Apparel giant PVH Corp says it remains cautious about the rest of its financial year after swinging to a second quarter loss as acquisition costs offset a hike in sales.
The group, whose brands include Calvin Klein and Tommy Hilfiger, said its net loss was $15.9 million for the three months to August 4, compared with a profit of $89.9 million in the same period last year.
Excluding $140 million in integration and restructuring charges related to the $2.9 million acquisition of Warnaco in February, net income attributable to PVH increased 22.6% to $115.5 million from $94.2 million last year.
Revenue, meanwhile, jumped 47% to $1.96 billion from $1.34 billion in the prior year, driven by the newly-acquired Warnaco businesses.
At Calvin Klein, sales more than doubled to $671 million from $252 million last year. For Tommy Hilfiger, sales reached $799 million, up 11% on $722 million in the previous year. Heritage brands saw sales grow 36% to $495 million from $363 million.
Chairman and CEO Emanuel Chirico said: “We are pleased with our second quarter performance, which exceeded our previous guidance for both revenue and earnings per share, despite volatility in consumer spending during the second quarter, particularly highlighted by weakness in the U.S. and Europe.
“Our results for the quarter were driven by the outperformance of most of our newly acquired businesses coupled with organic growth in our Tommy Hilfiger and pre-acquisition Calvin Klein and wholesale Heritage Brands businesses, which more than offset the continued underperformance in our Tommy Hilfiger Japan, Bass retail and Calvin Klein Europe businesses.”
The company said it remains cautious about the remainder of the year, in light of the Warnaco integration and uncertainty impacting the overall markets. PVH expects third-quarter underlying earnings per share to be $2.20, down on $2.38 last year. Revenue is forecast to be $2.2 billion, up on $1.6 billion in the prior year.
“We believe the investments we make today are necessary to rebuild the newly acquired Calvin Klein businesses and will drive our growth going forward. We are confident that these initiatives will improve and expand our brand presence globally and will position us for significant future growth,” Chirico added.
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