PVH sees cost pressures easing in second half, shares rise

Stock Market Predictions

(Global Markets) - Clothing maker PVH Corp (PVH.N) raised its profit outlook for the year, saying margin pressures from high product costs would abate in the second half of the year, sending its shares up 3 percent in after-market trade.

Climbing raw material costs and higher spending on advertising have been denting the clothier's operating margins.

The company has banked on the popularity of its Tommy Hilfiger and Calvin Klein brands to increase prices, relieving some pressure on its margins.

Tommy Hilfiger reported an 8 percent increase in revenue in the first quarter, while Calvin Klein's revenue grew 7 percent.

PVH, which reported better-than-expected quarterly results on strong demand for the two brands, has also been expanding its international business to drive sales.

The New York-based company, which shortened its name from Phillips-Van Heusen Corp last year, expects second-quarter adjusted earnings of $1.18 to $1.20 per share.

Analysts on average were expecting $1.18 per share, according to Thomson Global Markets I/B/E/S.

The company, which has beat market expectations for more than two years, raised its full-year adjusted earnings outlook to $6.15 to $6.25 per share, from $6.10 to $6.20.

First-quarter net income rose to $93.1 million, or $1.27 per share, from $57.7 million, or 79 cents per share, last year.

Excluding items, the company earned $1.30 per share.

Sales rose about 4 percent to $1.43 billion.

Analysts on average were expecting earnings of $1.26 per share, on revenue of $1.40 billion.

PVH shares, which have risen about 9 percent this year, rose to $79.97 in extended trade. They closed at $77.37 on Wednesday on the New York Stock Exchange.

(Reporting by Ranjita Ganesan; Editing by Viraj Nair)