Emanuel Chirico, chairman and chief executive officer of PVH, said, “Having now owned the business for about 45 days, we believe that additional investments above our initial expectations are required to achieve our goal of rebuilding the global Calvin Klein jeanswear and underwear businesses.”
He added that PVH views 2013 “as a year of investment and transition for the Warnaco business,” with specific efforts focused on infrastructure, jeanswear design and quality, and in-store marketing.
Chirico cited the need for a rationalization of global inventory levels, as well as “appropriate talent to fill key design, marketing and merchandising positions.”
PVH confirmed that Mark Whyman and Karyn Hillman, appointed at Warnaco a year ago as chief commercial officer of the Calvin Klein businesses and chief merchandising officer for Calvin Klein Jeans and Jeans Accessories, respectively, will be joining PVH’s Calvin Klein business unit. Their exact roles within the Calvin Klein structure haven’t yet been disclosed. Helen McCluskey, previously president and ceo of Warnaco, has become a director of PVH.
The Warnaco transaction is now projected to dilute 2013 earnings by about 25 cents. PVH’s preliminary guidance for the full year is for adjusted earnings per share of $7, below the $7.46 earlier projected by Wall Street.
The cautious words about Warnaco pressured PVH stock, which was down 4.6 percent, to $107.61, in early after-hours trading. Shares had shed 1 percent, to $112.79, during Wednesday’s regular session.
In its guidance, PVH said sales this year are expected to hit $8.2 billion, 35.7 percent above the 2012 level, with Warnaco’s results included for all but about two weeks of the fiscal year. The company also noted that it would relinquish about $200 million in transactions between the two companies as well as about $100 million because of the absence of a 53rd week registered in 2012.
In the fourth quarter ended Feb. 3, PVH’s net income more than doubled to $80.7 million, or $1.09 a diluted share, from $35.5 million, or 48 cents, in the prior-year period. On an adjusted basis, stripping out the effect of an accounting change, EPS was $1.60, 10 cents better than analysts, on average, had expected.
Total revenues for the quarter were up 6.7 percent to $1.64 billion from $1.53 billion in the 2012 period, just above consensus estimates for $1.6 billion in revenue. Gross margin expanded to 53.8 percent of sales from 50.5 percent a year ago.
All three PVH business units registered increases in operating income, led by Tommy Hilfiger’s 72.8 percent growth to $96.1 million as revenues were up 9.2 percent to $891.1 million. Calvin Klein logged the largest revenue increase, up 14 percent to $317.4 million, and saw a 5.2 percent increase in operating income, to $73.8 million. The heritage brands business enjoyed a turnaround with operating income soaring 178 percent to $26.6 million despite a 2.5 percent sales decline to $427.7 million.
For the full year, net income rose 57.4 percent to $433.8 million, or $5.87 a diluted share, while revenues added 2.4 percent to $5.54 billion.
The company will hold a conference call this morning to discuss the results.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion