Here is some belatedly good news. Tommy Hilfiger has launched a new brand of womens shoes; it awarded the mfg business to its old partner SRR.
FOCUS-Tommy Hilfiger's profits rise on licensee purchases
By Gilles Castonguay
NEW YORK, Nov 4 (Reuters) - Sportswear designer Tommy Hilfiger Corp. (NYSE:TOM - news) said on Wednesday its earnings rose more than 50 percent in the second quarter, beating Wall Street estimates, as its acquisition of two licensees began to pay off.
Hilfiger earned $56.8 million, or $1.20 per diluted share, for the quarter ended Sept. 30, 55.8 percent more than the $36.2 million, or 77 cents a share, for the same period last year if results of the recently acquired firms were included.
First Call Corp.'s mean estimate from a poll of industry analysts had forecast earnings of $1.11 a share.
Hilfiger, whose popular line includes everything from shoes and clothes to fragrances, said net revenue surged 38.5 percent to $465.3 million from $335.9 million in the year-ago quarter.
Hilfiger bought licensees Pepe Jeans USA and Tommy Hilfiger Canada last May. Excluding their profits, Hilfiger earned $31.9 million, or 84 cents per share, in the year-ago quarter.
''Our strong second-quarter performance ... demonstrates the continued impact of the acquisition on sales and earnings,'' Joel Horowitz, chief executive of the Hong Kong-based company, said.
''The integration of the acquired businesses is proceeding very smoothly,'' he said. ''Each of our business components generated increased revenues, with particularly strong sales gains in womenswear and childrenswear.''
Hilfiger's stock jumped $9.50, or more than 20 percent, to $56, placing it among the leading percentage gainers on the New York Stock Exchange.
The price was its highest in more than two months, the culmination of a 50 percent run-up in the last three weeks.
''They (earnings) came in much higher than anticipated,'' Kathleen Fraser at Standard & Poor's Equity Group said.
Laurence Leeds, managing director at Buckingham Research Group, said the market appeared to be acknowledging the company as a good investment, given the optimistic growth forecast it made during a conference call with analysts early in the day.
''After beating numbers for 24 consecutive quarters ... I think the investment community decided they were for real,'' he said, adding that Hilfiger did not give any specific forecast.
Hilfiger said in a statement it had launched two new products -- women's footwear and sleepwear -- during the quarter through licensing agreements with Stride Rite Corp. (NYSE:SRR - news) and Russell-Newman Inc.
It also said it had named Lawrence Stroll as co-chairman of the board of directors. Stroll had been director and strategic advisor of the company ever since he helped found it.
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