Shares of PVH Corp. slipped in after-market trading following the firm’s update of its earnings per share guidance for the fourth quarter and fiscal year 2011, and a preliminary estimate for fiscal year 2012.
While the firm raised guidance for the fourth quarter and fiscal year 2011, investors were disappointed in the preliminary estimate for 2012.
Shares of PVH closed at $73.90, down 10 cents, in trading Wednesday, then slipped to $70.70 after its update was released.
For 2012 EPS guidance, the firm provided a preliminary estimate on a non-GAAP basis a range of $5.90 to $6.00. However, analysts were already expecting earnings of $5.97 a share before special items.
PVH also said earnings growth is expected to “occur entirely in the second half of the year.” That’s because the first half of 2012 is projected to be “disproportionately impacted by the continued pressure on gross margins, as significantly higher year-over-year product costs” began to impact the firm during the second half of 2011 and is predicted to continue into the first half of 2012. The apparel firm said it also expects negative impact from foreign currency translation to affect earnings for the first half of 2012.
For the fourth quarter ending Jan. 29, the company expects EPS in the range of $1.08 to $1.10 on a non-GAAP basis, up from previous forecast of $1.03 to $1.05. Analysts were expecting earnings of $1.07 a share before special items. On a GAAP basis, the company expects EPS between 85 cents to 87 cents, versus its prior estimate of 80 cents to 82 cents.
For fiscal year 2011, EPS on a non-GAAP basis is expected at between $5.28 to $5.30, up from $5.23 to $5.25. Analysts were expecting earnings of $5.26 a share before special items. On a GAAP basis, EPS is estimated at between $4.10 to $4.12 versus previous forecast of $4.05 to $4.07.
PVH said its updated guidance for the fourth quarter and fiscal year 2011 reflects the “continuation of strong performance in the Calvin Klein and Tommy Hilfiger businesses.” That positive news was partially offset by lower profits at its Heritage Brands sportswear businesses, the firm said.
PVH also said that fourth-quarter retail comparable-store sales, compared with the same year-ago quarter, are expected to increase 15 percent in the Calvin Klein business, 12 percent in the Tommy Hilfiger North America business and 12 percent in the Tommy Hilfiger International business.