PVH Profit Tops Estimates; Provides Weak Outlook

(RTTNews) - Apparel company PVH Corp (PVH), on Wednesday reported a swing to profit in the fourth quarter, driven by some growth in North America for Tommy Hilfiger and Calvin Klein brands as well as a tax benefit, largely offset by expenses and foreign currency headwinds. Quarterly earnings topped Wall Street estimates, while sales fell shy of expectations.

PVH provided a lackluster guidance for the first quarter and full year of 2015, citing unfavorable currency impact and weakness in its Russian businesses.

The fourth-quarter results came about despite the tough market conditions and foreign currency headwinds, said CEO Emanuel Chirico in a statement.

Chirico said that despite the impact from a strong U.S. dollar, Calvin Klein and Tommy Hilfiger would continue to perform well.

PVH shares gained 1.3 percent in after-hours trade on the New York Stock Exchange.

PVH, based in New York, reported fourth-quarter net earnings of $51.5 million or $0.62 per share, compared with a loss of $37.5 million or $0.46 per share last year.

Results for the latest quarter included an income tax benefit of $77.3 million, while the prior year recorded an expense of $152.2 million.

Excluding items, adjusted earnings for the quarter were $1.76 per share, compared with earnings of $1.43 per share a year ago.

On average, 18 analysts polled by Thomson Reuters estimated earnings of $1.73 per share for the quarter. Analysts' estimates typically exclude special items.

The company said its sales for the quarter rose 1 percent to $2.07 billion from $2.05 billion in the prior year. Thirteen analysts had a consensus sales estimate of $2.10 billion for the quarter.

On a constant currency basis, sales for the quarter were up 5 percent.

Among brands, sales grew 2 percent for both Calvin Klein and Tommy Hilfiger brands, while Heritage Brands fell 3 percent.

Meanwhile, selling and general expenses for the quarter were higher at $1.07 billion, compared with $909.5 million last year.

For the first quarter, PVH expects adjusted earnings of $1.35 to $1.40 per share and sales to drop 6 percent from the prior-year quarter. Analysts currently expect earnings of $1.52 per share and sales to fall 0.2 percent.

For the full year 2015, PVH expects adjusted earnings of $6.75 to $6.90 per share and sales to decline 4% from the prior year. Analysts currently expect earnings of $7.37 per share on flat sales.

PVH said its guidance includes a negative foreign currency impact of $0.30 per share for the first quarter, and $1.30 per share for the full year.

PVH closed Wednesday at $104.03, up $0.45 or 0.43%, on a volume of 2.2 million shares on the NYSE. In after hours, the stock gained $1.37 or 1.32% at $105.40.