) has managed to beat expectations yet again. The company
reported better-than-expected quarterly results, with adjusted
earnings per share for the fourth quarter of fiscal 2012 rising
over 34% year over year to $1.60, beating its own guidance range
of $1.48-$1.49 and the Zacks Consensus Estimate of $1.50. The
upside was primarily driven by strong revenue growth and improved
margins. Adjusted earnings include a favorable impact from PVH
Corp.'s change in accounting method for retirement plans.
Excluding the same, adjusted earnings came at $1.54 per
However, earnings including one-time items, increased over two
folds to $1.09 per share from 48 cents delivered in the year-ago
Quarter in detail
During the quarter, total revenue of this Zacks Rank #2 (Buy)
company increased 6.7% to $1,636.2 million compared with $1,532.8
million in the year-ago quarter and surpassed the Zacks Consensus
Estimate of $1,591.0 million.
The year-over-year revenue growth at the company's Tommy
Hilfiger and Calvin Klein segments were offset by a decline in
the Heritage Brands segment, negative impact from exiting the
Izod and Timberland businesses, as well as unfavorable foreign
currency exchange rates. The company's top line benefited from an
additional week in the quarter.
PVH Corp.'s adjusted operating profit surged 38.4% to $180.3
million from $130.3 million in the year-ago comparable quarter.
The company's operating margin grew 250 basis points (bps) to
11.0% compared with 8.5% in the year-ago period. The
year-over-year improvement in operating profit was primarily
driven by a 320 bps rise in gross margin resulting from increased
operating income at the company's Tommy Hilfiger and Calvin Klein
Revenue at the company's
segment increased 9% to $891.1 million from $815.8 million in the
year-ago period, primarily driven by 11% and 8% growth in North
American and International businesses, respectively. The
segment's revenue growth was partially offset by an unfavorable
impact of 1% from currency exchange rates.
The segment's adjusted operating profit grew 45% to $101.8
million from $70.2 million in the fourth quarter of fiscal 2012.
The increased operating profit was a result of revenue growth and
improved margins driven by higher average unit retail selling
price per unit along with a decline in product costs.
's revenue improved 14% to $317.4 million compared with $278.5
million in the year-ago quarter. The year-over-year increase in
revenue was primarily driven by improved sales in North America
along with store expansion initiatives and benefits from an
additional week in the quarter. However, a decline of 2% in
comparable store sales partially offset the segment's revenue
The segment's operating profit increased 5.0% to $73.8 million
from $70.1 million primarily driven by robust sales and improved
gross profit, partially offset by higher advertising
segment posted disappointing results with revenue falling 2% year
over year to $427.7 million from $438.5 million in the fourth
quarter of fiscal 2011. The decline was driven by an adverse
impact of 4% due to the company's exit from the Izod and
Timberland businesses. However, adjusted operating profit jumped
over two folds to $26.6 million from $10.5 million in the
prior-year quarter driven by increased gross profit resulting
from its exit from the lower margin carrying businesses of Izod
PVH Corp. expects fiscal 2013 total revenue to be $8.2 billion
with Warnaco contributing approximately $2.15 billion. Further,
the company now projects synergies from the newly acquired
Warnaco businesses to be $25 million in fiscal 2013 compared with
$50 million expected earlier. In addition, the acquisition is
expected to dilute PVH Corp.'s fiscal 2013 earnings per share by
Based on the abovementioned assumptions, the company is
anticipating reporting earnings of $7.00 per share in fiscal
For first quarter fiscal 2013, the company is projecting
revenue of $1.9 billion and earnings of $1.33 per share.
Other Stocks to Consider
Other stocks worth considering in the apparel retail industry
Ralph Lauren Corporation
Joe's Jeans Inc.
). All these stocks hold a Zacks Rank #2 (Buy).
HANESBRANDS INC (HBI): Free Stock Analysis
JOES JEANS INC (JOEZ): Free Stock Analysis
PVH CORP (PVH): Free Stock Analysis Report
RALPH LAUREN CP (RL): Free Stock Analysis
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