PVH Corp. reported 2013 first quarter results.
- First Quarter Non-GAAP EPS of $1.91 Significantly Exceeded Guidance of $1.33; GAAP Loss Per Share Was $(0.25)
- Company Reiterates Full Year 2013 Non-GAAP EPS Guidance of $7.00, Reflecting the Investments Needed to Restore and Drive Long-Term Growth of Acquired Businesses
Overview of First Quarter Results:
Earnings per share was $1.91 on a non-GAAP basis, which significantly exceeded the Company’s guidance, as compared to the prior year’s first quarter non-GAAP earnings per share of $1.33.
GAAP loss per share was $(0.25) as compared to the prior year’s first quarter GAAP earnings per share of $1.30, due to significant costs incurred in connection with the Company’s acquisition during the quarter of its former licensee, The Warnaco Group, Inc. (“Warnaco”), and with the related integration and restructuring, a significant portion of which was non-cash.
Revenue on a non-GAAP basis of $1.940 billion exceeded guidance by $40 million and increased 36% as compared to the prior year’s first quarter (which was in accordance with GAAP).
The increase was principally driven by the addition of approximately $487 million of revenue related to the newly acquired Warnaco businesses, net of a reduction in licensing revenue attributable to Warnaco from the prior year, and an increase of $41 million related to the Tommy Hilfiger business, partially offset by the loss of $28 million attributable to the Izod women’s and Timberland wholesale sportswear businesses, which the Company exited in 2012.
On a GAAP basis, revenue of $1.910 billion was $30 million lower than non-GAAP revenue due to sales returns for certain Warnaco wholesale customers in Asia in connection with an initiative to reduce excess inventory levels.
The acquisition of Warnaco has significantly impacted the way the Company manages and analyzes its operating results. Beginning with the first quarter, the Company changed how it discusses its business segments and results.
The Company aggregates its segments into three main businesses: (i) Calvin Klein, which now consists of the Calvin Klein North America and Calvin Klein International segments; (ii) Tommy Hilfiger, which consists of the Tommy Hilfiger North America and Tommy Hilfiger International segments; and (iii) Heritage Brands, which now consists of the Heritage Brands Wholesale and Heritage Brands Retail segments, whose operations are in North America and now include the swimwear and women’s intimate apparel wholesale businesses acquired with Warnaco. Refer to Appendix A later in this release for a further discussion and the adjusted 2012 quarterly and annual revenue and earnings before interest and taxes by segment.