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Hilfiger beats lowered mark
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February 2, 2000: 8:31 a.m. ET
Clothing maker to restructure some operations, look at strategic options
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NEW YORK (CNNfn) - Clothing manufacturer Tommy Hilfiger Corp. beat lowered earnings expectations for its fiscal third quarter Wednesday, and said it will restructure some businesses and hire an investment bank to look at strategic opportunities to raise its share price.
The company had net income of $59.1 million, or 62 cents a diluted share, in the quarter ended Dec. 31. Analysts surveyed by First Call had forecast 59 cents for the quarter after the company issued a warning Jan. 13. The estimate before the warning was 73 cents a share.
Hilfiger said in January that aggressive pricing in U.S. department stores was responsible for lowered expectations in the fiscal third and fourth quarters.
The company earned $57.8 million, or 61 cents a share, in the year-ago quarter.
Revenue rose 12.5 percent to $521.2 million from $463.2 million a year ago.
The company said it is postponing the planned launch of its dress-up line, and that division will be consolidated in the women's sportswear division in an effort to concentrate resources.
It also will change the focus of some existing specialty stores and change the location of specialty stores in the London and Los Angeles markets. It said these and other restructuring moves will result in a pre-tax charge of up to $65 million, or about 5 cents a share, in the current quarter.
The company also said it is hiring Morgan Stanley Dean Witter to consider options including, but not limited to, acquisitions, new business opportunities and the repurchase of company shares. It expects to receive the firm's recommendations by early March.
Hilfiger said it should still be able to meet the lowered earnings expectations for the fiscal fourth quarter with profit of 35 to 45 cents a share, down from 48 cents a share a year ago.
For the first fiscal nine months, the company had net income of $173.9 million, or $1.81 a diluted share, compared with pro forma results of $131.2 million, or $1.39 a share, in the year earlier period. Pro forma earnings before special charges in the earlier period were $143.1 million, or $1.51 a share.
Revenue for the nine months rose to $428.5 million from $371.9 million on a pro forma basis. The pro forma numbers include results from Pepe Jeans USA and Tommy Hilfiger Canada, acquired in May 1998, for the full nine months.
Shares of Hilfiger (TOM: Research, Estimates) were up 5/16 to 12-3/8 in trading Tuesday. 
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Tommy Hilfiger Corp.
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