PVH Profit Misses Estimate; Cuts Outlook

(RTTNews) - Apparel maker PVH Corp. (PVH) said Wednesday after the markets closed that it swung to a first quarter profit, helped mainly by lower acquisition, integration and restructuring costs.

However, the company's quarterly earnings per share, excluding items, came in below analysts' expectations as did its quarterly revenue. At the same time, the company forecast second quarter earnings below analysts' current consensus estimate and lowered its full year earnings outlook.

Commenting on the results, Emanuel Chirico, PVH Chairman and Chief Executive Officer, said, "We are pleased with our first quarter results, which were in line with our expectations, despite the unseasonably cool weather in North America and the volatility experienced in the global retail environment in the first quarter."

"Unfortunately, the challenging macroeconomic environment has continued into the second quarter, with heightened promotional activity across the North American retail landscape. As such, we believe our North American businesses will experience margin pressure in the second quarter and we have lowered our full year earnings per share guidance to reflect this," added Chirico.

PVH shares are currently losing 6.63% in after hours trading after closing the day's regular trading session at $130.68, up 35 cents. The shares trade in a 52-week range of $107.09 to $138.94.

First quarter revenue from the company's Tommy Hilfiger business, which was acquired in May 2010, rose 6% year-over-year to $862 million, with Tommy Hilfiger North America revenue up 5% and Tommy Hilfiger International revenue up 8%.

Revenue for the company's Calvin Klein business grew 9% to $665 million in the first quarter, while total revenue for the Heritage Brands business fell 11% to $436 million.

For the first quarter ended May 4, 2014, the New York-based company, which was formerly known as Phillips-Van Heusen Corp. and changed its name to PVH Corp. in June 2011, reported net income of $35.3 million or $0.42 per share, compared to a net loss of $10.3 million or $0.13 per share for the year-ago quarter.

Excluding items, adjusted net income for the first quarter was $122.1 million or $1.47 per share, compared to $155.6 million or $1.91 per share in the prior year quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to earn $1.49 per share for the first quarter. Analysts' estimates typically exclude special items.

Total revenue for the first quarter rose 3% to $1.96 billion from $1.91 billion in the same quarter last year. Sixteen analysts had a consensus revenue estimate of $1.98 billion for the first quarter.

Looking forward to the second quarter, the company forecasts revenue of about $2.0 billion and adjusted earnings of $1.40 to $1.45 per share. Analysts currently expect the company to earn $1.48 per share on revenue of $2.00 billion for the second quarter.

For the full year, the company company still forecasts revenue of about $8.5 billion, but lowered its adjusted earnings outlook to a range of $7.30 to $7.40 per share from its prior outlook of $7.40 to $7.50 per share. Analysts currently expect the company to earn $7.51 per share on revenue of $8.50 billion for the fiscal year 2014.