PVH Corp. said Speedo, acquired with its February purchase last year of Warnaco, delivered a “strong performance” in the second quarter.
On a conference call, Manny Chirico, PVH Corp.’s chairman and CEO, noted that Speedo “has been a delightful surprise for us” although PVH officials provided no further details on the swim brand’s performance.
Overall, PVH Corp. reported a loss of $16.0 million, or 20 cents a share, against earnings of $89.9 million, or $1.22, a year earlier. Excluding acquisition, integration and restructuring costs associated with the acquisition of Warnaco, EPS was $1.39, which exceeded the company’s guidance of $1.35 and the prior year’s second quarter EPS before special items of $1.28.
Revenues increased 47.0 percent to $1.97 billion, principally driven by the addition of approximately $507 million of revenue related to the acquired Warnaco businesses, which also included Calvin Klein jeans and intimate apparel, as well as the Warner’s and Olga women’s intimate apparel businesses.
Among its three segments, Calvin Klein’s sales grew to $671 million from $252 million in the year-ago quarter, with the Warnaco purchase contributing $376 million of the increase. Tommy Hilfiger sales increased 10.7 percent to $799 million.
Its Heritage Brand segment grew sales 36 percent to $495 million, principally driven by the addition of $131 million of revenue related to the addition of Speedo, Warner’s and Olga. That was partly offset by a decrease of $8 million, or 2 percent, resulting from the 2012 exit from the Izod women’s and Timberland wholesale sportswear businesses. VF Corp. is relaunching Timberland apparel after acquiring the brand last year.
Excluding the exited brands, revenue for the pre-acquisition Heritage Brands business increased 2 percent as increases in dress furnishings, Van Heusen and Izod men’s wholesale offset a 10 percent comp decline in the segment’s retail business, largely due to a continued soft performance of Bass.
Looking ahead, PVH said that it remains cautious about the remainder of the year given the Warnaco integration and economic uncertainty. It expects to earn approximately $7 per share for the full year on an adjusted basis; analysts predicted $7.13 per share.
While the weakness is more prevalent in Southern Europe, Chirico said a “level of cautiousness” is also evident in conversations with North American department stores.
“A couple of good weeks of business will change all that, but right now that's the tone of business, and it's hard to be more aggressive in this environment that we see,” said Chirico.
