Phillips-Van Heusen Corp. posted a 20 percent jump in third-quarter earnings, driven by strong sales in its Calvin Klein licensing business.
For the three months ended Nov. 4, net income rose to $60.9 million, or $1.05 a diluted share, from $50.8 million, or 89 cents, in the year-ago period on sales that climbed 22 percent to $611.4 million from $500.2 million.
For the nine-month period, earnings grew 25 percent to $153 million, or $2.65 a diluted share, from $122 million, or $2.16, in last year's period. Sales for the period increased 20 percent to $1.62 billion from $1.36 billion last year.
Revenue increased 29 percent in the Calvin Klein licensing business due to continued strength across all product categories, with fragrances, jeans and underwear performing exceptionally well, the company said in a statement.
During the quarter, Phillips-Van Heusen launched its Calvin Klein Man fragrance. The firm also saw continued success in sales of the men's and women's CKIN2U and euphoria fragrance lines.
"Our revenue and earnings were also positively impacted by strong performances in our dress shirt and newly acquired neckwear business, which continues to exceed our expectations," said Emanuel Chirico, chairman and chief executive officer, in a statement. "Just as important, we were aggressive in driving promotional selling in our heritage brand sportswear and outlet retail businesses in order to keep inventories clean heading into the fourth quarter and next year."
The company raised its full-year earning's guidance to $3.16 to $3.18 a diluted share, from a previous outlook of $3.15 to $3.17 a share. Fourth-quarter earnings are expected to be in the range of 51 cents to 53 cents a diluted share. Guidance was below Wall Street expectations.
The company said its earnings estimates "reflect a cautious view of 2008 and a belief that the current difficult economic environment will continue into next year."
"We remain focused on the growth opportunities at Calvin Klein and our new initiatives, including Izod women's sportswear — which has been performing well since our launch at the end of the second quarter of 2007 — Calvin Klein specialty retail, and our forthcoming launch of Timberland men's sportswear in fall 2008," Chirico added.A conference call is scheduled for today.
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