financial
financial

PVH 1Q Earnings Drop 11.7%

Phillips-Van Heusen Corp. saw an 11.7 percent dip in first-quarter earnings as start-up costs for new businesses ate into the bottom line.

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Phillips-Van Heusen Corp. saw an 11.7 percent dip in first-quarter earnings as start-up costs for new businesses ate into the bottom line.

For the three months ended May 4, earnings fell to $46.8 million, or 90 cents a diluted share, from $53 million, or 92 cents, in the year-ago period. Results included $7 million, or 8 cents a share, in start-up costs for the Timberland wholesale sportswear business and Calvin Klein specialty retail stores.

Total revenues grew 5.7 percent to $625.7 million from $591.9 million.

The Calvin Klein licensing business drove revenue growth and partially offset weakness in the outlet and moderate sportswear businesses. Revenues also were boosted by the addition of the Izod women's sportswear business and strength in dress furnishings.

"The global demand for Calvin Klein enables it to continue to outperform across all product categories, both internationally and domestically," said Emanuel Chirico, chairman and chief executive officer.

During the quarter about 30 percent of total earnings was generated internationally, which helped to lessen the impact of the U.S. economic downturn, Chirico said.

The firm also acquired certain assets of Mulberry Neckwear for $10 million last month.

"While the overall retail environment remains difficult, we believe that we are well positioned to take advantage of potential opportunities on the acquisition front," Chirico said. "Our solid financial position and the strength of our balance sheet are valuable assets that will help us as we continue to pursue opportunities that will contribute to our future growth and further diversify our business model in terms of price points, channel or geography."

The company modestly increased its full-year earnings outlook to the range of $3.32 to $3.41 a share, up from the $3.30 to $3.40 previously anticipated. For the second quarter, earnings are expected to come in at 63 cents to 66 cents a share.

Shares of PVH dropped 1.5 percent to close at $45.76 before the company reported first-quarter results.
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