Tommy Hilfiger Corp.
posted a huge first-quarter loss on accounting charges and said its co-chairman was leaving, but the company beat pro forma estimates on higher revenue.
The company lost $438.8 million, or $4.88 a share, in the quarter on charges relating to goodwill amortization and deferred tax liabilities, which are no longer used to support the realization of deferred tax assets like trademark rights. Excluding those charges, Tommy Hilfiger earned 3 cents a share in the quarter, compared with a profit of 10 cents a share a year ago.
On a pro forma basis, analysts polled by Thomson Financial/First Call had been expecting break-even results.
First-quarter revenue was up 3% to $366.3 million from $355.7 million last year, ahead of the consensus estimate of $348.3 million. The company said the revenue growth was created by strong demand from women, while its juniors and childrenswear businesses performed well. Women's division revenue was up 28% while childrenswear was up 3%, offsetting a 22% decline in menswear revenue.
In a press release, the company said, "While the economic environment is quite challenging, and we foresee a continuation of the present highly promotional retail climate, we expect the momentum in our women's businesses to continue, and we are encouraged by some recent positive trends in men's jeans and childrenswear."
The company expects to earn about $1.67 a share for the year, compared with analyst estimates of $1.66.
Tommy Hilfiger also announced that Lawrence Stroll, a co-chairman and director of the company, has resigned to pursue "other business interests."