The Calvin Klein licensing business helped ease Phillips-Van Heusen Corp.’s third-quarter profit decline, although the company lowered full-year earnings estimates because of the strengthening dollar and the weakened global economy.
For the three months ended Nov. 2, net income fell 11.8 percent to $53.7 million, or $1.03 a diluted share, from $60.9 million, or $1.05, in the same year-ago quarter. Excluding the operating results and exit costs connected with the firm’s Geoffrey Beene outlet retail operation, earnings were $1.10 a share, exceeding analysts’ consensus estimates of $1.07 for the quarter. Total revenues for the period, including those from royalties and other sources such as advertising, rose 4.5 percent to $727.5 million from $696.4 million. Revenues included a sales gain of 4.1 percent to $636.2 million from $611.4 million.
Calvin Klein licensing revenue ended the quarter up 8.8 percent to $83.2 million from $76.5 million.
“The strength and recognition of the Calvin Klein brand across the world continued to drive revenue and earnings,” said Emanuel Chirico, chairman and chief executive officer. The revenue increase came “despite the strengthening U.S. dollar and slowing growth in international markets. Equally as important, we continue to manage our inventory tightly, with an 8 percent reduction in inventory levels excluding new businesses, which we believe positions us appropriately for the fourth quarter.”
The company cited strength in the Calvin Klein jeans and underwear businesses overseen by the Warnaco Group Inc. The wholesale and retail businesses in the quarter were propelled by the Calvin Klein men’s sportswear and retail businesses and the new Timberland wholesale men’s sportswear businesses, which offset declines in the firm’s heritage brand outlet retail businesses.
Outlet retail comparable-store sales declined 5 percent, while the Calvin Klein outlet retail business posted a comps gain of 1 percent.
Chirico said PVH was lowering full-year earnings guidance because of “recent and rapid deterioration” in the overall economic environment in the U.S. and overseas, as well as shifts in currencies.
For the full year, the company forecast earnings per share in the range of $2.71 to $2.81, compared with previous projections of $3.03 to $3.12. Excluding the Geoffrey Beene operating results and exit costs, EPS is estimated at $3 to $3.10, versus previous guidance of $3.32 to $3.41 and analysts’ consensus estimates of $3.21.
For the fourth quarter, the company’s EPS guidance is between 23 and 33 cents.
Despite the tough retail environment, Chirico said the company’s “diversified stable of brands continues to generate strong profits and cash flows.…Even in this difficult year, we expect to generate approximately $70 million of cash flow.”
In the nine months, income fell 15.2 percent to $129.7 million, or $2.48 a diluted share, from $153 million, or $2.65, in the year-ago period. Revenues gained 4 percent to $1.91 billion from $1.84 billion.
PVH ended the quarter with $197.6 million in cash, a decrease of $139.1 million from a year ago because of the completion of the firm’s $200 million stock repurchase program during the fourth quarter of 2007. PVH expects to end the year with $340 million in cash.
PVH’s owned brands also include Izod, Bass, Van Heusen and Arrow.
Assouline is paying homage to the late Azzedine Alaïa with a reprint of "Alaïa Livre de Collection.” The book is comprised of photographs of the designer's summer 1992 runway show with models Christy Turlington Burns, Naomi Campbell and Tyra Banks, pictured here at right. #wwdfashion #alaia #tyrabanks
Fall 2018 accessories take on a painterly hue, with Nebulas Blue among Pantone’s top 10 colors of the season. (📸: @jonghyupstudio ; editor: @twallz21 ; stylist and set designer: @haideefindlaylevin ) #wwdaccessories
@americanapparelusa is relaunching the brand outside of the U.S. today, opening its online store to more than 200 countries. The company is also contemplating a return to brick-and-mortar, though details have not been confirmed. In tandem with the expanded distribution is a recasting of a social media ad campagn, called “Back to Basics,” pictured here, with a focus on diversity and a cast of models above the age of 21. Read more on WWD.com #wwdnews #wwdfashion
Exclusive: @britneyspears is continuing to expand her brand. The pop icon, who appears in @kenzo ’s latest campaign, is partnering with Epic Rights to launch a line of branded merchandise. Read @hernameislex ‘s story, link in bio. #wwdnews #britneyspears
The Duchess of Cambridge channeled Princess Diana’s look upon giving birth to Prince Harry, when she and the Duke of Cambridge departed the hospital with the new baby Prince this afternoon in London. #wwdeye #princeofcambridge
The new Prince of Cambridge has arrived! The Duke and Duchess of Cambridge posed with the 8-pound newborn. She wore a look from one of her go-to designers, @jennypackham. Tap link in bio for more. #wwdeye #princeofcambridge
Jewelry label @alisonlou has made a name for itself with fine jewelry that speaks to the Millennial market. Now @twallz21 reports that the label is bringing those playful ideas to a new affordable line of lucite hoops with the launch of Loucite by Alison Lou. Here’s a look from the line modeled by @emrata. #wwdaccessories
@sarahjessicaparker and @gilt are teaming up on a bridal ready-to-wear line. Tomorrow, Parker will launch SJP by Sarah Jessica Parker Bridal — and as part of the launch, Gilt will offer 15 exclusive styles from the SJP by Sarah Jessica Parker footwear collection that were designed to complement the new line. Made out of 10 styles, the line is designed for a variety of occasions, from bridal showers to receptions. Get more details on WWD.com #wwdfashion