HILFIGER QUARTER NET SOARS 31.4%
NEW YORK — While launching its licensed women’s casualwear line in 400 stores this quarter, Tommy Hilfiger Corp. obviously was also paying attention to the rest of its business. The firm reported Monday that earnings jumped 31.4 percent in the second quarter ended Sept. 30, smashing Wall Street estimates once again.
Hilfiger earned $24.1 million, or 63 cents a share, up from $18.2 million, or 49 cents, a year ago, and above Wall Street’s average estimate of 58 cents. Hilfiger has consistently surpassed Wall Street estimates since going public in October 1992.
Sales rose 35.5 percent to $178.9 million from $132 million.
Reacting to the solid performance, Hilfiger stock gained 1 5/8 to close at 55 3/8 on the New York Stock Exchange Monday. On Tuesday, the stock closed up 1/8 at 55 1/2.
“The second quarter demonstrates our commitment to expand our consumer base and build Tommy Hilfiger into a global lifestyle brand,” said Joel J. Horowitz, chief executive officer, in a statement.
Horowitz called marketing “a major focus” of the quarter. Hilfiger launched new advertising campaigns for its men’s and boys’ sportswear and licensed products, with particular emphasis placed on the women’s casualwear line and the new Tommy Girl women’s fragrance being done by Estee Lauder Cos. The women’s fragrance has a 925-door distribution.
As reported, the women’s casualwear line is expected to generate wholesale volume of $100 million in its first year. It is licensed to Pepe Jeans, the London-based affiliate of Tommy Hilfiger.
Hilfiger’s higher revenues in the second quarter, Horowitz noted, stemmed from the continued rollout and expansion of in-store shops. He also said the firm has “continued to see a healthy increase in sales for our men’s and boy’s sportswear.”
The company added 66 men’s in-store shops during the second quarter, bringing the total to 977. This includes 21 New Generation shops, four of which were added during the quarter.
Also contributing to the volume gain were sales from outlets and specialty stores as well as higher licensing royalties and buying office commissions.
Gross margins improved to 47.9 percent of sales from 45.2 percent, offsetting an increase in selling, general and administrative expenses to 30.4 percent of sales from 28.2 percent. Operating earnings climbed 40.3 percent to $52.9 million from $37.7 million.
“Also during the quarter we launched globally our licensed men’s fragrance Tommy, paving the way for the eventual international rollout of our sportswear line,” Horowitz said.
She added that Hilfiger’s next legs of growth — its expansion into Europe and new product lines, including infants’ and toddlers’ wear — will push the company even further.
For the six months, earnings gained 41 percent to $36.7 million, or 97 cents, from $26 million, or 70 cents. Sales jumped 36.8 percent to $303 million from $221.5 million.