NEW YORK — Phillips-Van Heusen Corp. on Wednesday posted first-quarter results that beat Wall Street's estimates by 3 cents, ending Bruce Klatsky's run as chief executive on a high note.
The company posted income of $25 million, or 46 cents a diluted share, versus $1.6 million, or a loss of 12 cents a share due to preferred stock dividends, in the same year-ago quarter. Excluding restructuring charges in the year-ago period, income was $11.1 million, or 18 cents a diluted share.
Total revenues for the quarter gained 24.8 percent to $472.1 million from $378.2 million, which included a 25.7 percent jump in sales to $423.1 million from $336.6 million. Part of the balance in revenue gain came from a 17.6 percent rise in royalty income.
During a conference call with analysts and investors, Klatsky, chairman and ceo, noted that the company has a new agreement with its licensee in Europe for bridge sportswear and accessories. As reported, the agreement is with an affiliate of Italian manufacturer Fingen SpA, and calls for the reintroduction of CK Calvin Klein apparel and accessories in Europe and the Middle East starting next spring.
"We are thrilled with the agreement ... and think this will play a major role in our continued growth of the Calvin Klein brand that consumers use around the world. This will be a large range of sportswear products in Europe and the Mideast that will be accompanied over the next five years with the opening of at least 15 retail shops," Klatsky said.
The chairman said the Calvin Klein business has the potential of generating between "$5 billion and $6 billion [worth] of global revenues over the course of the next five years or so."
Company executives said they see an "appetite" for the Calvin Klein brand, and that the addition of categories to the men's and women's businesses, whether in footwear or coats or accessories, will "make this brand even stronger."
The company said the women's Calvin Klein line, which Kellwood licenses, got off to a "rocky start" when projections were higher than PVH thought they should have been, which necessitated some markdowns to get the inventories back in line. Since then, there's been a focus on casual women's sportswear at lower price points.Regarding spring, sales were better than last year.
As previously reported, Mark Weber, a 25-year veteran of PVH, will assume the ceo role when Klatsky retires on June 14, the day of PVH's annual shareholders' meeting.
Weber has been PVH's president and chief operating officer. Klatsky will stay on as chairman for one year. In another change, also effective June 14, Emanuel Chirico, 47, executive vice president and chief financial officer, will become president and chief operating officer.
A research note from Lee Backus, of Buckingham Research, referred to the changing of the guard as a nonevent. "The strong momentum in PVH's business combined with the strong management team Mr. Klatsky is leaving behind should make for a very smooth transition," Backus wrote.
The analyst noted that "most of the Calvin Klein licenses seem to be meeting or exceeding plan. The launch of accessories and the new Calvin Klein fragrance, both in the second half, should provide further growth drivers."
PVH is projecting second-quarter earnings per share of 38 cents to 39 cents on a revenue base estimated at $420 million to $425 million.
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