NEW YORK — Growth on both the top and bottom lines from Tommy Hilfiger allowed PVH Corp. to post second-quarter earnings 29.3 percent above year-ago levels and ahead of Wall Street’s expectations.
In the three months ended July 29, the New York-based apparel giant generated net income of $87.7 million, or $1.19 a diluted share, versus profits of $66.7 million, or 92 cents, in the 2011 quarter. Excluding special items, adjusted earnings per share was $1.25, 5 cents above both the analyst consensus estimate and the high end of PVH’s earlier guidance for EPS of $1.18 to $1.20.
Revenues in the quarter were essentially flat, rising 0.2 percent to $1.34 billion from $1.33 billion a year ago, while gross margin ascended to 55.6 percent of revenues from 54.3 percent in the comparable period last year.
Operating income for Tommy Hilfiger was up 28.5 percent on a non-GAAP basis, to $97.3 million from $75.8 million in last year’s quarter, while the brand’s revenues grew 4.2 percent to $721.9 million. Calvin Klein revenues rose 4.7 percent, to $251.2 million, while operating income declined 8.8 percent to $60.2 million.
“The strength of the Tommy Hilfiger brand was epitomized by the brand’s performance in Europe despite the ongoing economic headwinds in that region,” said Emanuel Chirico, chairman and chief executive officer of PVH. “In addition, Calvin Klein continued to post solid revenue increases in the quarter despite the soft performance of the global jeans and underwear businesses.”
Chirico added that, if not for a planned shift in advertising expenditures into the second quarter, Calvin Klein’s profitability would have improved in comparison with last year’s quarter.
The Heritage Brands group continued to struggle as revenues declined 9.5 percent, to $363.5 million, and operating profit fell 23.2 percent to $23.2 million.
Investors were encouraged by third-quarter earnings guidance of $2.20 to $2.25 a diluted share, again on a non-GAAP basis. Revenues are expected to decline 2 to 3 percent in the quarter, to between $1.6 billion and $1.62 billion, with about $100 million in top-line erosion split between negative foreign currency impacts on one hand and the exit from the Izod women’s and Timberland sportswear businesses on the other.
Prior to the earnings report, analysts expected profits of $2.21 a share, on average. Shares rose 55 cents, or 0.6 percent, to $88.49 during the trading day and prior to the earnings report. They picked up another $2.71, or 3.1 percent, to $91.20 in the first hour of after-hours trading.
PVH lifted full-year earnings guidance to a range of $6.25 to $6.32 a share from a previous range of $6.15 to $6.25, based on the second-quarter showing as well as what Chirico termed “the positive impact from lower product costs beginning with fall deliveries and our belief that the strength of our brands will continue to drive revenue and profitability increases throughout the remainder of 2012.”
In the first half, net income expanded 43.9 percent to $180.8 million, or $2.46 a diluted share, while revenues were up 2.2 percent to $2.76 billion.
PVH management will hold a conference call this morning to discuss the results and forecast.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews