Propelled by ongoing growth at Calvin Klein and the addition of Tommy Hilfiger, Phillips-Van Heusen Corp. Tuesday said it swung back to a first-quarter profit as total revenues more than doubled.
This story first appeared in the June 1, 2011 issue of WWD. Subscribe Today.
For the three months ended May 1, net income was $57.7 million, or 79 cents a diluted share, against a loss of $27.6 million, or 53 cents, last year. Excluding adjustments, such as expenses for the Tommy Hilfiger acquisition in both periods, income was $89.6 million, or $1.23 a diluted share, 7 cents better than analysts expected, versus $44.8 million, or 83 cents, in last year’s quarter.
Total revenue more than doubled to $1.37 billion from $619 million. Hilfiger contributed $701.3 million in sales and $11.9 million in royalty revenue. Calvin Klein sales rose 20.2 percent to $153.9 million as royalties picked up 10.1 percent to $65.8 million. Heritage brands overall contributed $408.1 million, down 0.2 percent.
PVH completed the acquisition of Hilfiger in May 2010, after the end of its fiscal first quarter.
Emanuel Chirico, chairman and chief executive officer of PVH, said positive business trends in the Tommy Hilfiger and Calvin Klein businesses accelerated in the first quarter. He also noted that the firm amended its credit facility during the period, giving PVH reduced borrowing rates and flexibility regarding voluntary repayments.
“As we look forward to the balance of 2011, we believe that the momentum of the Calvin Klein and Tommy Hilfiger brands around the world will continue to drive our revenue and profitability growth,” Chirico said.
The company projected second-quarter earnings at between 79 cents and 81 cents a share, versus a year-ago second-quarter loss of 83 cents. It expects revenue for the Tommy Hilfiger business to grow 23 to 26 percent, or to $655 million to $670 million, revenues for the Calvin Klein business to rise 9 to 10 percent and for the Heritage brands to rise 5 to 6 percent.
For the year, earnings per share is estimated at between $4.08 to $4.28, compared with 80 cents a year ago. Revenue in 2011 is projected at between $5.7 billion to $5.8 billion, or an increase of 23 to 24 percent from 2010. Hilfiger revenues are projected at $2.91 billion to $2.94 billion, compared to $1.95 billion in Hilfiger revenue during the nine months PVH owned the brand following the acquisition last year.
The company will hold a conference call today to discuss the quarterly results.