-
Third quarter
-
Revenue: Increased 4% to
$2.363 billion compared to the prior year period (increased 1% on a constant currency basis); in line with guidance of an increase of mid single-digits (increase low single-digits on a constant currency basis). -
EPS
-
GAAP basis:
$2.66 exceeded guidance of approximately$2.43 -
Non-GAAP basis:
$2.90 exceeded guidance of approximately$2.70
-
GAAP basis:
-
Revenue: Increased 4% to
-
Full year outlook
-
Revenue: Projected to increase approximately 1% (increase 1% on a constant currency basis) compared to an increase of 3% to 4% (increase 2% to 3% on a constant currency basis) previously
- Outlook includes the impact from the recently concluded sale of the Heritage Brands intimate apparel business.
-
EPS:
-
GAAP basis: Raising to approximately
$9.75 from approximately$9.60 previously -
Non-GAAP basis: Raising to approximately
$10.45 from approximately$10.35 previously
-
GAAP basis: Raising to approximately
-
Revenue: Projected to increase approximately 1% (increase 1% on a constant currency basis) compared to an increase of 3% to 4% (increase 2% to 3% on a constant currency basis) previously
-
Closed the sale of the Heritage Brands intimate apparel business in
November 2023 , with approximately$150 million of net proceeds to be utilized to repurchase shares in 2023. Planned share repurchases in 2023 to increase to approximately$550 million from up to$400 million previously.
Non-GAAP Amounts:
Amounts stated to be on a non-GAAP basis exclude the items that are defined or described in greater detail near the end of this release under the heading “Non-GAAP Exclusions.” Amounts stated on a constant currency basis also are deemed to be on a non-GAAP basis. Reconciliations of amounts on a GAAP basis to amounts on a non-GAAP basis are presented after the Non-GAAP Exclusions section and identify and quantify all excluded items.
Third Quarter Review:
-
Revenue increased 4% compared to the prior year period (increased 1% on a constant currency basis) reflecting growth in the direct-to-consumer businesses in all regions. Overall revenue in the Company’s international businesses increased 1% on a constant currency basis over the prior year period, despite an increasingly challenging macroeconomic environment in
Europe . InNorth America , revenue in theTommy Hilfiger andCalvin Klein brand businesses combined grew 2% compared to the prior year period.- Direct-to-consumer revenue increased 8% compared to the prior year period (increased 6% on a constant currency basis), with growth in both the Company’s owned and operated stores and digital commerce business in all regions.
- Wholesale revenue increased 1% compared to the prior year period (decreased 3% on a constant currency basis) as wholesale customers continue to take a cautious approach.
- Total digital revenue increased 13% compared to the prior year period (increased 8% on a constant currency basis), with growth in both the Company’s owned and operated digital commerce revenue and its wholesale sales to traditional retailers’ ecommerce businesses and pure players. Total digital penetration as a percentage of total revenue was approximately 20%.
- Gross margin was 56.7% compared to 55.9% in the prior year period. The increase reflects benefits from lower freight costs and a favorable shift in regional and channel mix, partially offset by higher product costs, including an approximately 100 basis point negative impact on inventory costs due to foreign currency exchange rates.
- Inventory decreased 19% compared to the prior year period, in line with expectations, as the Company continues to proactively manage its inventory levels towards its previously announced goal of a 25% reduction in inventory as a percentage of sales.
Third Quarter Consolidated Results:
-
Revenue increased 4% to
$2.363 billion compared to the prior year period (increased 1% on a constant currency basis).-
Tommy Hilfiger revenue increased 4% compared to the prior year period (flat on a constant currency basis).-
Tommy Hilfiger International revenue increased 3% (decreased 3% on a constant currency basis). -
Tommy Hilfiger North America revenue increased 6%.
-
-
Calvin Klein revenue increased 6% compared to the prior year period (increased 3% on a constant currency basis).-
Calvin Klein International revenue increased 10% (increased 6% on a constant currency basis). -
Calvin Klein North America revenue decreased 1% driven by a decrease in the wholesale business.
-
- Heritage Brands revenue decreased 11% compared to the prior year period.
-
-
Earnings (loss) before interest and taxes (“EBIT”) on a GAAP basis was
$230 million , inclusive of a$9 million positive impact due to foreign currency translation, compared to$(214) million in the prior year period. Included in the third quarter of the prior year period were costs of$434 million , including a noncash goodwill impairment charge of$417 million and other costs described under the heading “Non-GAAP Exclusions” later in this release. Included in the third quarter of 2023 were costs of$19 million described under the heading “Non-GAAP Exclusions” later in this release. EBIT on a non-GAAP basis for these periods excludes these amounts.
EBIT on a non-GAAP basis was$249 million , inclusive of a$9 million positive impact due to foreign currency translation, compared to$220 million in the prior year period. The increase was driven by the revenue growth and the gross margin improvement discussed above. The Company continues to take a disciplined approach to managing expenses, driving cost efficiencies while making targeted investments to drive its strategic initiatives. -
Earnings (loss) per share (“EPS”)
-
GAAP basis:
$2.66 compared to$(2.88) in the prior year period. -
Non-GAAP basis:
$2.90 compared to$2.60 in the prior year period.
-
GAAP basis:
EPS on both a GAAP and a non-GAAP basis for the third quarter of 2023 includes the positive impact of
EPS on a GAAP basis for these periods also included the amounts for the applicable period described under the heading “Non-GAAP Exclusions” later in this release, including the
-
Interest expense increased to
$22 million from$19 million in the prior year period primarily due to higher interest rates. - Effective tax rate was 22.2% on a GAAP basis as compared to 19.8% in the prior year period. The effective tax rate was 22.1% on a non-GAAP basis as compared to 15.7% in the prior year period.
Stock Repurchase Program:
Delivering on its commitment under the PVH+ Plan to return excess cash to stockholders, the Company repurchased 0.9 million shares of its common stock for
Sale of the Heritage Brands Intimate Apparel Business:
The Company completed its previously announced sale of its Heritage Brands intimate apparel business on
2023 Outlook:
Full Year 2023 Guidance
- Revenue is projected to increase approximately 1% as compared to 2022 (increase approximately 1% on a constant currency basis), including a benefit of less than 1% from the 53rd week in 2023 and a negative impact of less than 1% related to the sale of the Heritage Brands intimate apparel business.
-
EPS
-
GAAP basis: Approximately
$9.75 compared to$3.03 in 2022. -
Non-GAAP basis: Approximately
$10.45 compared to$8.97 in 2022.
-
GAAP basis: Approximately
The 2023 EPS projections on both a GAAP and a non-GAAP basis include the estimated positive impact of approximately
EPS on a GAAP basis for these periods also include the amounts described under the heading “Non-GAAP Exclusions” later in this release. EPS on a non-GAAP basis exclude these amounts.
-
Interest expense is projected to increase to approximately
$93 million compared to$83 million in 2022 primarily due to higher interest rates. - Effective tax rate is projected to be approximately 22%.
Fourth Quarter 2023 Guidance
- Revenue is projected to decrease 3% to 4% as compared to the fourth quarter of 2022 (decrease 3% to 4% on a constant currency basis). The benefit of the 53rd week in 2023 is mostly offset by the revenue reduction related to the sale of the Heritage Brands intimate apparel business.
-
EPS
-
GAAP basis: Approximately
$3.48 compared to$2.18 in the prior year period. -
Non-GAAP basis: Approximately
$3.45 compared to$2.38 in the prior year period.
-
GAAP basis: Approximately
The fourth quarter 2023 EPS projections include the estimated positive impact of approximately
EPS on a GAAP basis for these periods also include the amounts described under the heading “Non-GAAP Exclusions” later in this release. EPS on a non-GAAP basis exclude these amounts.
-
Interest expense is projected to increase to approximately
$25 million compared to$22 million in the fourth quarter of 2022 primarily due to higher interest rates. - Effective tax rate is projected to be approximately 22%.
Please see the section entitled “Full Year and Quarterly Reconciliations of GAAP to Non-GAAP Amounts” at the end of this release for further detail and reconciliations of GAAP to non-GAAP amounts discussed in this section.
Non-GAAP Exclusions:
The discussions in this release that refer to non-GAAP amounts exclude the following:
-
Estimated pre-tax net gain of approximately
$10 million to be recorded in the fourth quarter of 2023 in connection with the sale of the Company’s Heritage Brands intimate apparel business, which includes an estimated gain on the sale, less costs to sell, and severance and other termination benefits associated with the transaction. -
Estimated pre-tax restructuring costs of approximately
$65 million incurred and expected to be incurred in 2023 consisting principally of severance related to actions taken in the second and third quarters of 2023 under the plans initially announced inAugust 2022 to reduce people costs in the Company’s global offices by approximately 10% by the end of 2023, of which$39 million was incurred in the second quarter,$19 million was incurred in the third quarter and approximately$7 million is expected to be incurred in the fourth quarter. -
Pre-tax gain of
$78 million recorded in the fourth quarter of 2022 related to the recognized actuarial gain on retirement plans. -
Pre-tax noncash goodwill impairment charge of
$417 million recorded in the third quarter of 2022, which was non-operational and driven by a significant increase in discount rates. -
Pre-tax restructuring costs of
$20 million incurred in 2022, consisting principally of severance related to initial actions under the plans announced inAugust 2022 to reduce people costs in the Company’s global offices by approximately 10% by the end of 2023, of which$17 million was incurred in the third quarter and$4 million was incurred in the fourth quarter. -
Pre-tax net costs of
$43 million recorded in 2022 in connection with the Company’s decision to exit from itsRussia business, primarily consisting of noncash asset impairments and a gain on contract terminations, of which$50 million of charges were recorded in the second quarter and an$8 million gain was recorded in the fourth quarter. -
Pre-tax gain of
$16 million recorded in the second quarter of 2022 in connection with the sale of the Company’s equity investment inKarl Lagerfeld Holding B.V . - Estimated tax effects associated with the above pre-tax items, which are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it had identified above as a non-GAAP exclusion to determine if such item was (i) taxable or tax deductible, in which case the tax effect was taken at the applicable income tax rate in the local jurisdiction, or (ii) non-taxable or non-deductible, in which case the Company assumed no tax effect.
The Company presents constant currency revenue information, which is a non-GAAP financial measure, because it is a global company that transacts business in multiple currencies and reports financial information in
The Company presents non-GAAP financial measures, including constant currency revenue information, as a supplement to its GAAP results. The Company believes presenting non-GAAP financial measures provides useful information to investors, as it provides information to assess how its businesses performed excluding the effects of non-recurring and non-operational amounts and the effects of changes in foreign currency exchange rates, as applicable, and (i) facilitates comparing the results being reported against past and future results by eliminating amounts that it believes are not comparable between periods and (ii) assists investors in evaluating the effectiveness of the Company’s operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. The Company believes that investors often look at ongoing operations of an enterprise as a measure of assessing performance. The Company uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s Board of Directors and others. The Company’s results excluding non-recurring and non-operational amounts are also the basis for certain incentive compensation calculations. Non-GAAP financial measures should be viewed in addition to, and not in lieu of or as superior to, the Company’s operating performance calculated in accordance with GAAP. The non-GAAP financial measures presented may not be comparable to similarly described measures reported by other companies.
Please see tables 1 through 6 and the sections entitled “Reconciliations of Constant Currency Revenue” and “Full Year and Quarterly Reconciliations of GAAP to Non-GAAP Amounts” later in this release for reconciliations of GAAP to non-GAAP amounts.
Conference Call Information:
The Company will host a conference call to discuss its third quarter earnings release on Thursday,
|
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking statements in this press release and made during the conference call/webcast, including, without limitation, statements relating to the Company’s future revenue, earnings, plans, strategies, objectives, expectations and intentions are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated, including, without limitation, (i) the Company’s plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company’s ability to realize anticipated benefits and savings from divestitures, restructurings and similar plans, such as the headcount cost reduction initiative announced in
This press release includes, and the conference call/webcast will include, certain non-GAAP financial measures, as defined under
The Company does not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimate regarding revenue or earnings, whether as a result of the receipt of new information, future events or otherwise.
|
Consolidated GAAP Statements of Operations
(In millions, except per share data)
|
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|
|
|
|
|
|
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|||||
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Quarter Ended |
|
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Nine Months Ended |
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Net sales |
|
$ |
2,225.8 |
|
$ |
2,144.7 |
|
|
|
|
$ |
6,382.1 |
|
$ |
6,182.4 |
|
|
Royalty revenue |
|
|
108.0 |
|
|
105.4 |
|
|
|
|
|
272.8 |
|
|
273.7 |
|
|
Advertising and other revenue |
|
|
29.1 |
|
|
30.7 |
|
|
|
|
|
72.9 |
|
|
79.4 |
|
|
Total revenue |
|
$ |
2,362.9 |
|
$ |
2,280.8 |
|
|
|
|
$ |
6,727.8 |
|
$ |
6,535.5 |
|
|
|
|
|
|
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|
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|
|||||
Gross profit |
|
$ |
1,339.4 |
|
$ |
1,274.2 |
|
|
|
|
$ |
3,862.0 |
|
$ |
3,732.4 |
|
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|
|
|
|
|
|
|
|
|
|
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|||||
Selling, general and administrative expenses |
|
|
1,123.8 |
|
|
1,085.0 |
|
|
|
|
|
3,326.3 |
|
|
3,194.8 |
|
|
|
|
|
|
|
|
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|
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|
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|
|
|||||
|
|
|
— |
|
|
417.1 |
|
|
|
|
|
— |
|
|
417.1 |
|
|
|
|
|
|
|
|
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|
|||||
Non-service related pension and postretirement income |
|
|
0.5 |
|
|
3.4 |
|
|
|
|
|
1.4 |
|
|
10.2 |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|||||
Equity in net income of unconsolidated affiliates |
|
|
13.7 |
|
|
10.5 |
|
|
|
|
|
34.8 |
|
|
42.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings (loss) before interest and taxes |
|
|
229.8 |
|
|
(214.0 |
) |
|
|
|
|
571.9 |
|
|
173.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net |
|
|
22.2 |
|
|
18.8 |
|
|
|
|
|
67.8 |
|
|
60.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||
Pre-tax income (loss) |
|
|
207.6 |
|
|
(232.8 |
) |
|
|
|
|
504.1 |
|
|
112.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income tax expense (benefit) |
|
|
46.0 |
|
|
(46.1 |
) |
|
|
|
|
112.3 |
|
|
50.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
$ |
161.6 |
|
$ |
(186.7 |
) |
|
|
|
$ |
391.8 |
|
$ |
61.7 |
|
|
|
|
|
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|
|||||
Diluted net income (loss) per common share (1) |
|
$ |
2.66 |
|
$ |
(2.88 |
) |
|
|
|
$ |
6.29 |
|
$ |
0.92 |
|
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|||||
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Quarter Ended |
|
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Nine Months Ended |
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Depreciation and amortization expense |
|
$ |
75.2 |
|
$ |
73.1 |
|
|
|
|
$ |
223.0 |
|
$ |
225.3 |
|
|
|
|
|
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|
Please see following pages for information related to non-GAAP measures discussed in this release.
(1) |
Please see Note A in Notes to Consolidated GAAP Statements of Operations for the reconciliations of GAAP diluted net income (loss) per common share to diluted net income per common share on a non-GAAP basis. |
Non-GAAP Measures
The Company believes it is useful to investors to present its results for the periods ended
The following table presents the non-GAAP measures that are discussed in this release. Please see Tables 1 through 6 for the reconciliations of the GAAP amounts to amounts on a non-GAAP basis.
|
|
Quarter Ended |
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Nine Months Ended |
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Non-GAAP Measures |
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||||
Selling, general and administrative expenses (1) |
|
$ |
1,105.0 |
|
$ |
1,068.3 |
|
|
|
$ |
3,268.5 |
|
$ |
3,127.6 |
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|
— |
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|
— |
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||
Equity in net income of unconsolidated affiliates (3) |
|
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|
26.5 |
|
|
|||
Earnings before interest and taxes (4) |
|
|
248.6 |
|
|
219.8 |
|
|
|
|
629.7 |
|
|
641.5 |
|
|
Income tax expense (5) |
|
|
50.0 |
|
|
31.5 |
|
|
|
|
125.1 |
|
|
138.4 |
|
|
Net income (6) |
|
|
176.4 |
|
|
169.5 |
|
|
|
|
436.8 |
|
|
442.2 |
|
|
Diluted net income per common share (7) |
|
$ |
2.90 |
|
$ |
2.60 |
|
|
|
$ |
7.01 |
|
$ |
6.60 |
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(1) |
Please see Table 3 for the reconciliations of GAAP selling, general and administrative (“SG&A”) expenses to SG&A expenses on a non-GAAP basis. |
(2) |
Please see Table 4 for the reconciliations of GAAP goodwill impairment to goodwill impairment on a non-GAAP basis. |
(3) |
Please see Table 5 for the reconciliation of GAAP equity in net income of unconsolidated affiliates to equity in net income of unconsolidated affiliates on a non-GAAP basis. |
(4) |
Please see Table 2 for the reconciliations of GAAP earnings (loss) before interest and taxes to earnings before interest and taxes on a non-GAAP basis. |
(5) |
Please see Table 6 for the reconciliations of GAAP income tax expense (benefit) to income tax expense on a non-GAAP basis and an explanation of the calculation of the tax effects associated with the pre-tax items identified as non-GAAP exclusions. |
(6) |
Please see Table 1 for the reconciliations of GAAP net income (loss) to net income on a non-GAAP basis. |
(7) |
Please see Note A in Notes to Consolidated GAAP Statements of Operations for the reconciliations of GAAP diluted net income (loss) per common share to diluted net income per common share on a non-GAAP basis. |
Reconciliations of GAAP to Non-GAAP Amounts
(In millions, except per share data)
Table 1 - Reconciliations of GAAP net income (loss) to net income on a non-GAAP basis | ||||||||||||||||||||
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|
Quarter Ended |
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Nine Months Ended |
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|
||||||||||||
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|
||||||||
Net income (loss) |
|
$ |
161.6 |
|
|
$ |
(186.7 |
) |
|
|
|
$ |
391.8 |
|
|
$ |
61.7 |
|
|
|
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|
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||||||||
Diluted net income (loss) per common share (1) |
|
$ |
2.66 |
|
|
$ |
(2.88 |
) |
|
|
|
$ |
6.29 |
|
|
$ |
0.92 |
|
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Pre-tax items excluded: |
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|
||||||||
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|
||||||||
SG&A expenses associated with the |
|
|
|
|
|
|
|
|
|
|
50.5 |
|
|
|
||||||
|
|
|
|
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|
|
|
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|
|
|
|
||||||||
SG&A expenses associated with the 2022 cost savings initiative |
|
|
18.8 |
|
|
|
16.7 |
|
|
|
|
|
57.8 |
|
|
|
16.7 |
|
|
|
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|
||||||||
|
|
|
|
|
417.1 |
|
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|
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|
|
417.1 |
|
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|
||||
|
|
|
|
|
|
|
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|
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|
||||||||
Gain in connection with the Karl Lagerfeld transaction (recorded in equity in net income of unconsolidated affiliates) |
|
|
|
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|
|
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|
|
|
(16.1 |
) |
|
|
||||||
|
|
|
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|
||||||||
Tax effects of the pre-tax items above (2) |
|
|
(4.0 |
) |
|
|
(77.6 |
) |
|
|
|
|
(12.8 |
) |
|
|
(87.7 |
) |
|
|
|
|
|
|
|
|
|
|
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|
|
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|
||||||||
Net income on a non-GAAP basis |
|
$ |
176.4 |
|
|
$ |
169.5 |
|
|
|
|
$ |
436.8 |
|
|
$ |
442.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per common share on a non-GAAP basis (1) |
|
$ |
2.90 |
|
|
$ |
2.60 |
|
|
|
|
$ |
7.01 |
|
|
$ |
6.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Please see Note A in Notes to the Consolidated GAAP Statements of Operations for the reconciliations of GAAP diluted net income (loss) per common share to diluted net income per common share on a non-GAAP basis. |
(2) |
Please see Table 6 for an explanation of the calculation of the tax effects of the above items. |
Table 2 - Reconciliations of GAAP earnings (loss) before interest and taxes to earnings before interest and taxes on a non-GAAP basis | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Quarter Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings (loss) before interest and taxes |
|
$ |
229.8 |
|
$ |
(214.0 |
) |
|
|
|
$ |
571.9 |
|
$ |
173.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Items excluded: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SG&A expenses associated with the |
|
|
|
|
|
|
|
|
|
|
50.5 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SG&A expenses associated with the 2022 cost savings initiative |
|
|
18.8 |
|
|
16.7 |
|
|
|
|
|
57.8 |
|
|
16.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
417.1 |
|
|
|
|
|
|
|
417.1 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gain in connection with the Karl Lagerfeld transaction (recorded in equity in net income of unconsolidated affiliates) |
|
|
|
|
|
|
|
|
|
|
(16.1 |
) |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings before interest and taxes on a non-GAAP basis |
|
$ |
248.6 |
|
$ |
219.8 |
|
|
|
|
$ |
629.7 |
|
$ |
641.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of GAAP to Non-GAAP Amounts (continued)
(In millions, except per share data)
Table 3 - Reconciliations of GAAP SG&A expenses to SG&A expenses on a non-GAAP basis |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quarter Ended |
|
|
|
Nine Months Ended |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SG&A expenses |
|
$ |
1,123.8 |
|
|
$ |
1,085.0 |
|
|
|
|
$ |
3,326.3 |
|
|
$ |
3,194.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Items excluded: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses associated with the |
|
|
|
|
|
|
|
|
|
|
(50.5 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses associated with the 2022 cost savings initiative |
|
|
(18.8 |
) |
|
|
(16.7 |
) |
|
|
|
|
(57.8 |
) |
|
|
(16.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SG&A expenses on a non-GAAP basis |
|
$ |
1,105.0 |
|
|
$ |
1,068.3 |
|
|
|
|
$ |
3,268.5 |
|
|
$ |
3,127.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4 - Reconciliations of GAAP goodwill impairment to goodwill impairment on a non-GAAP basis |
||||||||||||
|
|
|
|
|
|
|
|
|
||||
|
|
Quarter Ended |
|
|
|
Nine Months Ended |
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
417.1 |
|
|
|
|
$ |
417.1 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Item excluded: |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
|
(417.1 |
) |
|
|
|
|
(417.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Table 5 - Reconciliation of GAAP equity in net income of unconsolidated affiliates to equity in net income of unconsolidated affiliates on a non-GAAP basis |
||||||
|
|
|
|
|
||
|
|
Nine Months Ended |
|
|
||
|
|
|
|
|
||
|
|
|
|
|
||
Equity in net income of unconsolidated affiliates |
|
$ |
42.6 |
|
|
|
|
|
|
|
|
||
Item excluded: |
|
|
|
|
||
|
|
|
|
|
||
Gain in connection with the Karl Lagerfeld transaction |
|
|
(16.1 |
) |
|
|
|
|
|
|
|
||
Equity in net income of unconsolidated affiliates on a non-GAAP basis |
|
$ |
26.5 |
|
|
|
|
|
|
|
|
Reconciliations of GAAP to Non-GAAP Amounts (continued)
(In millions, except per share data)
Table 6 - Reconciliations of GAAP income tax expense (benefit) to income tax expense on a non-GAAP basis |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Quarter Ended |
|
|
|
Nine Months Ended |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income tax expense (benefit) |
|
$ |
46.0 |
|
$ |
(46.1 |
) |
|
|
|
$ |
112.3 |
|
$ |
50.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Item excluded: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Tax effects of pre-tax items identified as non-GAAP exclusions (1) |
|
|
4.0 |
|
|
77.6 |
|
|
|
|
|
12.8 |
|
|
87.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income tax expense on a non-GAAP basis |
|
$ |
50.0 |
|
$ |
31.5 |
|
|
|
|
$ |
125.1 |
|
$ |
138.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The estimated tax effects associated with the Company’s exclusions on a non-GAAP basis are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each pre-tax item that it had identified above as a non-GAAP exclusion to determine if such item was (i) taxable or tax deductible, in which case the tax effect was taken at the applicable income tax rate in the local jurisdiction, or (ii) non-taxable or non-deductible, in which case the Company assumed no tax effect. |
Notes to Consolidated GAAP Statements of Operations
(In millions, except per share data)
A. The Company computed its diluted net income (loss) per common share as follows:
|
|
Quarter Ended |
|
|
|
Quarter Ended |
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
|
|
GAAP |
|
|
|
Non-GAAP |
|
|
|
GAAP |
|
|
|
Non-GAAP |
|
|||||||||
|
|
Results |
|
Adjustments (1) |
|
Results |
|
|
|
Results |
|
Adjustments (2) |
|
Results |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
|
$ |
161.6 |
|
$ |
(14.8 |
) |
|
$ |
176.4 |
|
|
|
$ |
(186.7 |
) |
|
$ |
(356.2 |
) |
|
$ |
169.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares |
|
|
60.3 |
|
|
|
|
60.3 |
|
|
|
|
64.8 |
|
|
|
|
|
64.8 |
|
||||
Weighted average dilutive securities |
|
|
0.5 |
|
|
|
|
0.5 |
|
|
|
|
— |
|
|
|
0.3 |
|
|
|
0.3 |
|
||
Total shares |
|
|
60.8 |
|
|
|
|
60.8 |
|
|
|
|
64.8 |
|
|
|
|
|
65.1 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted net income (loss) per common share |
|
$ |
2.66 |
|
|
|
$ |
2.90 |
|
|
|
$ |
(2.88 |
) |
|
|
|
$ |
2.60 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
Nine Months Ended |
|||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|
GAAP |
|
|
|
Non-GAAP |
|
|
|
GAAP |
|
|
|
Non-GAAP |
|
||||||||
|
|
Results |
|
Adjustments (1) |
|
Results |
|
|
|
Results |
|
Adjustments (2) |
|
Results |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
$ |
391.8 |
|
$ |
(45.0 |
) |
|
$ |
436.8 |
|
|
|
$ |
61.7 |
|
$ |
(380.5 |
) |
|
$ |
442.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares |
|
|
61.7 |
|
|
|
|
61.7 |
|
|
|
|
66.5 |
|
|
|
|
66.5 |
|
||||
Weighted average dilutive securities |
|
|
0.6 |
|
|
|
|
0.6 |
|
|
|
|
0.5 |
|
|
|
|
0.5 |
|
||||
Total shares |
|
|
62.3 |
|
|
|
|
62.3 |
|
|
|
|
67.0 |
|
|
|
|
67.0 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per common share |
|
$ |
6.29 |
|
|
|
$ |
7.01 |
|
|
|
$ |
0.92 |
|
|
|
$ |
6.60 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Represents the impact on net income in the periods ended |
(2) |
Represents the impact on net (loss) income in the periods ended |
Consolidated Balance Sheets
(In millions)
|
|
|
|
||
ASSETS |
|
|
|
||
Current Assets: |
|
|
|
||
Cash and Cash Equivalents |
$ |
357.6 |
|
$ |
457.0 |
Receivables |
|
1,062.6 |
|
|
1,002.3 |
Inventories |
|
1,476.9 |
|
|
1,821.2 |
Other |
|
310.5 |
|
|
374.2 |
Assets Held For Sale (1) |
|
139.5 |
|
|
— |
Total Current Assets |
|
3,347.1 |
|
|
3,654.7 |
Property, Plant and Equipment |
|
848.0 |
|
|
844.6 |
Operating Lease Right-of-Use Assets |
|
1,234.6 |
|
|
1,177.1 |
|
|
5,362.6 |
|
|
5,358.4 |
Other Assets |
|
374.8 |
|
|
371.1 |
TOTAL ASSETS |
$ |
11,167.1 |
|
$ |
11,405.9 |
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||
Accounts Payable and Accrued Expenses |
$ |
1,842.8 |
|
$ |
2,240.8 |
Current Portion of Operating Lease Liabilities |
|
319.5 |
|
|
329.4 |
Short-Term Borrowings |
|
18.0 |
|
|
98.0 |
Current Portion of Long-Term Debt |
|
665.2 |
|
|
37.3 |
Other Liabilities |
|
610.4 |
|
|
702.4 |
Long-Term Portion of Operating Lease Liabilities |
|
1,085.6 |
|
|
1,066.1 |
Long-Term Debt |
|
1,571.3 |
|
|
2,109.1 |
Stockholders’ Equity |
|
5,054.3 |
|
|
4,822.8 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
11,167.1 |
|
$ |
11,405.9 |
Note: Year over year balances are impacted by changes in foreign currency exchange rates. |
(1) |
Assets held for sale include the assets of the Company's Heritage Brands intimate apparel business, primarily |
Segment Data
(In millions)
REVENUE BY SEGMENT |
|||||||||
|
|
Quarter Ended |
|
|
|
Quarter Ended |
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
$ |
326.9 |
|
|
|
$ |
307.2 |
|
Royalty revenue |
|
|
25.6 |
|
|
|
|
24.3 |
|
Advertising and other revenue |
|
|
6.7 |
|
|
|
|
6.7 |
|
Total |
|
|
359.2 |
|
|
|
|
338.2 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
|
831.1 |
|
|
|
|
805.9 |
|
Royalty revenue |
|
|
15.6 |
|
|
|
|
16.9 |
|
Advertising and other revenue |
|
|
4.0 |
|
|
|
|
5.9 |
|
Total |
|
|
850.7 |
|
|
|
|
828.7 |
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
|
||
Net sales |
|
|
1,158.0 |
|
|
|
|
1,113.1 |
|
Royalty revenue |
|
|
41.2 |
|
|
|
|
41.2 |
|
Advertising and other revenue |
|
|
10.7 |
|
|
|
|
12.6 |
|
Total |
|
|
1,209.9 |
|
|
|
|
1,166.9 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
|
310.0 |
|
|
|
|
314.7 |
|
Royalty revenue |
|
|
51.0 |
|
|
|
|
49.8 |
|
Advertising and other revenue |
|
|
14.5 |
|
|
|
|
15.8 |
|
Total |
|
|
375.5 |
|
|
|
|
380.3 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
|
627.4 |
|
|
|
|
570.0 |
|
Royalty revenue |
|
|
15.5 |
|
|
|
|
14.1 |
|
Advertising and other revenue |
|
|
3.8 |
|
|
|
|
2.1 |
|
Total |
|
|
646.7 |
|
|
|
|
586.2 |
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
|
||
Net sales |
|
|
937.4 |
|
|
|
|
884.7 |
|
Royalty revenue |
|
|
66.5 |
|
|
|
|
63.9 |
|
Advertising and other revenue |
|
|
18.3 |
|
|
|
|
17.9 |
|
Total |
|
|
1,022.2 |
|
|
|
|
966.5 |
|
|
|
|
|
|
|
|
|
||
Heritage Brands Wholesale |
|
|
|
|
|
|
|
||
Net sales |
|
|
130.4 |
|
|
|
|
146.9 |
|
Royalty revenue |
|
|
0.3 |
|
|
|
|
0.3 |
|
Advertising and other revenue |
|
|
0.1 |
|
|
|
|
0.2 |
|
Total |
|
|
130.8 |
|
|
|
|
147.4 |
|
|
|
|
|
|
|
|
|
||
Total Revenue |
|
|
|
|
|
|
|
||
Net sales |
|
|
2,225.8 |
|
|
|
|
2,144.7 |
|
Royalty revenue |
|
|
108.0 |
|
|
|
|
105.4 |
|
Advertising and other revenue |
|
|
29.1 |
|
|
|
|
30.7 |
|
Total |
|
$ |
2,362.9 |
|
|
|
$ |
2,280.8 |
|
|
|
|
|
|
|
|
|
Segment Data (continued)
(In millions)
EARNINGS (LOSS) BEFORE INTEREST AND TAXES BY SEGMENT |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Quarter Ended |
|
|
|
Quarter Ended |
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Results |
|
|
|
|
|
|
|
Results |
|
|
|
|
|
||||||||||||
|
|
Under |
|
|
|
Non-GAAP |
|
|
|
Under |
|
|
|
Non-GAAP |
|
||||||||||||
|
|
GAAP |
|
Adjustments (1) |
|
Results |
|
|
|
GAAP |
|
Adjustments (2) |
|
Results |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
$ |
39.5 |
|
|
$ |
(5.4 |
) |
|
$ |
44.9 |
|
|
|
|
$ |
(169.9 |
) |
|
$ |
(181.4 |
) |
|
$ |
11.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
90.8 |
|
|
|
(3.6 |
) |
|
|
94.4 |
|
|
|
|
|
121.7 |
|
|
|
(2.1 |
) |
|
|
123.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total |
|
|
130.3 |
|
|
|
(9.0 |
) |
|
|
139.3 |
|
|
|
|
|
(48.2 |
) |
|
|
(183.5 |
) |
|
|
135.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
48.8 |
|
|
|
(2.6 |
) |
|
|
51.4 |
|
|
|
|
|
(140.0 |
) |
|
|
(166.6 |
) |
|
|
26.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
94.9 |
|
|
|
(1.7 |
) |
|
|
96.6 |
|
|
|
|
|
12.1 |
|
|
|
(80.0 |
) |
|
|
92.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total |
|
|
143.7 |
|
|
|
(4.3 |
) |
|
|
148.0 |
|
|
|
|
|
(127.9 |
) |
|
|
(246.6 |
) |
|
|
118.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Heritage Brands Wholesale |
|
|
3.9 |
|
|
|
(3.2 |
) |
|
|
7.1 |
|
|
|
|
|
7.3 |
|
|
|
(2.2 |
) |
|
|
9.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate |
|
|
(48.1 |
) |
|
|
(2.3 |
) |
|
|
(45.8 |
) |
|
|
|
|
(45.2 |
) |
|
|
(1.5 |
) |
|
|
(43.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total earnings (loss) before interest and taxes |
|
$ |
229.8 |
|
|
$ |
(18.8 |
) |
|
$ |
248.6 |
|
|
|
|
$ |
(214.0 |
) |
|
$ |
(433.8 |
) |
|
$ |
219.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The adjustments for the quarter ended |
(2) |
The adjustments for the quarter ended |
Segment Data (continued)
(In millions)
REVENUE BY SEGMENT |
|||||||||
|
|
Nine Months Ended |
|
|
|
Nine Months Ended |
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
$ |
891.2 |
|
|
|
$ |
830.9 |
|
Royalty revenue |
|
|
64.4 |
|
|
|
|
62.2 |
|
Advertising and other revenue |
|
|
15.5 |
|
|
|
|
16.1 |
|
Total |
|
|
971.1 |
|
|
|
|
909.2 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
|
2,444.1 |
|
|
|
|
2,345.7 |
|
Royalty revenue |
|
|
45.2 |
|
|
|
|
46.3 |
|
Advertising and other revenue |
|
|
13.0 |
|
|
|
|
15.1 |
|
Total |
|
|
2,502.3 |
|
|
|
|
2,407.1 |
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
|
||
Net sales |
|
|
3,335.3 |
|
|
|
|
3,176.6 |
|
Royalty revenue |
|
|
109.6 |
|
|
|
|
108.5 |
|
Advertising and other revenue |
|
|
28.5 |
|
|
|
|
31.2 |
|
Total |
|
|
3,473.4 |
|
|
|
|
3,316.3 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
|
807.6 |
|
|
|
|
872.6 |
|
Royalty revenue |
|
|
121.1 |
|
|
|
|
126.2 |
|
Advertising and other revenue |
|
|
35.9 |
|
|
|
|
41.3 |
|
Total |
|
|
964.6 |
|
|
|
|
1,040.1 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Net sales |
|
|
1,836.0 |
|
|
|
|
1,677.8 |
|
Royalty revenue |
|
|
41.3 |
|
|
|
|
38.3 |
|
Advertising and other revenue |
|
|
8.2 |
|
|
|
|
6.5 |
|
Total |
|
|
1,885.5 |
|
|
|
|
1,722.6 |
|
|
|
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
|
||
Net sales |
|
|
2,643.6 |
|
|
|
|
2,550.4 |
|
Royalty revenue |
|
|
162.4 |
|
|
|
|
164.5 |
|
Advertising and other revenue |
|
|
44.1 |
|
|
|
|
47.8 |
|
Total |
|
|
2,850.1 |
|
|
|
|
2,762.7 |
|
|
|
|
|
|
|
|
|
||
Heritage Brands Wholesale |
|
|
|
|
|
|
|
||
Net sales |
|
|
403.2 |
|
|
|
|
455.4 |
|
Royalty revenue |
|
|
0.8 |
|
|
|
|
0.7 |
|
Advertising and other revenue |
|
|
0.3 |
|
|
|
|
0.4 |
|
Total |
|
|
404.3 |
|
|
|
|
456.5 |
|
|
|
|
|
|
|
|
|
||
Total Revenue |
|
|
|
|
|
|
|
||
Net sales |
|
|
6,382.1 |
|
|
|
|
6,182.4 |
|
Royalty revenue |
|
|
272.8 |
|
|
|
|
273.7 |
|
Advertising and other revenue |
|
|
72.9 |
|
|
|
|
79.4 |
|
Total |
|
$ |
6,727.8 |
|
|
|
$ |
6,535.5 |
|
|
|
|
|
|
|
|
|
Segment Data (continued)
(In millions)
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Nine Months Ended |
|
|
|
Nine Months Ended |
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Results |
|
|
|
|
|
|
|
Results |
|
|
|
|
|
||||||||||||
|
|
Under |
|
|
|
Non-GAAP |
|
|
|
Under |
|
|
|
Non-GAAP |
|
||||||||||||
|
|
GAAP |
|
Adjustments (1) |
|
Results |
|
|
|
GAAP |
|
Adjustments (2) |
|
Results |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
$ |
55.0 |
|
|
$ |
(11.8 |
) |
|
$ |
66.8 |
|
|
|
|
$ |
(184.8 |
) |
|
$ |
(181.4 |
) |
|
$ |
(3.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
290.5 |
|
|
|
(15.9 |
) |
|
|
306.4 |
|
|
|
|
|
349.6 |
|
|
|
(38.8 |
) |
|
|
388.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total |
|
|
345.5 |
|
|
|
(27.7 |
) |
|
|
373.2 |
|
|
|
|
|
164.8 |
|
|
|
(220.2 |
) |
|
|
385.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
71.4 |
|
|
|
(8.5 |
) |
|
|
79.9 |
|
|
|
|
|
(106.4 |
) |
|
|
(166.6 |
) |
|
|
60.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
275.5 |
|
|
|
(10.2 |
) |
|
|
285.7 |
|
|
|
|
|
187.6 |
|
|
|
(93.8 |
) |
|
|
281.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total |
|
|
346.9 |
|
|
|
(18.7 |
) |
|
|
365.6 |
|
|
|
|
|
81.2 |
|
|
|
(260.4 |
) |
|
|
341.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Heritage Brands Wholesale |
|
|
21.5 |
|
|
|
(7.8 |
) |
|
|
29.3 |
|
|
|
|
|
37.5 |
|
|
|
(2.2 |
) |
|
|
39.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate |
|
|
(142.0 |
) |
|
|
(3.6 |
) |
|
|
(138.4 |
) |
|
|
|
|
(110.2 |
) |
|
|
14.6 |
|
|
|
(124.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total earnings before interest and taxes |
|
$ |
571.9 |
|
|
$ |
(57.8 |
) |
|
$ |
629.7 |
|
|
|
|
$ |
173.3 |
|
|
$ |
(468.2 |
) |
|
$ |
641.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The adjustments for the nine months ended |
(2) |
The adjustments for the nine months ended |
Reconciliations of Constant Currency Revenue
(In millions)
As a supplement to the Company’s reported operating results, the Company presents constant currency revenue information, which is a non-GAAP financial measure. The Company presents results in this manner because it is a global company that transacts business in multiple currencies and reports financial information in
The Company calculates constant currency revenue information by translating its foreign revenues for the relevant period into
Constant currency performance should be viewed in addition to, and not in lieu of or as superior to, the Company’s operating performance calculated in accordance with GAAP. The constant currency revenue information presented may not be comparable to similarly described measures reported by other companies.
|
|
|
|||||||||||||
|
|
GAAP Revenue |
|
% Change |
|||||||||||
|
|
Quarter Ended |
|
GAAP |
|
Positive Impact of Foreign Exchange |
|
Constant Currency |
|||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
$ |
850.7 |
|
$ |
828.7 |
|
2.7 |
% |
|
5.3 |
% |
|
(2.6 |
)% |
Total |
|
|
1,209.9 |
|
|
1,166.9 |
|
3.7 |
% |
|
3.6 |
% |
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
646.7 |
|
|
586.2 |
|
10.3 |
% |
|
4.2 |
% |
|
6.1 |
% |
Total |
|
|
1,022.2 |
|
|
966.5 |
|
5.8 |
% |
|
2.5 |
% |
|
3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Revenue |
|
$ |
2,362.9 |
|
$ |
2,280.8 |
|
3.6 |
% |
|
2.9 |
% |
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Direct-to-Consumer |
|
$ |
924.2 |
|
$ |
857.6 |
|
7.8 |
% |
|
2.2 |
% |
|
5.6 |
% |
Wholesale |
|
$ |
1,301.6 |
|
$ |
1,287.1 |
|
1.1 |
% |
|
3.7 |
% |
|
(2.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Digital |
|
$ |
487.6 |
|
$ |
432.7 |
|
12.7 |
% |
|
5.2 |
% |
|
7.5 |
% |
Full Year and Quarterly Reconciliations of GAAP to Non-GAAP Amounts
The Company is presenting its 2023 estimated results on a non-GAAP basis by excluding (i) the restructuring costs incurred and expected to be incurred related to the 2022 cost savings initiative, consisting principally of severance, (ii) the estimated pre-tax net gain to be recorded in connection with the sale of the Company’s Heritage Brands intimate apparel business that closed on
The 2023 estimated results are presented on both a GAAP and non-GAAP basis. The Company believes presenting these results on a non-GAAP basis provides useful additional information to investors. The Company excludes such amounts that it deems to be non-recurring or non-operational and believes that excluding them (i) facilitates comparing the results being reported against past and future results by eliminating amounts that it believes are not comparable between periods, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company, and (ii) assists investors in evaluating the effectiveness of the Company’s operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance. The Company uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s Board of Directors and others. The Company’s results excluding the items described above are also the basis for certain incentive compensation calculations. The non-GAAP measures should be viewed in addition to, and not in lieu of or superior to, the Company’s operating performance measures calculated in accordance with GAAP. The information presented on a non-GAAP basis may not be comparable to similarly titled measures reported by other companies.
The estimated tax effects associated with the above pre-tax items are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each pre-tax item identified above as a non-GAAP exclusion to determine if such item is taxable or tax deductible, and, if so, in what jurisdiction the tax expense or tax deduction would occur. All of the pretax items identified as non-GAAP exclusions were identified as either primarily taxable or tax deductible, with the tax effect taken at the applicable income tax rate in the local jurisdiction, or as non-taxable or non-deductible, in which case the Company assumed no tax effect.
2023 Net Income Per Common Share Reconciliations |
|||||||
|
|
|
|
|
|
||
|
Current Guidance |
|
Previous Guidance |
||||
Full Year 2023 (Estimated) |
|
Fourth Quarter 2023 (Estimated) |
|
Full Year 2023 (Estimated) |
|
Third Quarter 2023 (Estimated) |
|
|
|
|
|
|
|
|
|
GAAP net income per common share |
Approximately |
|
Approximately |
|
Approximately |
|
Approximately |
Estimated per common share impact of items identified as non-GAAP exclusions |
|
|
|
|
|
|
|
Net income per common share on a Non-GAAP basis |
Approximately |
|
Approximately |
|
Approximately |
|
Approximately |
The GAAP net income per common share amounts presented in the above table, as well as the amounts excluded in providing non-GAAP earnings guidance, would be expected to change as a result of (i) acquisition, restructuring, divestment or similar transactions or activities, (ii) the timing and strategy of restructuring and integration initiatives or other one-time events, such as the 2022 cost savings initiative, that the Company engages in or suffers during the period, (iii) any market or other changes affecting the Company’s expected actuarial gain or loss on retirement plans, including the recent volatility in the financial markets, (iv) changes in the expected impacts of inflationary pressures, as well as unexpected additional impacts of the war in
Full Year and Quarterly Reconciliations of GAAP to Non-GAAP Amounts (continued)
Reconciliations of GAAP Diluted Net Income Per Common Share to Diluted Net Income Per Common Share on a Non-GAAP Basis |
||||||||||||||||||||
|
|
Full Year 2022 |
|
Fourth Quarter 2022 |
||||||||||||||||
|
|
(Actual) |
|
(Actual) |
||||||||||||||||
(In millions, except per share data) |
|
Results Under GAAP |
|
Adjustments (1) |
|
Non-GAAP Results |
|
Results Under GAAP |
|
Adjustments (2) |
|
Non-GAAP Results |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
$ |
200.4 |
|
$ |
(393.2 |
) |
|
$ |
593.6 |
|
$ |
138.7 |
|
$ |
(12.7 |
) |
|
$ |
151.4 |
Total weighted average shares |
|
|
66.2 |
|
|
|
|
66.2 |
|
|
63.7 |
|
|
|
|
63.7 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per common share |
|
$ |
3.03 |
|
|
|
$ |
8.97 |
|
$ |
2.18 |
|
|
|
$ |
2.38 |
(1) |
Represents the impact on net income in the year ended |
(2) |
Represents the impact on net income in the quarter ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231129831304/en/
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