Nov 28, 2012
PVH expects to earn more this year as margins rise
Nov 28, 2012
Clothing maker PVH Corp posted a bigger quarterly profit on Tuesday despite a slight drop in sales as its higher margin Calvin Klein and Tommy Hilfiger businesses grew faster, and its shares gained one percent in after-hours trade.
The company, which recently bought The Warnaco Group to unite the Calvin Klein underwear, jeans and sportswear lines, also raised its full year profit view.
PVH now expects to make between $6.37-$6.38 a share for the year. In August, the company said it expected to earn between $6.25-$6.32.
New York-based PVH, which shortened its name from Phillips-Van Heusen Corp last year, also markets or owns brands like IZOD and Van Heusen.
It bought Tommy Hilfiger from Apax Partners in 2010 in a $3 billion cash-and-stock deal to boost its presence in Europe and Asia.
"The worldwide consumer appeal for Calvin Klein and Tommy Hilfiger has allowed us to successfully expand our market share penetration and global reach of our designer lifestyle brands, despite the macroeconomic headwinds," Chief Executive Emanuel Chirico said in a statement.
For the third quarter ended Oct. 28, the company, earned $165.41 million, or $2.24 a share, up from $112.24 million, or $1.54 a share, a year earlier.
Gross margins rose 260 basis points, triggered by the higher-margin Calvin Klein and Tommy Hilfiger businesses growing faster, the company said.
That, combined with higher selling prices and falling manufacturing costs helped bolster margins further.
After adjusting for expenses attached to the integration of Tommy Hilfiger and related restructuring, the company earned $2.34 a share.
On that basis, analysts, on average, were expecting the company to earn $2.30 a share, according to Thomson Reuters I/B/E/S.
Revenue came in at $1.64 billion, compared with $1.65 billion a year earlier.
Shares of the company closed at $109.29 Tuesday on the New York Stock Exchange, ahead of the results. In after-hours trade they climbed to $110.42.
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