A stronger dollar and tighter store inventories combined to pressure Phillips-Van Heusen Corp.’s first-quarter profits down by nearly half, but the firm managed to both match analysts’ expectations and eke out an increase in its revenue from the Calvin Klein brand.
For the three months ended May 3, net income fell 47.2 percent to $24.7 million, or 48 cents a diluted share, versus $46.8 million, or 90 cents, a year ago.
Total revenues fell 10.9 percent to $557.4 million from $625.7 million, including a 12.4 percent decline in sales to $475.7 million and a 1.8 percent dip in royalty revenue to $58.9 million. The drop includes the loss of $23.9 million in revenue associated with PVH’s decision to exit the Geoffrey Beene outlet store operation.
Revenues in the Calvin Klein licensing business inched up 1 percent to $75.1 million from $74.4 million. The company said global licensee royalties grew 6 percent on a constant currency basis, offset by a $3.5 million negative impact from a stronger U.S. dollar. Strong performances in jeans, footwear, dresses and underwear were partially offset by a sales reduction in the fragrance business.
“Our first-quarter performance, which had anticipated a continuation of fourth-quarter trends, was somewhat better than planned,” said Emanuel Chirico, chairman and chief executive officer.
He said the firm’s financial position is strong, with no outstanding borrowings under its revolving credit facility and no maturities of long-term debt until 2011.
“We are focused on making sure that inventory levels are in line with our customers’ sales plans and are maintaining tight controls over operating expenses,” the ceo noted.
Second-quarter earnings per share are expected to be 29 cents to 39 cents, while revenue is expected at $510 million to $520 million. Calvin Klein royalty income is projected to decline 2 to 4 percent, with 4 percent growth in royalties offset by a $3 million to $4 million negative impact because of the stronger dollar.
The company narrowed its full-year EPS guidance to a range of $1.93 to $2.18 from its previous projection of $1.88 to $2.18.
PVH will sponsor a conference call to discuss earnings today.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast