PVH Corp.’s Q4 Results Beat Street’s Forecast but Need for Higher Investments to Dent FY 2013 Earnings (PVH)

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Although PVH Corp. (NYSE: PVH) reported twofold jump in fiscal fourth-quarter earnings, shares tumbled in afterhours trading on Wednesday after the retailer said its financials in the current fiscal year will be weighed down due to higher-than-expected investments required for its recent Warnaco acquisition of Warnaco.

Formerly known as Phillips-Van Heusen Corp., PVH which owns brands such as Calvin Klein and Tommy Hilfiger, acquired rival the Warnaco Group in deal estimated at $2.9 billion. The deal closed on Feb 13, providing the company completed control over Calvin Klein clothing brand.

The Company said that in order to rebuild Calvin Klein brands it will require more investments than initially contemplated.

PVH said that it intends to enhance the supply chain and invest more on marketing and product design as it look to rejuvenate Calvin Klein underwear and denims which in turn weigh on 2013 results, the company said. The company slashed its full year earnings guidance by 25 cents a share.

For the fiscal fourth quarter ended Feb 3, PVH Corp. reported a profit of $80.7 million or $1.09 a share compared to net income of $35.5 million or 48 cents a share, in the year earlier quarter. Excluding onetime items, adjusted earnings came at $1.60 a share up from $1.19 a share.

Revenue during the period rose to $1.64 billion from $1.53 billon.

Analysts’ consensus estimate was for earnings of $1.50 a share on revenue of $1.6 billion, according to a data compiled by FactSet Research.

Looking ahead at fiscal 2013, the Company expects earnings of $7.00 a share on revenue of $8.2 billion, falling short of analysts’ consensus estimate for $7.44 and $7.9 billion, respectively.

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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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