Delaware | 001-07572 | 13-1166910 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
200 Madison Avenue, New York, New York | 10016 | ||
(Address of principal executive offices) | (Zip Code) |
Exhibit | Description |
99.1 | Press Release, dated September 9, 2013. |
Exhibit | Description |
99.1 | Press Release, dated September 9, 2013. |
• | SECOND QUARTER NON-GAAP EPS OF $1.39 EXCEEDED GUIDANCE OF $1.35; GAAP LOSS PER SHARE WAS $(0.20) |
• | COMPANY MAINTAINS FULL YEAR 2013 NON-GAAP EPS GUIDANCE OF $7.00 AS AN UNCERTAIN GLOBAL CONSUMER ENVIRONMENT IS EXPECTED TO PRESSURE SECOND HALF 2013 EARNINGS |
• | On a non-GAAP basis, earnings per share was $1.39, which exceeded the Company’s guidance of $1.35 and the prior year’s second quarter earnings per share of $1.28. |
• | GAAP loss per share was $(0.20) as compared to the prior year’s second quarter earnings per share of $1.22, driven by the acquisition, integration and restructuring costs associated with the Company’s acquisition of The Warnaco Group, Inc. (“Warnaco”). A significant portion of these costs was non-cash. |
• | Revenue increased 47% to $1.965 billion, as compared to the prior year’s second quarter. The increase was principally driven by the addition of approximately $507 million of revenue related to the newly acquired Warnaco businesses, net of a reduction in licensing revenue attributable to Warnaco for the prior year. Also contributing to the increase was incremental revenue of $77 million in the Tommy Hilfiger business, $43 million in the pre-acquisition Calvin Klein businesses and $22 million in the pre-acquisition Heritage Brands wholesale businesses, partially offset by a reduction of $13 million in the Heritage Brands Retail business and $8 million attributable to the Izod women’s and Timberland wholesale sportswear businesses that the Company exited in 2012. |
• | On a non-GAAP basis, earnings per share was $3.29 as compared to $2.61 for the prior year. |
• | GAAP loss per share was $(0.45) as compared to earnings per share of $2.52 for the prior year. |
• | Revenue on a non-GAAP basis was $3.905 billion, which represents an increase of $1.141 billion, or 41% over the prior year’s amount of $2.764 billion (which was in accordance with GAAP). The increase was due to: |
◦ | A $795 million increase in the Calvin Klein business, driven primarily by the addition of (i) $737 million attributable to the newly acquired Warnaco businesses, net of the reduction in licensing revenue attributable to Warnaco for the prior year; (ii) a 5% increase in comparable store sales in the North America retail business; and (iii) a double-digit increase in the pre-acquisition North America wholesale sportswear business. Royalty revenue decreased 34% as compared to the prior year, driven principally by the loss of Warnaco royalties that were included in the prior year and the expiration of a long-term contractual agreement related to royalties in the North America women’s sportswear business, which together totaled $48 million. Excluding the expiration of this contract and loss of Warnaco royalties, royalty revenue increased 7%, driven by strength in women’s sportswear, handbags and accessories, women’s coats, outerwear and suits. |
◦ | An 8%, or $118 million, increase in the Tommy Hilfiger business. Revenue increased 12% in the Tommy Hilfiger North America business, principally driven by comparable store sales growth of 6% and square footage expansion in the North America retail business, combined with strong first quarter performance in the North America wholesale business. Revenue in the Tommy Hilfiger International business increased 5%, driven by European retail comparable store sales growth of 5% and retail square footage expansion, partially offset by continued weakness in Japan, where the Company’s efforts to strategically reposition the brand are continuing. |
◦ | A 30%, or $227 million, increase in the Heritage Brands business driven primarily by the addition of $257 million attributable to the newly acquired Warnaco |
• | Revenue of $3.875 billion on a GAAP basis was $30 million lower than non-GAAP revenue due to sales returns accepted from certain Warnaco wholesale customers in Asia during the first quarter in connection with an initiative to reduce excess inventory levels. |
• | On a non-GAAP basis, earnings before interest and taxes increased $137 million to $455 million. This change resulted from: |
◦ | An $83 million increase in the Calvin Klein business attributed to the revenue increase discussed above, which was principally driven by the addition of the newly acquired Warnaco businesses and strong performance in the Company’s pre-acquisition Calvin Klein businesses. |
◦ | An $18 million increase in the Tommy Hilfiger business due principally to the revenue increase mentioned above. |
◦ | A $43 million increase in the Heritage Brands business driven by the addition of the newly acquired Warnaco businesses. |
◦ | A $6 million increase in corporate expenses due principally to the addition of Warnaco corporate expenses, net of savings and synergies realized from the acquisition. |
• | GAAP earnings before interest and taxes decreased $229 million to $80 million as compared to the prior year. The earnings decrease was primarily due to $374 million of acquisition, integration, restructuring and debt modification and extinguishment charges related to the Warnaco acquisition, partially offset by the changes discussed above. Of the $374 million of acquisition, integration and restructuring charges incurred during the six month period, $208 million were non-cash, most of which relate to short-lived valuation adjustments and amortization. |
• | On a non-GAAP basis, net interest expense increased to $92 million, as compared to $58 million in the prior year period (which was in accordance with GAAP), due to an increase in the Company’s total indebtedness incurred in connection with the Warnaco acquisition. GAAP net interest expense was $93 million. |
• | On a non-GAAP basis, the effective tax rate was 25.1% as compared to 26.0% in the prior year period. The GAAP effective tax rate was (174.0)% as compared to 26.4% for the prior year period. The Company’s GAAP 2013 tax rate was negatively impacted by non-recurring discrete items related to the Warnaco integration. |
• | A revenue reduction of $30 million in the first quarter of 2013 due to sales returns accepted from certain Warnaco wholesale customers in Asia in connection with an initiative to reduce excess inventory levels. |
• | Pre-tax costs of approximately $500 million expected to be incurred in 2013 in connection with the acquisition, integration and related restructuring of Warnaco, including costs associated with the Company’s debt modification and extinguishment and the sales returns mentioned above, of which $236 million was incurred in the first quarter, $140 million was incurred in the second quarter and $70 is expected to be incurred in the third quarter. Approximately $250 million of the acquisition, integration and related restructuring charges expected to be incurred in 2013 are non-cash charges, the majority of which are short-lived valuation adjustments and amortization. |
• | A tax expense of $28 million in the second quarter of 2013 associated with non-recurring discrete items related to the Warnaco integration. |
• | Pre-tax costs of $21 million incurred in 2012 principally in connection with the integration of Tommy Hilfiger and the related restructuring, of which $3 million was incurred in the first quarter, $5 million was incurred in the second quarter, $7 million was incurred in the third quarter and $6 million was incurred in the fourth quarter. |
• | Pre-tax costs of $46 million incurred in 2012 in connection with the acquisition of Warnaco, of which $6 million was incurred in the third quarter and $40 million was incurred in the fourth quarter. |
• | A pre-tax expense of $28 million recorded in the fourth quarter of 2012 related to recognized actuarial losses on retirement plans. |
• | A tax benefit of $14 million in 2012 related to the recognition of previously unrecognized net operating loss assets and tax credits, of which $5 million was recorded in the third quarter and $9 million was recorded in the fourth quarter. |
• | Estimated tax effects associated with the above pre-tax costs, which are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded as an acquisition, integration, restructuring or debt modification and extinguishment cost or actuarial loss on retirement plans immediately recognized in earnings to determine if such cost is tax deductible, and if so, in what jurisdiction the deduction would occur. All items above were identified as either primarily tax deductible, with the tax benefit taken at the statutory income tax rate of the local jurisdiction, or as non-deductible, in which case the Company assumed no tax benefit. |
Quarter Ended | Six Months Ended | |||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||||||
Net sales | $ | 1,884,439 | $ | 1,219,620 | $ | 3,707,484 | $ | 2,532,469 | ||||||||||||
Royalty revenue | 62,561 | 82,513 | 129,628 | 167,973 | ||||||||||||||||
Advertising and other revenue | 17,847 | 34,490 | 37,895 | 63,587 | ||||||||||||||||
Total revenue | $ | 1,964,847 | $ | 1,336,623 | $ | 3,875,007 | $ | 2,764,029 | ||||||||||||
Gross profit on net sales | $ | 945,680 | $ | 625,658 | $ | 1,810,426 | $ | 1,267,930 | ||||||||||||
Gross profit on royalty, advertising and other revenue | 80,408 | 117,003 | 167,523 | 231,560 | ||||||||||||||||
Total gross profit | 1,026,088 | 742,661 | 1,977,949 | 1,499,490 | ||||||||||||||||
Selling, general and administrative expenses | 953,468 | 589,333 | 1,860,476 | 1,192,004 | ||||||||||||||||
Debt modification and extinguishment costs | 40,395 | |||||||||||||||||||
Equity in income (loss) of unconsolidated affiliates, net | 813 | (74 | ) | 3,140 | 1,850 | |||||||||||||||
Earnings before interest and taxes | 73,433 | 153,254 | 80,218 | 309,336 | ||||||||||||||||
Interest expense, net | 47,379 | 28,355 | 93,328 | 57,599 | ||||||||||||||||
Pre-tax income (loss) | 26,054 | 124,899 | (13,110 | ) | 251,737 | |||||||||||||||
Income tax expense | 41,963 | 34,981 | 22,812 | 66,343 | ||||||||||||||||
Net (loss) income | (15,909 | ) | 89,918 | (35,922 | ) | 185,394 | ||||||||||||||
Less: Net income attributable to redeemable non-controlling interest | 87 | 126 | ||||||||||||||||||
Net (loss) income attributable to PVH Corp. | $ | (15,996 | ) | $ | 89,918 | $ | (36,048 | ) | $ | 185,394 | ||||||||||
Diluted net (loss) income per common share attributable to PVH Corp.(1) | $ | (0.20 | ) | $ | 1.22 | $ | (0.45 | ) | $ | 2.52 | ||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||||||
Depreciation and amortization expense | $ | 109,505 | $ | 34,333 | $ | 205,348 | $ | 67,792 | ||||||||||||
(1) | Please see Note A in the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net (loss) income per common share. |
Quarter Ended | Six Months Ended | |||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||||||
Non-GAAP Measures | ||||||||||||||||||||
Total revenue(1) | $ | 3,905,007 | ||||||||||||||||||
Total gross profit(2) | $ | 1,041,264 | 2,058,422 | |||||||||||||||||
Selling, general and administrative expenses(3) | 828,758 | $ | 584,792 | 1,606,956 | $ | 1,184,147 | ||||||||||||||
Earnings before interest and taxes(4) | 213,319 | 157,795 | 454,606 | 317,193 | ||||||||||||||||
Interest expense, net(5) | 92,488 | |||||||||||||||||||
Income tax expense(6) | 50,350 | 35,232 | 90,853 | 67,526 | ||||||||||||||||
Net income attributable to PVH Corp.(7) | 115,503 | 94,208 | 271,139 | 192,068 | ||||||||||||||||
Diluted net income per common share attributable to PVH Corp.(8) | $ | 1.39 | $ | 1.28 | $ | 3.29 | $ | 2.61 | ||||||||||||
Depreciation and amortization expense(9) | $ | 58,181 | $ | 110,298 | ||||||||||||||||
(1) Please see Table 2 for reconciliation of GAAP to non-GAAP revenue. |
(2) Please see Table 4 for reconciliation of GAAP to non-GAAP gross profit. |
(3) Please see Table 5 for reconciliation of GAAP to non-GAAP selling, general and administrative expenses (“SG&A”). |
(4) Please see Table 3 for reconciliation of GAAP to non-GAAP earnings before interest and taxes. |
(5) Please see Table 6 for reconciliation of GAAP to non-GAAP interest expense. |
(6) Please see Table 7 for reconciliation of GAAP to non-GAAP income tax expense and an explanation of the calculation of the tax effects associated with acquisition, integration, restructuring and debt modification and extinguishment costs. |
(7) Please see Table 1 for reconciliation of GAAP to non-GAAP net (loss) income. |
(8) Please see Note A in the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net (loss) income per common share. |
(9) Please see Table 8 for reconciliation of GAAP depreciation and amortization expense to non-GAAP depreciation and amortization expense. |
Table 1 - Reconciliation of GAAP net (loss) income to non-GAAP net income | ||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||||||
Net (loss) income attributable to PVH Corp. | $ | (15,996 | ) | $ | 89,918 | $ | (36,048 | ) | $ | 185,394 | ||||||||||
Diluted net (loss) income per common share attributable to PVH Corp.(1) | $ | (0.20 | ) | $ | 1.22 | $ | (0.45 | ) | $ | 2.52 | ||||||||||
Items excluded: | ||||||||||||||||||||
Gross margin associated with Warnaco acquisition (including short-lived non-cash inventory valuation adjustments) | 15,176 | 50,473 | ||||||||||||||||||
Gross margin impact of sales returns for certain Warnaco wholesale customers in connection with initiative to reduce excess inventory levels | 30,000 | |||||||||||||||||||
SG&A expenses associated with acquisition and integration of Warnaco and related restructuring | 73,386 | 158,470 | ||||||||||||||||||
SG&A expenses associated with Tommy Hilfiger integration and related restructuring | 4,541 | 7,857 | ||||||||||||||||||
Depreciation and amortization related to Warnaco acquisition (principally non-cash valuation amortization recorded in SG&A) | 51,324 | 95,050 | ||||||||||||||||||
Debt modification and extinguishment costs | 40,395 | |||||||||||||||||||
Interest expense incurred prior to the Warnaco acquisition closing date associated with $700M of senior notes | 840 | |||||||||||||||||||
Tax effect of the items above(2) | (36,411 | ) | (251 | ) | (96,065 | ) | (1,183 | ) | ||||||||||||
Discrete tax items related to the Warnaco integration | 28,024 | 28,024 | ||||||||||||||||||
Non-GAAP net income attributable to PVH Corp. | $ | 115,503 | $ | 94,208 | $ | 271,139 | $ | 192,068 | ||||||||||||
Non-GAAP diluted net income per common share attributable to PVH Corp.(1) | $ | 1.39 | $ | 1.28 | $ | 3.29 | $ | 2.61 | ||||||||||||
(1) Please see Note A in the Notes to the Consolidated GAAP Income Statements for reconciliations of diluted net (loss) income per common share. | ||||||||||||||||||||
(2) Please see Table 7 for an explanation of the calculation of the tax effects of the above items. |
Table 2 - Reconciliation of GAAP revenue to non-GAAP revenue | ||||||
Six Months Ended | ||||||
8/4/13 | ||||||
Revenue | $ | 3,875,007 | ||||
Items excluded: | ||||||
Revenue reduction due to sales returns for certain Warnaco wholesale customers in connection with initiative to reduce excess inventory levels | 30,000 | |||||
Non-GAAP revenue | $ | 3,905,007 | ||||
Table 3 - Reconciliation of GAAP earnings before interest and taxes to non-GAAP earnings before interest and taxes | ||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||||||
Earnings before interest and taxes | $ | 73,433 | $ | 153,254 | $ | 80,218 | $ | 309,336 | ||||||||||||
Items excluded: | ||||||||||||||||||||
Gross margin associated with Warnaco acquisition (including short-lived non-cash inventory valuation adjustments) | 15,176 | 50,473 | ||||||||||||||||||
Gross margin impact of sales returns for certain Warnaco wholesale customers in connection with initiative to reduce excess inventory levels | 30,000 | |||||||||||||||||||
SG&A expenses associated with acquisition and integration of Warnaco and related restructuring | 73,386 | 158,470 | ||||||||||||||||||
SG&A expenses associated with Tommy Hilfiger integration and related restructuring | 4,541 | 7,857 | ||||||||||||||||||
Depreciation and amortization related to Warnaco acquisition (principally non-cash valuation amortization recorded in SG&A) | 51,324 | 95,050 | ||||||||||||||||||
Debt modification and extinguishment costs | 40,395 | |||||||||||||||||||
Non-GAAP earnings before interest and taxes | $ | 213,319 | $ | 157,795 | $ | 454,606 | $ | 317,193 | ||||||||||||
Table 4 - Reconciliation of GAAP gross profit to non-GAAP gross profit | ||||||||||||
Quarter Ended | Six Months Ended | |||||||||||
8/4/13 | 8/4/13 | |||||||||||
Gross profit | $ | 1,026,088 | $ | 1,977,949 | ||||||||
Items excluded: | ||||||||||||
Gross margin associated with Warnaco acquisition (including short-lived non-cash inventory valuation adjustments) | 15,176 | 50,473 | ||||||||||
Gross margin impact of sales returns for certain Warnaco wholesale customers in connection with initiative to reduce excess inventory levels | 30,000 | |||||||||||
Non-GAAP gross profit | $ | 1,041,264 | $ | 2,058,422 | ||||||||
Table 5 - Reconciliation of GAAP SG&A to non-GAAP SG&A | ||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||||||
SG&A | $ | 953,468 | $ | 589,333 | $ | 1,860,476 | $ | 1,192,004 | ||||||||||||
Items excluded: | ||||||||||||||||||||
SG&A expenses associated with acquisition and integration of Warnaco and related restructuring | (73,386 | ) | (158,470 | ) | ||||||||||||||||
SG&A expenses associated with Tommy Hilfiger integration and related restructuring | (4,541 | ) | (7,857 | ) | ||||||||||||||||
Depreciation and amortization related to Warnaco acquisition (principally non-cash valuation amortization recorded in SG&A) | (51,324 | ) | (95,050 | ) | ||||||||||||||||
Non-GAAP SG&A | $ | 828,758 | $ | 584,792 | $ | 1,606,956 | $ | 1,184,147 | ||||||||||||
Table 6 - Reconciliation of GAAP net interest expense to non-GAAP net interest expense | ||||||
Six Months Ended | ||||||
8/4/13 | ||||||
Interest expense, net | $ | 93,328 | ||||
Items excluded: | ||||||
Interest expense incurred prior to the Warnaco acquisition closing date associated with $700M of senior notes | (840 | ) | ||||
Non-GAAP interest expense, net | $ | 92,488 | ||||
Table 7 - Reconciliation of GAAP income tax expense to non-GAAP income tax expense | ||||||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||||||
8/4/13 | 7/29/12 | 8/4/13 | 7/29/12 | |||||||||||||||||
Income tax expense | $ | 41,963 | $ | 34,981 | $ | 22,812 | $ | 66,343 | ||||||||||||
Items excluded: | ||||||||||||||||||||
Income tax effects of acquisition, integration, restructuring and debt modification and extinguishment costs (1) | 36,411 | 251 | 96,065 | 1,183 | ||||||||||||||||
Discrete tax items related to the Warnaco integration | (28,024 | ) | (28,024 | ) | ||||||||||||||||
Non-GAAP income tax expense | $ | 50,350 | $ | 35,232 | $ | 90,853 | $ | 67,526 | ||||||||||||
(1) The estimated tax effects of the Company’s acquisition, integration, restructuring and debt modification and extinguishment costs are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded as an acquisition, integration, restructuring and debt modification and extinguishment cost to determine if such item is tax deductible, and if so, in what jurisdiction the deduction would occur. All of the Company’s acquisition, integration, restructuring and debt modification and extinguishment costs were identified as either primarily tax deductible, with the tax benefit taken at the statutory income tax rate of the local jurisdiction, or as non-deductible, in which case the Company assumed no tax benefit. |
Table 8 - Reconciliation of GAAP depreciation and amortization to non-GAAP depreciation and amortization | ||||||||||||
Quarter Ended | Six Months Ended | |||||||||||
8/4/13 | 8/4/13 | |||||||||||
Depreciation and amortization | $ | 109,505 | $ | 205,348 | ||||||||
Items excluded: | ||||||||||||
Depreciation and amortization related to Warnaco acquisition (principally short-lived non-cash valuation amortization recorded in SG&A) | (51,324 | ) | (95,050 | ) | ||||||||
Non-GAAP depreciation and amortization | $ | 58,181 | $ | 110,298 | ||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
8/4/13 | 7/29/12 | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments | Results | Results | Adjustments | Results | ||||||||||||||||||||||
Net (loss) income attributable to PVH Corp. | $ | (15,996 | ) | $ | (131,499 | ) | (1) | $ | 115,503 | $ | 89,918 | $ | (4,290 | ) | (2) | $ | 94,208 | ||||||||||
Weighted average common shares | 81,337 | 81,337 | 70,403 | 70,403 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,681 | 1,681 | 1,105 | 1,105 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 2,095 | 2,095 | |||||||||||||||||||||||||
Total shares | 81,337 | 83,018 | 73,603 | 73,603 | |||||||||||||||||||||||
Diluted net (loss) income per common share attributable to PVH Corp. | $ | (0.20 | ) | $ | 1.39 | $ | 1.22 | $ | 1.28 | ||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||
8/4/13 | 7/29/12 | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments | Results | Results | Adjustments | Results | ||||||||||||||||||||||
Net (loss) income attributable to PVH Corp. | $ | (36,048 | ) | $ | (307,187 | ) | (1) | $ | 271,139 | $ | 185,394 | $ | (6,674 | ) | (2) | $ | 192,068 | ||||||||||
Weighted average common shares | 80,653 | 80,653 | 69,471 | 69,471 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,684 | 1,684 | 1,346 | 1,346 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 2,785 | 2,785 | |||||||||||||||||||||||||
Total shares | 80,653 | 82,337 | 73,602 | 73,602 | |||||||||||||||||||||||
Diluted net (loss) income per common share attributable to PVH Corp. | $ | (0.45 | ) | $ | 3.29 | $ | 2.52 | $ | 2.61 | ||||||||||||||||||
(1) | Represents the impact on net loss in the period ended August 4, 2013 from the elimination of (i) costs incurred in connection with the Company’s acquisition and integration of Warnaco and the related restructuring; (ii) the impact of sales returns for certain Warnaco wholesale customers in Asia in connection with an initiative to reduce excess inventory levels; (iii) the costs incurred in connection with the Company’s debt modification and extinguishment; (iv) the interest expense incurred prior to the Warnaco acquisition closing date related to the $700 million of senior notes issued to fund the acquisition; (v) the tax effects associated with these costs; and (vi) the tax expense associated with non-recurring discrete items related to the Warnaco integration. Please see Table 1 for a reconciliation of GAAP net (loss) income to non-GAAP net income. Adjustments to weighted average dilutive securities represent the dilutive impacts of securities included in the non-GAAP earnings per share calculations. Such amounts are not included in the GAAP earnings per share calculations because there are GAAP net losses attributable to PVH Corp., and, as such, the inclusion of these securities would have been antidilutive. |
8/4/13 | 7/29/12 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 628,920 | $ | 261,986 | |||
Receivables | 756,269 | 425,665 | |||||
Inventories | 1,348,598 | 909,447 | |||||
Other Current Assets | 346,858 | 222,840 | |||||
Total Current Assets | 3,080,645 | 1,819,938 | |||||
Property, Plant and Equipment | 693,857 | 484,443 | |||||
Goodwill and Other Intangible Assets | 7,400,320 | 4,261,467 | |||||
Other Assets | 339,924 | 165,640 | |||||
$ | 11,514,746 | $ | 6,731,488 | ||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||||
Accounts Payable and Accrued Expenses | $ | 1,336,755 | $ | 968,581 | |||
Short-Term Borrowings | 3,447 | 52,791 | |||||
Current Portion of Long-Term Debt | 85,000 | 88,021 | |||||
Other Liabilities | 1,841,033 | 1,125,803 | |||||
Long-Term Debt | 4,195,151 | 1,715,464 | |||||
Redeemable Non-Controlling Interest | 5,600 | ||||||
Stockholders’ Equity | 4,047,760 | 2,780,828 | |||||
$ | 11,514,746 | $ | 6,731,488 |
PVH CORP. | |||||||||||
Segment Data | |||||||||||
(In thousands) | |||||||||||
REVENUE BY SEGMENT | |||||||||||
Quarter Ended | Quarter Ended | ||||||||||
8/4/13 | 7/29/12 | ||||||||||
Calvin Klein North America | |||||||||||
Net sales | $ | 332,119 | $ | 150,546 | |||||||
Royalty revenue | 22,610 | 28,891 | |||||||||
Advertising and other revenue | 8,024 | 14,201 | |||||||||
Total | 362,753 | 193,638 | |||||||||
Calvin Klein International | |||||||||||
Net sales | 286,152 | 12,124 | |||||||||
Royalty revenue | 15,796 | 30,355 | |||||||||
Advertising and other revenue | 5,884 | 15,114 | |||||||||
Total | 307,832 | 57,593 | |||||||||
Total Calvin Klein | |||||||||||
Net sales | 618,271 | 162,670 | |||||||||
Royalty revenue | 38,406 | 59,246 | |||||||||
Advertising and other revenue | 13,908 | 29,315 | |||||||||
Total | 670,585 | 251,231 | |||||||||
Tommy Hilfiger North America | |||||||||||
Net sales | 357,081 | 324,482 | |||||||||
Royalty revenue | 6,034 | 5,101 | |||||||||
Advertising and other revenue | 1,748 | 2,285 | |||||||||
Total | 364,863 | 331,868 | |||||||||
Tommy Hilfiger International | |||||||||||
Net sales | 420,485 | 375,495 | |||||||||
Royalty revenue | 12,810 | 13,078 | |||||||||
Advertising and other revenue | 1,138 | 1,465 | |||||||||
Total | 434,433 | 390,038 | |||||||||
Total Tommy Hilfiger | |||||||||||
Net sales | 777,566 | 699,977 | |||||||||
Royalty revenue | 18,844 | 18,179 | |||||||||
Advertising and other revenue | 2,886 | 3,750 | |||||||||
Total | 799,296 | 721,906 | |||||||||
Heritage Brands Wholesale | |||||||||||
Net sales | 328,540 | 183,500 | |||||||||
Royalty revenue | 4,158 | 3,859 | |||||||||
Advertising and other revenue | 762 | 1,189 | |||||||||
Total | 333,460 | 188,548 | |||||||||
Heritage Brands Retail | |||||||||||
Net sales | 160,062 | 173,473 | |||||||||
Royalty revenue | 1,153 | 1,229 | |||||||||
Advertising and other revenue | 291 | 236 | |||||||||
Total | 161,506 | 174,938 | |||||||||
Total Heritage Brands | |||||||||||
Net sales | 488,602 | 356,973 | |||||||||
Royalty revenue | 5,311 | 5,088 | |||||||||
Advertising and other revenue | 1,053 | 1,425 | |||||||||
Total | 494,966 | 363,486 | |||||||||
Total Revenue | |||||||||||
Net sales | 1,884,439 | 1,219,620 | |||||||||
Royalty revenue | 62,561 | 82,513 | |||||||||
Advertising and other revenue | 17,847 | 34,490 | |||||||||
Total | $ | 1,964,847 | $ | 1,336,623 | |||||||
PVH CORP. | |||||||||||||||||||||||||||
Segment Data (continued) | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT | |||||||||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
8/4/13 | 7/29/12 | ||||||||||||||||||||||||||
Results | Results | ||||||||||||||||||||||||||
Under | Non-GAAP | Under | Non-GAAP | ||||||||||||||||||||||||
GAAP | Adjustments(1) | Results | GAAP | Adjustments(2) | Results | ||||||||||||||||||||||
Calvin Klein North America | $ | 39,496 | $ | (27,632 | ) | $ | 67,128 | $ | 36,412 | $ | 36,412 | ||||||||||||||||
Calvin Klein International | (56,878 | ) | (85,008 | ) | 28,130 | 23,777 | 23,777 | ||||||||||||||||||||
Total Calvin Klein | (17,382 | ) | (112,640 | ) | 95,258 | 60,189 | 60,189 | ||||||||||||||||||||
Tommy Hilfiger North America | 61,960 | 61,960 | 52,636 | 52,636 | |||||||||||||||||||||||
Tommy Hilfiger International | 37,859 | 37,859 | 41,113 | $ | (3,497 | ) | 44,610 | ||||||||||||||||||||
Total Tommy Hilfiger | 99,819 | 99,819 | 93,749 | (3,497 | ) | 97,246 | |||||||||||||||||||||
Heritage Brands Wholesale | 29,149 | (11,247 | ) | 40,396 | 13,797 | 13,797 | |||||||||||||||||||||
Heritage Brands Retail | 4,013 | 4,013 | 9,306 | 9,306 | |||||||||||||||||||||||
Total Heritage Brands | 33,162 | (11,247 | ) | 44,409 | 23,103 | 23,103 | |||||||||||||||||||||
Corporate | (42,166 | ) | (15,999 | ) | (26,167 | ) | (23,787 | ) | (1,044 | ) | (22,743 | ) | |||||||||||||||
Total earnings before interest and taxes | $ | 73,433 | $ | (139,886 | ) | $ | 213,319 | $ | 153,254 | $ | (4,541 | ) | $ | 157,795 | |||||||||||||
(1) | Adjustments for the quarter ended August 4, 2013 represent the elimination of costs incurred in connection with the Company’s acquisition and integration of Warnaco and the related restructuring. |
(2) | Adjustments for the quarter ended July 29, 2012 represent the elimination of costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring. |
PVH CORP. | |||||||||||||||||||
Segment Data (continued) | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
REVENUE BY SEGMENT | |||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||
8/4/13 | 7/29/12 | ||||||||||||||||||
Results | |||||||||||||||||||
Under | Non-GAAP | ||||||||||||||||||
Calvin Klein North America | GAAP | Adjustments(1) | Results | ||||||||||||||||
Net sales | $ | 625,459 | $ | 625,459 | $ | 312,520 | |||||||||||||
Royalty revenue | 48,026 | 48,026 | 60,199 | ||||||||||||||||
Advertising and other revenue | 16,719 | 16,719 | 26,075 | ||||||||||||||||
Total | 690,204 | 690,204 | 398,794 | ||||||||||||||||
Calvin Klein International | |||||||||||||||||||
Net sales | 541,340 | $ | (30,000 | ) | 571,340 | 21,869 | |||||||||||||
Royalty revenue | 34,149 | 34,149 | 64,520 | ||||||||||||||||
Advertising and other revenue | 12,750 | 12,750 | 28,167 | ||||||||||||||||
Total | 588,239 | (30,000 | ) | 618,239 | 114,556 | ||||||||||||||
Total Calvin Klein | |||||||||||||||||||
Net sales | 1,166,799 | (30,000 | ) | 1,196,799 | 334,389 | ||||||||||||||
Royalty revenue | 82,175 | 82,175 | 124,719 | ||||||||||||||||
Advertising and other revenue | 29,469 | 29,469 | 54,242 | ||||||||||||||||
Total | 1,278,443 | (30,000 | ) | 1,308,443 | 513,350 | ||||||||||||||
Tommy Hilfiger North America | |||||||||||||||||||
Net sales | 694,757 | 694,757 | 623,462 | ||||||||||||||||
Royalty revenue | 12,524 | 12,524 | 9,625 | ||||||||||||||||
Advertising and other revenue | 4,206 | 4,206 | 3,972 | ||||||||||||||||
Total | 711,487 | 711,487 | 637,059 | ||||||||||||||||
Tommy Hilfiger International | |||||||||||||||||||
Net sales | 872,271 | 872,271 | 829,345 | ||||||||||||||||
Royalty revenue | 24,563 | 24,563 | 23,358 | ||||||||||||||||
Advertising and other revenue | 2,352 | 2,352 | 2,509 | ||||||||||||||||
Total | 899,186 | 899,186 | 855,212 | ||||||||||||||||
Total Tommy Hilfiger | |||||||||||||||||||
Net sales | 1,567,028 | 1,567,028 | 1,452,807 | ||||||||||||||||
Royalty revenue | 37,087 | 37,087 | 32,983 | ||||||||||||||||
Advertising and other revenue | 6,558 | 6,558 | 6,481 | ||||||||||||||||
Total | 1,610,673 | 1,610,673 | 1,492,271 | ||||||||||||||||
Heritage Brands Wholesale | |||||||||||||||||||
Net sales | 683,109 | 683,109 | 437,618 | ||||||||||||||||
Royalty revenue | 8,150 | 8,150 | 7,839 | ||||||||||||||||
Advertising and other revenue | 1,366 | 1,366 | 2,357 | ||||||||||||||||
Total | 692,625 | 692,625 | 447,814 | ||||||||||||||||
Heritage Brands Retail | |||||||||||||||||||
Net sales | 290,548 | 290,548 | 307,655 | ||||||||||||||||
Royalty revenue | 2,216 | 2,216 | 2,432 | ||||||||||||||||
Advertising and other revenue | 502 | 502 | 507 | ||||||||||||||||
Total | 293,266 | 293,266 | 310,594 | ||||||||||||||||
Total Heritage Brands | |||||||||||||||||||
Net sales | 973,657 | 973,657 | 745,273 | ||||||||||||||||
Royalty revenue | 10,366 | 10,366 | 10,271 | ||||||||||||||||
Advertising and other revenue | 1,868 | 1,868 | 2,864 | ||||||||||||||||
Total | 985,891 | 985,891 | 758,408 | ||||||||||||||||
Total Revenue | |||||||||||||||||||
Net sales | 3,707,484 | (30,000 | ) | 3,737,484 | 2,532,469 | ||||||||||||||
Royalty revenue | 129,628 | 129,628 | 167,973 | ||||||||||||||||
Advertising and other revenue | 37,895 | 37,895 | 63,587 | ||||||||||||||||
Total | $ | 3,875,007 | $ | (30,000 | ) | $ | 3,905,007 | $ | 2,764,029 | ||||||||||
(1) | Adjustments for the six months ended August 4, 2013 represent the elimination of sales returns for certain Warnaco wholesale customers in Asia in connection with an initiative to reduce excess inventory levels. |
PVH CORP. | |||||||||||||||||||||||||||
Segment Data (continued) | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT | |||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||
8/4/13 | 7/29/12 | ||||||||||||||||||||||||||
Results | Results | ||||||||||||||||||||||||||
Under | Non-GAAP | Under | Non-GAAP | ||||||||||||||||||||||||
GAAP | Adjustments(1) | Results | GAAP | Adjustments(2) | Results | ||||||||||||||||||||||
Calvin Klein North America | $ | 51,934 | $ | (68,734 | ) | $ | 120,668 | $ | 72,490 | $ | 72,490 | ||||||||||||||||
Calvin Klein International | (105,032 | ) | (185,468 | ) | 80,436 | 46,003 | 46,003 | ||||||||||||||||||||
Total Calvin Klein | (53,098 | ) | (254,202 | ) | 201,104 | 118,493 | 118,493 | ||||||||||||||||||||
Tommy Hilfiger North America | 107,970 | 107,970 | 81,513 | $ | (379 | ) | 81,892 | ||||||||||||||||||||
Tommy Hilfiger International | 110,001 | 110,001 | 114,593 | (3,497 | ) | 118,090 | |||||||||||||||||||||
Total Tommy Hilfiger | 217,971 | 217,971 | 196,106 | (3,876 | ) | 199,982 | |||||||||||||||||||||
Heritage Brands Wholesale | 57,504 | (28,770 | ) | 86,274 | 34,037 | 34,037 | |||||||||||||||||||||
Heritage Brands Retail | (2,790 | ) | (2,790 | ) | 6,710 | 6,710 | |||||||||||||||||||||
Total Heritage Brands | 54,714 | (28,770 | ) | 83,484 | 40,747 | 40,747 | |||||||||||||||||||||
Corporate | (139,369 | ) | (91,416 | ) | (47,953 | ) | (46,010 | ) | (3,981 | ) | (42,029 | ) | |||||||||||||||
Total earnings before interest and taxes | $ | 80,218 | $ | (374,388 | ) | $ | 454,606 | $ | 309,336 | $ | (7,857 | ) | $ | 317,193 | |||||||||||||
(1) | Adjustments for the six months ended August 4, 2013 represent the elimination of (i) costs incurred in connection with the Company’s acquisition and integration of Warnaco and the related restructuring; (ii) the impact of sales returns for certain Warnaco wholesale customers in Asia in connection with an initiative to reduce excess inventory levels; and (iii) the costs incurred in connection with the Company’s debt modification and extinguishment. |
(2) | Adjustments for the six months ended July 29, 2012 represent the elimination of costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring. |
2013 Estimated Revenue Reconciliation | Full Year 2013 (Consolidated) | Full Year 2013 (Calvin Klein) | |||
GAAP revenue | $8.22B | $2.72B | |||
Revenue reduction due to sales returns for certain Warnaco wholesale customers in connection with initiative to reduce excess inventory levels | $0.03B | $0.03B | |||
Non-GAAP revenue | $8.25B | $2.75B |
2013 Tax Rate Reconciliation | Full Year 2013 (Estimated) | ||
GAAP tax rate range | 35.7% - 36.2% | ||
Adjustment for discrete tax items related to the Warnaco integration | (10.2)% | ||
Non-GAAP tax rate range | 25.5% - 26.0% |
Current Guidance | Previous Guidance | |||||||||||
2013 Net Income Per Common Share Reconciliations | Full Year 2013 (Estimated) | Third Quarter 2013 (Estimated) | Second Quarter 2013 (Estimated) | |||||||||
GAAP net income per common share attributable to PVH Corp. | $ | 2.18 | $ | 1.58 | $ | 0.30 | ||||||
Estimated per common share impact of after tax acquisition, integration, restructuring and debt modification and extinguishment costs and actuarial loss on retirement plans | $ | 4.82 | $ | 0.62 | $ | 1.05 | ||||||
Net income per common share attributable to PVH Corp. excluding impact of acquisition, integration, restructuring and debt modification and extinguishment costs and actuarial loss on retirement plans | $ | 7.00 | $ | 2.20 | $ | 1.35 |
Full Year 2012 | Third Quarter 2012 | |||||||||||||||||||||||
(Actual) | (Actual) | |||||||||||||||||||||||
Results Under GAAP | Adjustments | Non-GAAP Results | Results Under GAAP | Adjustments | Non-GAAP Results | |||||||||||||||||||
Net income | $ | 433.8 | $ | (52.5 | ) | (1) | $ | 486.4 | $ | 167.7 | $ | (8.1 | ) | (2) | $ | 175.8 | ||||||||
Total weighted average shares | 73.9 | 73.9 | 74.0 | 74.0 | ||||||||||||||||||||
Diluted net income per common share | $ | 5.87 | $ | 6.58 | $ | 2.27 | $ | 2.38 |