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Phillips-Van Heusen revises full year 2008 earnings guidance
19 Nov '08
5 min read
Net interest expense in the third quarter increased as a result of the Company utilizing $200 million of cash during the fourth quarter of 2007 to repurchase approximately 5.2 million shares of common stock. This, coupled with lower investment rates, reduced interest income. Offsetting this negative impact was a planned decrease in the effective tax rate for the quarter as compared to the prior year due to certain discrete tax items in the third quarter of 2008.
Nine Months Results
For the nine months, total revenue on a GAAP basis increased 4% to $1,914.1 million in 2008 from $1,840.7 million for the same period in 2007, driven by revenue growth of 18% in the Company's Calvin Klein licensing business.
For the nine months in 2008, earnings grew 21% in the Company's Calvin Klein licensing business, which partially offset earnings decreases in the Company's heritage brand outlet retail and wholesale sportswear businesses. Earnings for the nine months in 2008 were also negatively impacted by $12 million of start-up costs in the first half of the year associated with the Company's Timberland wholesale men's sportswear business and Calvin Klein specialty retail stores, an increase of approximately $6 million, or $0.08 per share, compared to $6 million of start-up costs for these businesses in the prior year's nine months.
Balance Sheet
The Company ended the third quarter with $197.6 million in cash, a decrease of $139.1 million from the prior year's third quarter. This decrease was driven by the completion of the Company's $200 million stock repurchase program during the fourth quarter of 2007.
Inventories decreased 1% from the prior year's third quarter. Inventories at the end of the third quarter of 2008 include an increase of $23 million, or 7%, related to the new Timberland wholesale men's sportswear business, the opening of additional Calvin Klein specialty retail stores and the recently-acquired Calvin Klein Collection wholesale business. Excluding this increase, inventories were down 8%, which reflects the Company's continued focus on aggressively managing inventory levels.
Trade receivables ended the quarter 14% above the prior year due principally to the new Timberland wholesale men's sportswear business and the recently-acquired Calvin Klein Collection wholesale business. Receivables are current and the Company has not experienced a slowing of collections.
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Nine Months Results
For the nine months, total revenue on a GAAP basis increased 4% to $1,914.1 million in 2008 from $1,840.7 million for the same period in 2007, driven by revenue growth of 18% in the Company's Calvin Klein licensing business.
For the nine months in 2008, earnings grew 21% in the Company's Calvin Klein licensing business, which partially offset earnings decreases in the Company's heritage brand outlet retail and wholesale sportswear businesses. Earnings for the nine months in 2008 were also negatively impacted by $12 million of start-up costs in the first half of the year associated with the Company's Timberland wholesale men's sportswear business and Calvin Klein specialty retail stores, an increase of approximately $6 million, or $0.08 per share, compared to $6 million of start-up costs for these businesses in the prior year's nine months.
Balance Sheet
The Company ended the third quarter with $197.6 million in cash, a decrease of $139.1 million from the prior year's third quarter. This decrease was driven by the completion of the Company's $200 million stock repurchase program during the fourth quarter of 2007.
Inventories decreased 1% from the prior year's third quarter. Inventories at the end of the third quarter of 2008 include an increase of $23 million, or 7%, related to the new Timberland wholesale men's sportswear business, the opening of additional Calvin Klein specialty retail stores and the recently-acquired Calvin Klein Collection wholesale business. Excluding this increase, inventories were down 8%, which reflects the Company's continued focus on aggressively managing inventory levels.
Trade receivables ended the quarter 14% above the prior year due principally to the new Timberland wholesale men's sportswear business and the recently-acquired Calvin Klein Collection wholesale business. Receivables are current and the Company has not experienced a slowing of collections.
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Phillips-Van Heusen
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