PVH Corp. reported total revenue for the Heritage Brands business, which includes Speedo and Izod, decreased 2 percent in the fourth quarter to $427.7 million. The decline reflected a $30 million, or 7 percent, negative impact related to the exit from the Izod womens and Timberland wholesale sportswear businesses.
Excluding the impact of exited businesses, revenue for Heritage Brands increased 4 percent, due principally to strong growth in the companys ongoing wholesale sportswear businesses and a benefit of approximately 2 percent due to the extra week of revenue. Comps for the Heritage Brands retail business, largely Izod and Bass, were relatively flat to the prior year.
Earnings before interest and taxes for the Heritage Brands business jumped 152 percent to $26.6 million due to gross margin improvement in the units dress furnishings, sportswear and retail businesses as well as the exit of lower-margin businesses.
The Heritage Brands group includes Van Heusen, Izod, Arrow, GH Bass, Speedo, Olga and Warners. The last three brands, as well as the Calvin Klein underwear and jeans business, were acquired with its $2.9bn purchase of Warnaco Group earlier this year. PVHs two larger business units are Calvin Klein and Tommy Hilfiger.
Companywide, earnings more than doubled to $80.7 million, or $1.09 per share, for the quarter that ended Feb. 3, up from $35.5 million, or 48 cents per share, for the fourth quarter of the prior year. On an adjusted basis, earnings reached $1.60 per share versus $1.19 per share. Revenue increased 7.2 percent to $1.64 billion from $1.53 billion.
Looking ahead, PVH warned that additional investments needed for Warnaco would reduce current-years earnings by 25 cents per share.
