Apparel maker Phillips-Van Heusen Corp. (PVH) Tuesday said its profit for the first quarter plunged from a year ago on lower revenues and charges related to restructuring. Earnings on an adjusted basis and revenue, however, came in ahead of Street estimates. The company also said it expects second quarter earnings in line with current Street estimates, and raised the low end of its full year earnings estimate range.
First quarter GAAP earnings of Phillips-Van Heusen plunged to $24.71 million or $0.48 per share from $46.80 million or $0.90 in the same quarter a year ago.
On a non-GAAP basis, earnings were $27.6 million or $0.53 per share, compared to prior year first quarter earnings of $46.4 million or $0.89 per share.
Related to the restructuring initiatives, the company said it expects pre-tax costs of approximately $10.0 million in 2009, of which $4.7 million was incurred in the first quarter and $5.3 million expected to be incurred in the second quarter. On average, eleven analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenue for the quarter dropped 11% to $557.43 million from $625.70 million in the prior-year quarter, however, surpassing Street estimates of $536.85 million for the quarter.
Quarterly revenue represents a 7% decrease from the prior year first quarter revenue of $601.8 million on a non-GAAP basis, which excludes $23.9 million of revenue associated with the exited Geoffrey Beene outlet retail division.
Segment-wise, royalty revenue decreased 1.78% to $58.92 million, with a slight improvement in Advertising and other revenues of $22.76 million in the same quarter a year ago.
Revenue in the Calvin Klein licensing business increased 1% to $75.08 million, with 6% rise in global licensee royalty growth on a constant currency basis, offset by a $3.5 million negative impact of a stronger U.S. dollar. Combined revenue of the wholesale and retail businesses decreased 12%.
In the sequentially preceding fourth quarter, Phillips-Van Heusen slipped to a loss of $37.9 million or $0.74 per share, with a 1% decline in revenue at $584.58 million for the quarter.
For the second quarter of 2009, Phillips-Van Heusen sees earnings on a non-GAAP basis in a range of $0.35 to $0.45 per share, excluding $5 million of pre-tax costs associated with restructuring initiatives. On a GAAP basis, earnings are currently anticipated to be in a range of $0.29 to $0.39 per share.
Second quarter 2009 revenue is expected to be in a range of $510 million to $520 million or down approximately 7% to 9% from 2008 revenue.
Analysts' currently forecast second quarter earnings in the range of $0.42 per share, on revenues of $508.73 million.
For full year 2009, Phillips-Van Heusen revised its earnings guidance by raising the low end of the full year range, expecting earnings in a range of $2.05 to $2.30 per share on a non-GAAP basis. On a GAAP basis, earnings are expected to be in a range of $1.93 to $2.18 per share.
Previously, the company expected GAAP earnings in a range of $1.88 to $2.18 per share. Excluding items, non-GAAP earnings were estimated in the range of $2.00 to $2.30 per share. Street analysts currently expect earnings of $2.20 per share for the year.
Total revenue for 2009 is still expected to range between $2.30 billion and $2.33 billion, a decrease of approximately 3% to 4% from 2008 revenue, on a non-GAAP basis of $2.40 billion. On a GAAP basis, 2009 revenue is currently projected to decrease approximately 7% to 8% from 2008. The Street currently expects revenues of $2.28 billion for the year.
On March 24, 2009, brokerage, Citigroup upgraded Phillips-Van Heusen shares to 'Buy' from 'Hold' with a mean target range of $26.45.
PVH closed Tuesday's regular trading at $27.88, up $0.18 or 0.65%, on a volume of 1.25 million shares. In after-hours, the stock further gained $0.02 or 0.07%, to trade at $27.90. In the last 52-week period, the stock traded in the range of $13.04 to $47.31, with a three-month average volume of 1.18 million shares.
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