PVH Profit Climbs 17%

(RTTNews) - Apparel maker PVH Corp. (PVH) said Monday after the markets closed that its third quarter profit rose 17% from last year, as revenue surged due to the acquisition of its former licensee Warnaco Group, Inc earlier this year in addition to strong performance of its Tommy Hilfiger and Calvin Klein brands.

The company's quarterly earnings per share, excluding items, also came in above Wall Street expectations as did its quarterly revenue.

At the same time, the company forecast fourth quarter earnings below analysts' current consensus estimate, but reaffirmed its fiscal year 2013 earnings outlook.

Emanuel Chirico, PVH Chairman and Chief Executive Officer, said, "Despite the difficult market environment, our third quarter results exceeded our expectations, driven by the strength of our Calvin Klein and Tommy Hilfiger businesses. In the third quarter, we continued to be pleased with the performance of our newly acquired Calvin Klein businesses in Asia and Brazil, as well as our global underwear business. However, our Calvin Klein jeans business, particularly in North America and Europe, continues to underperform and be an area of management focus, investment and repositioning."

PVH shares are currently losing 0.10% in after hours trading after closing the day's regular trading session at $127.43, down $2.68 or 2.06%. The shares trade in a 52-week range of $102.72 to $135.43.

Third quarter revenue from the company's Tommy Hilfiger business, which was acquired in May 2010, rose 10% year-over-year to $921 million, with Tommy Hilfiger North America business up 10% and Tommy Hilfiger International business up 11%.

Revenue for the company's Calvin Klein business jumped 150% to $800 million in the third quarter, driven mainly by the Warnaco acquisition. PVH completed the acquisition of Warnaco Group on February 13.

Total revenue for the Heritage Brands business increased 10% to $539 million in the third quarter, due mainly to the addition of $78 million of revenue related to Warnaco's Speedo swimwear and Warner's and Olga women's intimate apparel businesses.

For the third quarter ended November 3, 2013, the New York-based company, which was formerly known as Phillips-Van Heusen Corp. and changed its name to PVH Corp. in June 2011, reported net income of $196.7 million or $2.37 per share, compared to $167.7 million or $2.27 per share for the year-ago quarter.

Excluding items, adjusted net income for the third quarter was $190.8 million or $2.30 per share, compared to $175.8 million or $2.38 per share in the prior year quarter.

On average, 18 analysts polled by Thomson Reuters expected the company to earn $2.24 per share for the third quarter. Analysts' estimates typically exclude special items.

Total revenue for the third quarter rose 38% to $2.26 billion from $1.64 billion in the same quarter last year. Twelve analysts had a consensus revenue estimate of $2.22 billion for the third quarter.

Looking forward to the fourth quarter, the company forecasts revenue of about $2.08 billion and adjusted earnings of about $1.40 per share. Analysts currently expect the company to earn $1.53 per share on revenue of $2.14 billion for the fourth quarter.

The company said it now expects fiscal 2013 adjusted revenue to be about $8.24 billion, slightly down from its prior expectations of $2.25 billion. The company also said it continues to expect fiscal 2013 adjusted earnings of about $7.00 per share. Analysts currently expect the company to earn $7.07 per share on revenue of $8.26 billion for the fiscal year 2013.

"Despite our better than expected third quarter results, we believe the current holiday season will be very competitive and highly promotional. As a result, we believe it is prudent to maintain our full year earnings per share guidance of $7.00," said PVH CEO Chirico.