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PVH Corp. Reports 2011 Third Quarter Results

PVH Corp. (NYSE: PVH) reported 2011 third quarter and year to date results.

Non-GAAP Amounts:

The discussions in this release that refer to non-GAAP amounts exclude the items which are described in this release under the heading “Non-GAAP Exclusions.” Reconciliations of GAAP to non-GAAP amounts are presented in Tables 1 through 6 and identify and quantify all excluded items.

Overview of Third Quarter Results:

  • Earnings per share was $1.89 on a non-GAAP basis, which exceeded the Company’s guidance and the consensus estimate and represents an increase of 13% over the prior year’s third quarter non-GAAP earnings per share of $1.67.
  • GAAP earnings per share was $1.54, and included a one-time unplanned pre-tax expense of $20.7 million incurred in connection with the Company’s buyout of the Tommy Hilfiger perpetual license in India, as compared to the Company’s guidance of at least $1.67. GAAP earnings per share in the prior year’s third quarter was $1.39.
  • Revenue increased 9% to $1.654 billion over the prior year’s third quarter. The revenue increase is primarily attributable to the net effect of (i) an increase of $118.2 million, or 17%, in the Tommy Hilfiger business; (ii) an increase of $28.7 million, or 11%, in the Calvin Klein business; partially offset by (iii) a decline of $9.2 million, or 2%, in the Heritage Brands business.
  • Earnings before interest and taxes on a non-GAAP basis increased 5% to $227.3 million, due to strong overall performance in the faster growing Tommy Hilfiger and Calvin Klein businesses, partially offset by lower gross margin rates primarily due to anticipated product cost increases.
  • GAAP earnings before interest and taxes improved to $196.8 million from $178.3 million in the prior year’s third quarter, primarily due to revenue growth and the impact of reduced acquisition, integration and restructuring charges, partially offset by lower gross margin rates, which were anticipated.

Third Quarter Business Review:

Calvin Klein

Total revenue for the Calvin Klein business exceeded the Company’s guidance, increasing 11% over the prior year’s third quarter to $301.2 million. The increase reflected growth of 12% in retail comparable store sales and equally strong performance at wholesale. Calvin Klein royalty revenue increased 8% as compared to the prior year’s third quarter attributable to continued strong performance across most product categories and regions, with underwear, outerwear and women’s sportswear performing particularly well and outstanding growth coming from South America and Asia, offset, in part, by weakness in the domestic jeanswear business. Foreign exchange rates had an immaterial year-over-year impact on the revenue of the Calvin Klein business.

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