Apparel maker PVH Corp. (PVH) said Wednesday after the markets closed that it swung to a first quarter loss, hurt by costs associated with the acquisition of its former licensee Warnaco Group, Inc. and the related integration and restructuring.
However, the company's quarterly earnings per share, excluding items, breezed past Wall Street expectations as did its quarterly revenue.
At the same time, the company forecast second quarter earnings in line and revenue above analysts' current consensus estimate. The company also reaffirmed its fiscal year 2013 outlook.
Commenting on the results, Emanuel Chirico, PVH Chairman and Chief Executive Officer, said, "We are very pleased with our first quarter performance, which included our newly acquired Warnaco businesses and significantly exceeded our guidance. Our results demonstrated the strength of the Calvin Klein and Tommy Hilfiger businesses, which both continue to exhibit strong global growth, despite the macro-environment and unseasonably cold weather that negatively impacted sales of spring product in North America and Europe."
PVH shares are currently gaining 6.04% in after hours trading after closing the day's regular trading session at $111.28, up 8 cents. The shares trade in a 52-week range of $73.26 to $125.50.
PVH completed the acquisition of Warnaco Group on February 13. In March, the company revealed that it has commenced certain actions related to its plans to achieve savings and synergies arising out of its acquisition of Warnaco. PVH noted that it expected to cut about 900 to 1,000 jobs worldwide, although certain positions will be replaced in other company offices.
First quarter revenue from the company's Tommy Hilfiger business, which was acquired in May 2010, rose 5% year-over-year to $811.4 million, mainly driven by a 5% retail same-store sales growth, retail square footage expansion and strong North America wholesale revenue growth.
Revenue for the company's Calvin Klein business jumped 132% to $607.9 million in the first quarter, driven mainly by the Warnaco acquisition.
Total revenue for the Heritage Brands business increased 24% to $490.9 million in the first quarter, due mainly to the addition of $126 million of revenue related to Warnaco's Speedo swimwear and Warner's and Olga women's intimate apparel businesses.
For the first quarter ended May 5, 2013, 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 a net loss of $20.1 million or $0.25 per share, compared to net income of $95.5 million or $1.30 per share for the year-ago quarter.
Excluding items, adjusted net income for the first quarter was $155.6 million or $1.91 per share, compared to $97.9 million or $1.33 per share in the prior year quarter.
On average, 16 analysts polled by Thomson Reuters expected the company to earn $1.35 per share for the first quarter. Analysts' estimates typically exclude special items.
Total revenue for the first quarter rose 34% to $1.91 billion from $1.43 billion in the same quarter last year. Excluding the impact of sales returns for certain Warnaco wholesale customers in Asia in connection with an initiative to reduce excess inventory levels, adjusted revenue for the latest quarter was $1.94 billion. Eleven analysts had a consensus revenue estimate of $1.91 billion for the first quarter.
Looking forward to the second quarter, the company forecasts revenue of about $1.9 billion and adjusted earnings of $1.35. Analysts currently expect the company to earn $1.35 per share on revenue of $1.84 billion for the second quarter.
For the fiscal year 2013, the company continues to expect revenue of about $8.2 billion and adjusted earnings of about $7.00 per share. Analysts currently expect the company to earn $7.04 per share on revenue of $8.18 billion for the fiscal year 2013.
"Despite the strong tone of business that led to the company's outperformance in the first quarter, the company believes it is premature to adjust its full year earnings guidance, given the short amount of time that has passed since closing the Warnaco acquisition and the complexity of the integration, PVH said in a statement.
by RTT Staff Writer
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