Tommy Hilfiger Predicts Loss for Q1 2005
{{#rendered}} {{/rendered}}Tommy Hilfiger Corp. (TOM), helped by strong results from its European business, posted a profit for the fourth quarter in contrast with a loss a year ago.
However, the Hong Kong-based fashion company said Wednesday it expects a loss in the first quarter and anticipates revenue for the rest of the year to be below projections.
Its shares sank $1.74, or about 11 percent, to $13.76 on the New York Stock Exchange (search).
{{#rendered}} {{/rendered}}The company earned $26.9 million, or 29 cents per share, in the three months ended March 31. That contrasts with a loss of $113.8 million, or $1.26 per share, in the year-ago period.
Excluding special charges, profits were $36.7 million, or 40 cents per share, compared with $28.3 million, or 31 cents per share a year ago.
Analysts surveyed byThomson First Call (search) expected 37 cents per share.
{{#rendered}} {{/rendered}}The special charges totaled $14.6 million, or 11 cents per share, before taxes. They related to the closure of four retail stores the company announced in February; the repositioning of the U.S. young men's jeans business in March; the acceleration of the depreciation of certain shops within U.S. department stores; and other cost reduction moves.
Sales in the fourth quarter rose 2.4 percent to $510.1 million, from $498 million in the year-ago period.
Tommy Hilfiger Europe generated revenues of $163.6 million in the fourth quarter, up 39.5 percent from $117.3 million a year ago, while sales in the U.S. fell 12.3 percent to $269.2 million in the fourth quarter from $337.8 million a year ago.
{{#rendered}} {{/rendered}}"Our performance for the quarter exceeded earlier expectations due to stronger than anticipated European operating results and favorable currency translations," David F. Dyer, president and chief executive, said in a statement.
For the quarter ending June 30, Tommy Hilfiger anticipates a loss in the range of 10 cents to 13 cents per share. It blamed such factors as the seasonally low shipping patterns in Europe and lower-than-expected revenue in the United States.
Analysts surveyed by Thomson First Call expected a profit of 3 cents per share for the first quarter.
{{#rendered}} {{/rendered}}Tommy Hilfiger expects revenue for the year to decline by high single digits, a larger drop than its previous forecast for a mid-single digit decrease. The company attributed the decline to struggling U.S. sales particularly in its teen jeans and childrenswear divisions, despite success in its newly-launched, more upscale H Hilfiger line of products.
For the full year, ended March 31, Tommy Hilfiger earned $132.2 million, or $1.45 per share. That contrasts with a loss of $513.6 million, or $5.68 per share in the year-ago period.
Revenue was $1.87 billion for the year versus $1.88 billion in the year-ago period.
{{#rendered}} {{/rendered}}As of March 31, 2004, Tommy Hilfiger's worldwide store count was 167, including 132 outlet stores and 35 specialty stores, compared with 166 stores a year earlier, including 115 outlet stores and 51 specialty stores