Revenue in Calvin Klein licensing biz relatively flat at PVH

24 Mar '09

5 min read

2008 Full Year Results:
For the full year, total GAAP revenue increased 3% to $2.49 billion in 2008 from $2.43 billion in 2007, driven by revenue growth of 13% in the Company's Calvin Klein licensing business.

For the full year, earnings before interest and taxes in the Company's Calvin Klein licensing business grew 20% on both a GAAP and non-GAAP basis. Earnings decreases in the Company's heritage brand outlet retail and wholesale sportswear businesses more than offset the Calvin Klein licensing improvement and resulted in the reduced 2008 GAAP and non-GAAP earnings per share amounts noted above.

Balance Sheet:
The Company ended the year with $328.2 million in cash, an increase of $58.3 million over the prior year. This increase is after a $25.0 million voluntary pension contribution made in the fourth quarter of 2008 and full year capital spending of $88.1 million.

Inventories ended the year down 12% compared to the prior year and reflect the Company's focus on aggressively managing inventory levels and the expectation of first quarter sales declines.

2009 Guidance:

Earnings Per Share and Revenue
The estimates below reflect the belief that economic conditions and consumer spending will continue on their current trends during the first three quarters of 2009 with a moderate improvement taking place in the fourth quarter of the year.

Full Year Guidance:
The Company is currently projecting 2009 earnings per share to be in a range of $2.00 to $2.30, which excludes approximately $10 million of pre-tax costs related to restructuring items associated with the Company's previously announced restructuring initiatives. On a GAAP basis, the Company is currently planning 2009 earnings per share to be in a range of $1.88 to $2.18.

Total revenue for 2009 is currently projected to be approximately $2.30 billion to $2.33 billion, a decrease of approximately 3% to 4% from the Company's 2008 non-GAAP revenue, which excludes approximately $95 million of revenue associated with the Company's exited Geoffrey Beene outlet retail division. On a GAAP basis, 2009 revenue is currently projected to decrease approximately 7% to 8% from 2008.

The Company is currently projecting Calvin Klein royalty revenue to remain relatively flat in 2009, as anticipated global licensee sales growth of 4% in local currency is expected to be offset by a negative impact of $9 million to $12 million from a stronger U.S. dollar. Revenue for the Company's wholesale businesses is currently projected to decrease 6% to 7% in 2009, and the Company's retail businesses are currently estimating 2009 comparable store sales declines of 6% to 7%. These sales declines are expected to be partially offset by approximately $35 million of sales attributable to 2008 and 2009 Calvin Klein store openings, the latter principally related to the conversion of Geoffrey Beene outlet retail store locations to the Calvin Klein format.

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Phillips-Van Heusen Corporation

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