Earnings in the current year's first quarter were negatively impacted by approximately $7.0 million, or $0.08 per share, of start-up costs associated with the Company's Timberland wholesale sportswear business and Calvin Klein specialty retail stores.
Balance Sheet:
The Company ended the first quarter with $184.2 million in cash, a decrease of $115.5 million compared with the prior year's first quarter. This decrease was primarily driven by the completion of the Company's stock repurchase program during the fourth quarter of 2007, in which the Company utilized $200 million of its cash to repurchase approximately 5.2 million shares of its common stock.
Inventories ended the quarter clean and were 5% over the prior year's first quarter. This increase includes the new IZOD women's and Timberland sportswear businesses, the new Calvin Klein specialty retail stores and the recently-acquired Calvin Klein Collection wholesale business.
Excluding the inventories of these new businesses, inventories were down 3%, which reflects the Company's focus on maintaining clean inventory levels in a difficult environment.
CEO Comments:
Commenting on these results, Emanuel Chirico, Chairman and Chief Executive Officer, noted, "We are very pleased with our first quarter results. Despite the difficult retail environment driven by the continued pressure on consumer spending, we were able to exceed our previous earnings guidance.
The strength of the Calvin Klein brand was the key driver in enabling us to achieve these results. The global demand for Calvin Klein enables it to continue to outperform across all product categories, both internationally and domestically. In the first quarter of 2008, approximately 30% of our total earnings was generated internationally, which further helped to lessen the impact on us from the economic downturn in the U.S."
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Phillips-Van Heusen Corporation
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