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Tommy Hilfiger's EBITDA grows 23.9% to EUR268 mn

Jun '08
Tommy Hilfiger announces results for the financial year ended 31st March, 2008.

Financial Highlights:
• Total Group net sales increased 14.4% to EUR1,340 million
• Global retail value of net sales of EUR 3 billion
• European sales up 22.8% to EUR707 million with an increase in EBITDA margin to 26.0% (FY07: 25.4%)
• North American sales of $836 million up 2.5% with EBITDA margin at 14.2% (FY07: 13.4%)
• EBITDA grew 23.9% to EUR268 million
• EBITDA margin increase of 160 basis points to 20.0% of sales

Operational Highlights:
• 140 new freestanding store openings, taking the global store portfolio to 796
• Entered into a strategic alliance with Macy's, one of the United States' premier department stores, due to commence in Fall 2008
• Acquired former licensees Tommy Hilfiger Japan and Tommy Hilfiger Europe Footwear
• Signed lease for global flagship store on Fifth Avenue in New York City

Commenting on the results Fred Gehring, Chief Executive Officer, said:
"We are extremely proud of these record financials. For many years now our international business outside of the US has delivered consistent growth at a premium position. We are especially pleased as well that the initiatives we have undertaken in the past two years to elevate and reposition the brand in the US have delivered such strong results.

Not only does our global forward order book show a double digit increase for the fall of '08, our US business at our retail stores and at Macy's has performed exceptionally well throughout the year and in the currently challenging economic environment. We believe that the Group is now perfectly aligned globally and is strongly positioned for continued global expansion."

Operational Review:
Throughout Europe, both our wholesale and retail businesses continued to show strong double-digit growth with further improved gross margins.

In Europe, wholesale revenue increased by 22.4% due to a strong performance from all divisions and countries and the September 2007 acquisition of the Group's former footwear licensee, Tommy Hilfiger Footwear, which accounted for 8.2% points of the growth.

Retail revenue increased by 26.4%, mainly due to new and refurbished stores. The like-for-like growth was 3.8%. Gross margins in both channels were stronger by 120 basis points compared to the year ended 31 March 2007, largely caused by higher price points and improved sourcing.

In the U.S., our initiatives to reposition the brand by trading up have paid off substantially. After a number of years of decline, the U.S. business has started to contribute to the overall growth of the group (4.9% for FY08 versus FY07 for retail and wholesale combined).

Retail net revenue for the U.S segment was driven by comp growth of 6.7% for the year, and an improved gross margin of 260 basis points. In addition the group opened 13 new stores. The specialty stores showed significantly higher sales and gross margins compared to FY07.

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