Phillips-Van Heusen Corporation reported first quarter 2007 net income of $53.0 million, or $0.92 per share, which was $0.07 ahead of its previous earnings guidance.
This represents a 24% improvement over first quarter 2006 non-GAAP earnings per share of $0.74. First quarter 2006 GAAP net income was $48.7 million, or $0.87 per share.
First quarter 2007 earnings includes $1.9 million of pre-tax income, or $0.02 per share, comprised of a $3.3 million gain associated with the release of cash held in escrow in connection with the sale in the first quarter of 2006 of minority interests in certain entities, offset in part by $1.4 million of start-up costs associated with the Company's Timberland wholesale sportswear business and Calvin Klein better specialty retail stores.
Aside from this increase to earnings, the first quarter earnings per share improvement was driven by a 17% revenue increase, fueled by a 37% increase in Calvin Klein royalty revenues.
Gross margin improved 150 basis points, due principally to the growth in Calvin Klein royalty revenue and strong product sell-throughs in the Company's wholesale dress shirt and outlet retail businesses.
Partially offsetting these increases was a decrease in gross margin in the Company's wholesale sportswear business, which was negatively impacted by the overall weak retail environment resulting in slower than planned sell-throughs at customer accounts.
Revenues: Total revenues in the first quarter of 2007 increased 17% to $591.9 million from $506.4 million in the prior year. Revenues increased 43% in the Company's Calvin Klein licensing business and 14% in the Company's combined wholesale and retail business.
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