Tommy Hilfiger's loss narrower than expected

Wednesday, August 4th 2004, 9:35 am

By: News On 6

NEW YORK (Dow Jones/AP) _ Fashion designer Tommy Hilfiger Corp. swung to a first-quarter loss as revenue in its wholesale segment decreased 20 percent, offsetting gains in its retail business.

Hong Kong-based Hilfiger said Wednesday it posted a first-quarter loss of $7.6 million, or 8 cents a share, beating the loss of 10 cents a share expected by analysts surveyed by Thomson First Call.

A year earlier, Hilfiger reported net income of $17 million, or 19 cents a share. The company earned $9.8 million, or 11 cents a share, excluding a lawsuit settlement gain in the prior year.

In June, the company said it expected its first-quarter loss to range from 10 cents to 13 cents a share.

``While we reported a loss for the quarter, our results were in line with our expectations and, in fact, due to the timing of shipments, slightly better than we previously forecast,'' Hilfiger president and chief executive David Dyer said in a prepared statement.

Hilfiger's first-quarter revenue decreased to $328.6 million from $367.2 million a year ago.

Revenue in Hilfiger's wholesale segment fell 20 percent to $210 million from $264 million last year. Retail revenue increased 15.5 percent to $103.3 million from $89.4 million due to new stores and expansions.

The company continues to expect its fiscal 2005 income before items to decrease in the mid-teen percentage range from the $1.50 a share earned in fiscal 2004. Wall Street expects Hilfiger to earn $1.27 a share for fiscal 2005 ending next March.

Hilfiger also backed its fiscal 2005 revenue guidance, calling for a high single digit percentage decrease from the $1.88 billion generated last year. Analysts expect Hilfiger to generate revenue of $1.73 billion.

Tommy Hilfiger expects capital expenditures of about $70 million for fiscal 2005 for expansion and maintenance of in-store shops and fixtured areas.

The company also said it expects to consolidate and enhance some facilities. The efforts could result in nonrecurring charges of about 3 cents a share for the rest of the year. These deals could require additional capital expenditures of $10 million to $15 million for the year, the company added.