said.