Outperformance of the Tommy Hilfiger business, PVH
Phillips-Van Heusen Corporation reported 2010 third quarter and year to date results.
For the Third Quarter of 2010:
• Earnings per share on a non-GAAP basis was $1.55, which exceeded the Company's guidance and the consensus estimate and represents a 44% increase compared to the prior year's third quarter non-GAAP earnings per share of $1.08.
• GAAP earnings per share was $1.12, which exceeded the Company's guidance and represents a 29% decrease compared to the prior year's third quarter GAAP earnings per share of $1.58.
• Revenue was $1,516.4 million, as compared to the prior year's third quarter revenue of $697.4 million and which exceeded the Company's guidance. The revenue increase of $819.0 million was driven by (i) $708.4 million of revenue attributable to the Company's Tommy Hilfiger business; and (ii) a combined $110.6 million or 16% increase in the revenue of the Company's Calvin Klein and Heritage Brands businesses.
Commenting on these results, Emanuel Chirico, Chairman and Chief Executive Officer, noted, "We are extremely pleased with our strong performance in the third quarter, which enabled us to again exceed our guidance. Positive business trends across our Heritage Brands and Calvin Klein businesses, as well as outperformance of the Tommy Hilfiger business, drove both revenues and earnings during the quarter. Both the Tommy Hilfiger and Calvin Klein international businesses performed particularly well. Additionally, our positive cash flow position will allow us to quickly delever our balance sheet, and we continue to plan a $300 million debt repayment in the fourth quarter of 2010, which is in addition to the $100 million repayment that we made in the second quarter."
Mr. Chirico continued, "The performance of the Tommy Hilfiger business over the last two quarters has reaffirmed our belief in the global strength of the brand along with its future growth potential. Operationally, the integration of Tommy Hilfiger operations in North America continued during the quarter and is well on schedule. We also recently announced the formation of PVH Europe, which will be managed from the Tommy Hilfiger offices in Amsterdam by a team of Tommy Hilfiger executives and dedicated staff, that will seek to exploit international opportunities for our heritage brands, starting with the international ARROW brand business."
Mr. Chirico concluded, "Our stellar performance has been, and we expect will continue to be, driven by the strength of our brands, which have benefited from our consistent investment in brand marketing and advertising. As we reach this holiday season, we are increasing our fourth quarter advertising spending this year by $10 million over our previous plan. We believe this continued investment in our brands along with the sound execution of our business strategies will benefit us through revenue and profitability growth in the future."
Click here for more details
Phillips-Van Heusen Corporation