PVH Swings into Q1 Profit, But Misses Estimates, Forecasts

In What's New, Industry News by Jeff Prine

Summer at Calvin Klein

Summer at Calvin Klein

New York—PVH Corp. reported late Wednesday a fourth quarter profit and sales rise that missed expectations, sinking the apparel and accessories maker’s shares in trading today.

For the quarter ended May 4, PVH posted net income of $35.3 million, or 42 cents a share, compared to a net loss of $10.3 million, or 13 cents a share, for the year-ago quarter. Excluding items, adjusted net income was $122.1 million, or $1.47 a share. But analysts’ average estimate had expected $1.49 a share.

Lowers Full Year Forecast

Total revenue rose 3% to $1.96 billion from $1.91 billion in the same quarter last year, missing analysts’ consensus of $1.98 billion.

PVH said it swung to a first quarter profit, helped mainly by lower acquisition, integration and restructuring costs.

“We are pleased with our first quarter results, which were in line with our expectations, despite the unseasonably cool weather in North America and the volatility experienced in the global retail environment in the first quarter,” said Chairman/CEO Emanuel Chirico.

“Unfortunately, the challenging macroeconomic environment has continued into the second quarter, with heightened promotional activity across the North American retail landscape. As such, we believe our North American businesses will experience margin pressure in the second quarter and we have lowered our full year earnings per share guidance to reflect this.”

By division, Tommy Hilfiger rose 6% year-over-year to $862 million, with Tommy Hilfiger North America revenue up 5% and Tommy Hilfiger International revenue up 8%.

Revenue for Calvin Klein grew 9% to $665 million, while total revenue for the Heritage Brands business fell 11% to $436 million.

Looking ahead, PVH forecast revenue of about $2 billion and adjusted earnings of $1.40 to $1.45 a share. Analysts currently expect the company to earn $1.48 a share on revenue of $2 billion for the second quarter.

For the full year, the company still forecasts revenue of about $8.5 billion, but lowered its adjusted earnings outlook to a range of $7.30 to $7.40 a share from its prior outlook of $7.40 to $7.50 per share.

Analysts’ estimate expected PVH to earn $7.51 a share on revenue of $8.50 billion for the fiscal year 2014.



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