'We will continue to seek new expansion opportunities' - Tommy Hilfiger

09 Jun '09

5 min read

Tommy Hilfiger Group announces the results fr the year ended March 31, 2009.

Financial Highlights
• Total Group net sales increased 21% to EUR1,600 million
• Global retail value of net sales of EUR 3.4 billion
• Sales growth in wholesale 16% and retail 29%, driven by organic growth, new store openings and the newly acquired Japan and European Footwear business (12% of total 21% growth).
• Despite pressure on margins in the second half of the year, EBITDA equal to FY08 at EUR 270 million.
• European sales up 14% to EUR795 million with an EBITDA margin of 23.2% (FY08: 27.2%)
• North American sales of USD 898 million up 10% with an EBITDA margin of 10.4% (FY08: 15.2%)
• Cash generated from operations at EUR 267 million (FY08: EUR 228 million)
• Despite significant investments in stores, shop-in-shops and the acquisition of TH Japan, net debt lower than prior year at EUR 505 million (leverage ratio at 1.9)

Operational Highlights
• 100 new freestanding store openings, taking the global store portfolio to over 900
• Largest Tommy Hilfiger flagship store in Europe opened in Cologne, Germany in March 2009
• Business in Japan was swiftly integrated and contributed significantly to results
• In March 2009, we announced our intent to integrate our US and Canadian business into Tommy Hilfiger North America
• Strategic alliance with Macy's, established in Fall 2008, successful and expanding product line to include children's wear
• First global flagship store on Fifth Avenue in New York City set to open September 2009

Commenting on the results Fred Gehring, Chief Executive Officer, said:
"Like everyone else we have had to address the new economic reality with an increased focus on inventories, receivables, costs and cash, but we are more than pleased that in spite of the unprecedented economic circumstances we were able to continue our growth pattern through the second half of the year, albeit at a much more controlled level. We believe that this is a true testament to the incredible global strength of the Tommy Hilfiger brand, our people and our balanced business model.

We expect the coming year to be challenging but we are focused on the opportunities and have initiated a significant number of organizational adjustments so that over the course of the year we will become a more efficient organization. We will continue to seek new expansion opportunities in product categories, geographies and store portfolio which allow us to anticipate continued growth."

Operational Review
Europe
In Europe total sales increased by 14% to EUR 795 million. The wholesale operations showed the largest increase as a result of continued growth in all regions and product groups, as well as the inclusion of European footwear sales. The retail business showed 1.3% comparable store sales growth and 6% overall growth compared to the prior year.

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