Philips-Van Heusen lowers fourth quarter guidance

Tuesday, 25 November 2008

Phillips-Van Heusen Corp posted a quarterly net income beating Wall Street estimates, but the apparel maker has lowered its fourth quarter and full year guidance amid a rapidly deteriorating economic environment. The better-than-expected-results came mostly from an increase in earnings and revenues from its Calvin Klein business.

Philips-Van Heusen, owner of brandnames such as Van Heusen, Izod and Arrow, and licenses brands including Geoffrey Beene, Kenneth Cole New York, and BCBG Max Azria, said sales rose 4 percent to $727.5 million in the quarter from $696.4 million a year earlier, helped by a 9 percent rise in the Calvin Klein licensing business.

Net profit in the quarter to 2 November fell 11.8 percent to $53.7 million from $60.9 million a year earlier.

"The recent and rapid deterioration in the overall economic environment in the US and abroad has decreased consumer confidence and spending beyond what we had previously anticipated," said chairman and chief executive officer Emanuel Chirico.

Wholesale and retail revenues were up 3 percent, driven by dress furnishings, the Calvin Klein men's sportswear and retail businesses, and the new Timberland wholesale men's sportswear business.

However, same-store sales fell 7 percent in the company's heritage brand outlet retail businesses, and overall retail comparable store sales declined 5 percent.

Best known for its Calvin Klein brand, the company said it would review its operating structure, capital spending, and real estate portfolio, adding it expected the current economic challenges to continue into 2009.