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'Business remains challenging' – PVH Chairman, CEO
20
May '09
Emanuel Chirico (Chairman and CEO)
Emanuel Chirico (Chairman and CEO)
Phillips-Van Heusen Corporation reported 2009 first quarter results.

First Quarter Results
• Earnings per share was $0.53 on a non-GAAP basis, which exceeded the high end of the Company's guidance and the consensus estimate. GAAP earnings per share was $0.48. The prior year's first quarter earnings per share was $0.89 on a non-GAAP basis. GAAP earnings per share was $0.90 in the prior year's first quarter.
• Revenue was $557.4 million, which exceeded the high end of the Company's guidance. This amount represents a 7% decrease compared to the prior year's first quarter revenue on a non-GAAP basis of $601.8 million, which excludes $23.9 million of revenue associated with the Company's exited Geoffrey Beene outlet retail division. On a GAAP basis, revenue decreased 11%.

Revenue in the Calvin Klein licensing business increased 1% from the prior year's first quarter, with global licensee royalty growth of 6% on a constant currency basis offset by a $3.5 million negative impact of a stronger U.S. dollar. The royalty growth on a constant currency basis was principally attributable to strong performance in jeans, footwear, dresses and underwear, partially offset by a sales reduction in the fragrance business, which continues to be adversely affected by declines in travel and discretionary consumer spending resulting from the difficult economic environment.

Combined revenue of the Company's wholesale and retail businesses of $476.8 million decreased 8% compared to the prior year's revenue on a non-GAAP basis of $520.3 million, which excludes $23.9 million of revenue associated with the Company's exited Geoffrey Beene outlet retail division. On a GAAP basis, combined revenue of the Company's wholesale and retail businesses decreased 12%. The Company's wholesale and retail businesses continued to be negatively affected by the economic slowdown and the tightening of inventory levels by department stores. The Company's outlet retail comparable stores sales were down 8% in the first quarter.

Earnings before interest and taxes in the current quarter was $53.8 million on a non-GAAP basis. This represents a decrease of approximately 35% as compared to the prior year and resulted from the revenue decline in the Company's wholesale and retail businesses, combined with reductions in gross margin due to promotional selling needed to drive sales and maintain clean inventories. Earnings before interest and taxes in the Calvin Klein licensing business was relatively flat when compared to the prior year. On a GAAP basis, earnings before interest and taxes decreased 41% to $49.1 million in the first quarter of 2009.

Balance Sheet
The Company ended the first quarter with $282.0 million in cash, an increase of $97.8 million from the prior year's first quarter. Inventories ended the quarter on plan and down 5% from the prior year.

2009 Guidance
The estimates below reflect the Company's belief that the difficult economic conditions will continue during the second and third quarters of 2009, with a moderate improvement taking place in the fourth quarter of the year.


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