A stronger dollar and tighter store inventories combined to pressure Phillips-Van Heusen Corp.’s first-quarter profits down by nearly half, but the firm managed to both match analysts’ expectations and eke out an increase in its revenue from the Calvin Klein brand.

This story first appeared in the May 20, 2009 issue of WWD. Subscribe Today.

For the three months ended May 3, net income fell 47.2 percent to $24.7 million, or 48 cents a diluted share, versus $46.8 million, or 90 cents, a year ago.

Total revenues fell 10.9 percent to $557.4 million from $625.7 million, including a 12.4 percent decline in sales to $475.7 million and a 1.8 percent dip in royalty revenue to $58.9 million. The drop includes the loss of $23.9 million in revenue associated with PVH’s decision to exit the Geoffrey Beene outlet store operation.

Revenues in the Calvin Klein licensing business inched up 1 percent to $75.1 million from $74.4 million. The company said global licensee royalties grew 6 percent on a constant currency basis, offset by a $3.5 million negative impact from a stronger U.S. dollar. Strong performances in jeans, footwear, dresses and underwear were partially offset by a sales reduction in the fragrance business.

“Our first-quarter performance, which had anticipated a continuation of fourth-quarter trends, was somewhat better than planned,” said Emanuel Chirico, chairman and chief executive officer.

He said the firm’s financial position is strong, with no outstanding borrowings under its revolving credit facility and no maturities of long-term debt until 2011.

“We are focused on making sure that inventory levels are in line with our customers’ sales plans and are maintaining tight controls over operating expenses,” the ceo noted.

Second-quarter earnings per share are expected to be 29 cents to 39 cents, while revenue is expected at $510 million to $520 million. Calvin Klein royalty income is projected to decline 2 to 4 percent, with 4 percent growth in royalties offset by a $3 million to $4 million negative impact because of the stronger dollar.

The company narrowed its full-year EPS guidance to a range of $1.93 to $2.18 from its previous projection of $1.88 to $2.18.

PVH will sponsor a conference call to discuss earnings today.