Ending inventories increased 2% to $855.4 million over the prior year’s third quarter. The Company continues to remain very comfortable with the quality of its inventory.
Please see the section entitled “Full Year and Fourth Quarter Reconciliations of GAAP to Non-GAAP Amounts” at the end of this release for further detail and reconciliations of GAAP to non-GAAP amounts discussed in this section.
Warnaco AcquisitionThe Company announced in the fourth quarter of 2012 that it had entered into a definitive agreement to acquire The Warnaco Group, Inc., with an expected closing date early in 2013. The following provides guidance for the Company’s full year and fourth quarter 2012, which does not give effect to the Warnaco acquisition and assumes the Company continues on a standalone basis. Full Year Guidance Revenue in 2012 is projected to increase approximately 2% as compared to $5.891 billion in 2011. On a constant currency basis and excluding the impact of the exited businesses, 2012 revenue is projected to increase approximately 6%. Foreign currency translation is expected to have a negative revenue impact of approximately $120 million, or 2%, while the exit from the Izod women’s and Timberland wholesale sportswear businesses is expected to reduce revenue by approximately $100 million, or 2%, for a total decrease in revenue of approximately 4% related to these items. Revenue for the Tommy Hilfiger business is expected to increase approximately 4% as compared to $3.051 billion in 2011, including a negative foreign currency translation impact of approximately 4%. Revenue for the Calvin Klein business is expected to grow approximately 7% as compared to $1.065 billion in 2011. Calvin Klein royalty revenue is expected to be negatively impacted by foreign currency translation, the upcoming reacquisition of the ck Calvin Klein European apparel and accessories licenses and the ongoing challenging business for the jeans and underwear product categories in Europe and the United States. Revenue for the Heritage Brands business is expected to decrease approximately 5% as compared to $1.775 billion in 2011, attributable to a 6% negative impact related to the previously mentioned exited sportswear businesses. On a non-GAAP basis, earnings per share in 2012 is currently projected to be in the range of $6.37 to $6.38, an increase of 18% to 19% over the 2011 amount of $5.38. The Company estimates that the 2012 effective tax rate will be approximately 23.5%.