Tommy Hilfiger & CK continue to outperform globally, PVH
PVH Corp. reported 2011 second quarter and year to date results.
Overview of Second Quarter Results:
• Earnings per share was $1.07 on a non-GAAP basis, which exceeded the Company's guidance and the Consensus estimate and represents an increase of 39% over the prior year's second quarter non-GAAP earnings per share of $0.77.
• GAAP earnings per share was $0.92, which exceeded the Company's guidance. GAAP loss per share in the prior year's second quarter was $(1.07).
• Revenue increased $231.2 million, or 21%, to $1,334.4 million over the prior year's second quarter revenue of $1,103.3 million. The revenue increase is attributable to (i) an increase of $160.7 million, or 30%, in the revenue of the Company's Tommy Hilfiger business; (ii) an increase of $38.1 million, or 19%, in the revenue of the Company's Calvin Klein business; and (iii) an increase of $32.4 million, or 9%, in the revenue of the Company's Heritage Brands business.
• Earnings before interest and taxes on a non-GAAP basis increased 24% to $151.4 million, despite the anticipated gross margin pressures. This increase was driven by the Company's 21% revenue growth over last year's second quarter reflecting strong performance across all businesses.
• GAAP earnings before interest and taxes improved to $133.5 million from a GAAP loss before interest and taxes of $(44.1) million in the prior year's second quarter, primarily due to a decrease in one-time costs associated with the acquisition and integration of Tommy Hilfiger and the related restructuring. Revenue growth as discussed above was also a contributing factor to the increase, partially offset by gross margin pressures.
Second Quarter Business Review:
The Calvin Klein business maintained its growth trajectory during the quarter, with revenue increasing 19% over the prior year's second quarter to $239.9 million, as all divisions continued to perform very well. Retail comparable store sales growth of 21% outperformed the Company's expectations. This, combined with strong revenue growth at wholesale, propelled the Company's combined Calvin Klein wholesale and retail businesses to post an overall 21% increase in revenue as compared to the prior year's second quarter. The brand also continued to experience global growth, with royalty revenue increasing 12% as compared to the prior year's second quarter. The royalty growth was attributable to continued strong performance across virtually all product categories and regions. The weaker U.S. dollar had a benefit on the royalty revenue in the Calvin Klein business of approximately $3 million versus the prior year's second quarter.
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Commenting on these results, Emanuel Chirico, Chairman and Chief Executive Officer, noted, "Our second quarter results reflect the continued strength and momentum in our Calvin Klein and Tommy Hilfiger businesses, which again allowed us to exceed both our revenue and earnings guidance for the quarter. Trends in both the Calvin Klein and Tommy Hilfiger businesses globally demonstrate how powerful brand appeal translates into strong performance across product categories, distribution channels and geographies. As such, we continue to invest in marketing to broaden the reach of the Calvin Klein and Tommy Hilfiger brands worldwide."