Tommy Reports

Tommy Hilfiger Corp. (Kowloon, Hong Kong) reported a 2.4 percent increase in net revenues for the fourth quarter of fiscal 2004.

Tommy Hilfiger Europe continued to achieve strong performance, generating a revenue increase of 39.5 percent. Comparable net revenue in the U.S. declined 12.3 percent in the quarter.

The company noted four special charges, amounting to $14.6 million before taxes, during the quarter: the closure of four specialty retail stores; the repositioning of the U.S. young men’s jeans business; the acceleration of depreciation of certain in-store shops within U.S. department stores as part of the company’s strategy to reduce overdistribution; and “other cost-reduction initiatives.”

In the company’s retail segment, revenue increased 16.7 percent. Revenue increases from stores opened or expanded, primarily in Europe and Canada, since April 1, 2003, were partially offset by a low single-digit decrease in same-store sales at U.S. outlet stores, the company’s largest retail division. As of March 31, 2004, the company’s worldwide store count was 167, including 132 outlet stores and 35 specialty stores, compared to 166 stores a year earlier, which was comprised of 115 outlets and 51 specialty stores.

For the full fiscal year ended March 31, 2004, net revenue decreased 0.7 percent (though they increased 49.6 percent in Europe). Comparable net revenue in the U.S. declined 11.6 percent.

Based on the completion of its holiday markets in its wholesale businesses, the Young Men’s Jeans repositioning, and greater overall visibility regarding retailer orders for the balance of the year, the company now expects consolidated revenue for fiscal 2005 to be below that of fiscal 2004 in the high single digit percentage range, which is a larger decline than its previous expectations for a mid-single digit decline. Revenue in the company’s retail segment is expected to grow in the mid-teen percentage range in fiscal 2005, mainly due to revenue from new store openings in Europe, Canada and the U.S. The company anticipates opening approximately 25 outlet stores and approximately six specialty stores worldwide in fiscal 2005.

“Our performance for the quarter exceeded earlier expectations due to stronger-than-anticipated European operating results and favorable currency translations,” said president and ceo David Dyer. “Our focus during the quarter remained on implementing the necessary steps to improve the productivity of our business and position the company for a return to long-term growth. Toward that end, we have taken actions to enhance and extend our product offerings. These initiatives are a critical component in recapturing our fashion leadership and revitalizing our brand.”