Phillips-Van Heusen Corp. on Tuesday reported an 8.7 percent gain in first-quarter profits, propelled by a 16.9 percent increase in revenues that included a 37 percent jump in Calvin Klein royalty income.
NEW YORK — Phillips-Van Heusen Corp. on Tuesday reported an 8.7 percent gain in first-quarter profits, propelled by a 16.9 percent increase in revenues that included a 37 percent jump in Calvin Klein royalty income.
For the three months ended May 6, income was $53 million, or 92 cents a diluted share, compared with $45.5 million, or 87 cents, in the year-ago quarter. Earnings per diluted share were 7 cents ahead of the company's previous earnings guidance, and also beat Wall Street's expectations by 6 cents. The year-ago quarter's results included a pre-tax gain of $31.4 million associated with the sale by the company on Jan. 31, 2006, of minority interests in certain entities that operate licensed Calvin Klein jeans and sportswear businesses in Europe and Asia.
Total revenues for the quarter were $591.9 million, compared with $506.4 million a year ago. Revenues included a 14.6 percent jump in sales, to $520.5 million; a 30.2 percent gain in royalty income, to $51.6 million, and a 57.3 percent climb in advertising and other revenues, to $19.8 million. The growth in the Calvin Klein royalty revenue was partly offset by a decrease in gross margin in the company's wholesale sportswear business, which was hurt by broad weaknesses in the retail environment, the company said.
PVH raised full-year 2007 diluted EPS guidance to between $3.06 and $3.10 from its previous estimate of between $3 and $3.06.
"Despite the challenges the overall retail environment has been experiencing, we were able to exceed our previous earnings guidance,'' Emanuel Chirico, chief executive officer, said in a statement. "Our diversification strategy of marketing our nationally recognized brands across multiple channels of distribution is working and continues to benefit our bottom line. The global demand for the Calvin Klein brand continues to grow as we add new product categories and enter new markets. This comes in addition to strong growth in the Calvin Klein brand's largest businesses — fragrance, jeans and underwear.'
The company said that the increase in revenue in PVH's Calvin Klein licensing business was driven by "excellent performance in the fragrance business, which experienced the successful global launch of the new ckIN2U fragrance line for both men and women, as well as the continued strength in sales of both the men's and women's Euphoria line.'