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The company said it now expects revenue for fiscal 2004 to be below fiscal 2003 levels, with earnings per share of between $1 and $1.20 for the year.
The company’s original outlook was for revenue and earnings to remain comparable with those of fiscal 2003. The company also said that it plans to expand its marketing to feature additional outdoor advertising. "Our marketing efforts will also include further development of the higher-tier product line currently being offered in our U.S. specialty stores and soon to be available in our network of specialty stores worldwide," Horowitz said in a statement.
Executives told analysts that the company believed it was on track with its product offerings, and is planning to exit less profitable doors in fiscal 2004. The door count would drop in the fall for both junior jeans and men’s sportswear to 1,400 from 1,500 doors and men’s jeans to 1,600 from between 1,700 and 1,800 doors. The bright spot will be women’s, which is currently in 1,500 doors and will likely see a slight gain in doors in part to accommodate growth in the plus-size business.
For the nine months, weighed down by a $430 million aftertax charge to reflect a change in accounting principle, the firm lost $399.8 million, or $4.41 a diluted share, against income of $93.8 million, or $1.04, a year ago. Excluding all nonrecurring charges, income dropped 7.1 percent to $87.1 million. Revenue rose 0.9 percent to $1.39 billion from $1.38 billion.
Robert Drbul, analyst at Lehman Bros., said in a research note: "Tommy Hilfiger’s results continue to be negatively affected by a highly promotional retail environment and a deflationary pricing environment for apparel. We expect these trends to continue in the near term."
Shares of the company gained 16 cents, or 2.4 percent, to close Wednesday at $6.72 in New York Stock Exchange trading.