Apparel maker PVH Corp. (PVH) said Monday after the markets closed that its second quarter profit rose 31% from last year, driven by continued momentum in Tommy Hilfiger North American and European businesses.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations.
In addition, the company gave an upbeat earnings forecast for the third quarter and once again raised its earnings outlook for the full year 2012.
Emanuel Chirico, PVH Chairman and Chief Executive Officer, said, "The exceptional performance of Tommy Hilfiger allowed us to exceed our earnings expectations, despite the cost pressures and the economic uncertainty that have impacted the global marketplace. The strength of the Tommy Hilfiger brand was epitomized by the brand's performance in Europe despite the ongoing economic headwinds in that region." PVH shares are currently gaining 4.53% in after hours trading after closing the day's regular trading session at $88.49, up 55 cents. The shares trade in a 52-week range of $53.51 to $93.06.
Second quarter revenue from the Tommy Hilfiger business, which was acquired in May 2010, grew 4% year-over-year to $721.9 million, due mainly to retail same-store sales growth of 11% in North America; European retail same-store sales growth of 15% and European wholesale growth of 9%. Earnings before interest and taxes for the Tommy Hilfiger business increased 36% to $93.8 million, helped by higher revenue and improved operating margin as well as a decrease in integration and restructuring costs.
Revenue for the company's Calvin Klein business rose 5% to $251.2 million in the second quarter. Earnings before interest and taxes for the Calvin Klein business fell 9% to $60.2 million.
Revenue for the Heritage Brands business fell 10% to $363.5 million in the second quarter, driven in large part by a negative impact related to the exit from the Izod women's and Timberland sportswear businesses. For the second quarter ended July 29, 2012, the New York-based company, which was formerly known as Phillips-Van Heusen Corp. and changed its name to PVH Corp. in June 2011, reported net income of $87.7 million or $1.19 per share, compared to $66.7 million or $0.92 per share for the year-ago quarter.
Excluding items, adjusted net income for the second quarter was $92.0 million or $1.25 per share, compared to $78.3 million or $1.07 per share in the prior year quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to earn $1.20 per share for the second quarter. Analysts' estimates typically exclude special items.
Total revenue for the second quarter grew slightly to $1.34 billion from $1.33 billion in the same quarter last year. Twelve analysts had a consensus revenue estimate of $1.34 billion for the second quarter.
The company noted that the latest quarter revenue was negatively impacted by foreign currency translation and the exit from the Izod women's and Timberland wholesale sportswear businesses. On a constant currency basis and excluding the impact of exited businesses, second quarter revenue increased 4% from a year earlier.
Looking forward, the company expects third quarter revenue to decrease 2% to 3% over the prior year's third quarter amount of $1.654 billion, which implies first quarter 2012 revenue of $1.604 billion to $1.621 billion.
The company also forecast third quarter adjusted earnings of $2.20 to $2.25 per share.
Analysts currently expect the company to earn $2.21 per share on revenue of $1.66 billion for the third quarter.
For the full year 2012, the company raised its adjusted earnings guidance to a range of $6.25 to $6.32 per share from its prior guidance of $6.15 to $6.25 per share. Analysts currently expect the company to earn $6.22 per share for the full year 2012.
PVH continues to expect full year 2012 revenues to increase 1% to 2% compared to last year's revenue of $5.891 billion. Analysts currently expect the company's full year 2012 revenue to grow 2% to $6.01 billion.
"We have raised our full year earnings guidance based on our better than expected second quarter performance, the positive impact from lower product costs beginning with Fall deliveries and our belief that the strength of our brands will continue to drive revenue and profitability increases throughout the remainder of 2012," Chirico added.
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