The Calvin Klein business was the fourth-quarter superstar at Phillips-Van Heusen Corp., which managed to drive net income up 13.4 percent despite weakness in the group’s other wholesale and retail businesses.
This story first appeared in the March 25, 2008 issue of WWD. Subscribe Today.
“Calvin Klein continues to exhibit strength both domestically and internationally and is driving our revenue and earnings growth,” said Emanuel Chirico, chairman and chief executive officer. “There continues to be high global demand for our Calvin Klein brand, and this demand continues to grow as we enter into additional markets, such as China, India and Russia, and new product categories, such as cosmetics.”
Profits in the quarter advanced to $30.3 million, or 55 cents a diluted share, from $26.8 million, or 47 cents, a year ago. Total revenues for the three months ended Feb. 3 rose 4.9 percent to $584.5 million from $557 million, which included a 4 percent gain in wholesale sales to $507 million.
For the year, earnings shot up 30 percent to $183.3 million, or $3.21 a diluted share, on a 16 percent rise in revenues to $2.43 billion.
In the quarter, operating earnings for the firm’s Calvin Klein licensing segment increased 37 percent to $33.4 million on a 14.2 percent rise in revenues to $70 million.
Chirico said the company would continue to keep “international growth opportunities at the forefront of our strategy.”
Some of those initiatives include Izod women’s sportswear, Calvin Klein specialty stores and Timberland men’s sportswear. About 25 percent of the firm’s consolidated earnings before interest and taxes are generated internationally, “driven by a significant international component of the Calvin Klein licensing business,” Chirico said.
Earnings per diluted share are slated to rise to $3.30 to $3.40 in 2008 on a projected sales gain of 7 to 8 percent to $2.6 billion.
Also on Monday, PVH said it inked a licensing deal with Arvind Mills to produce and market Izod-branded apparel in India. Under the new license, Arvind can distribute the goods both at wholesale and through Izod-branded stores. Arvind was founded in 1931, and also has a joint venture with VF Corp. to sell that company’s Wrangler, Lee, Nautica, and Kipling brands on the subcontinent.