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PVH profits drop marginally as sales double

Calvin Klein owner Phillips-Van Heusen posted a 3.5% drop in net income to $80.7m (£51.5m) for the third quarter of the year, helped by a strong performance from premium brand Tommy Hilfiger.

Phillips-Van Heusen (PVH) sales for the three months to October 31 doubled to $1.52bn (£970m) from $697.4m (£445m) compared to the same period the year before.

Calvin Klein sales increased 16% to $272.6m (£174m). Profit before interest and tax rose 49% to $56.8m (£36.2m) during the period.

The Tommy Hilfiger business, which PVH bought from UK private equity group Apax in May, achieved sales of $708.4m (£452m), which the company said was $48.4m (£30.8m) higher than the top end of the company’s previous guidance, due to stronger sales than anticipated in Europe and North America.

Emanuel Chirico, chairman and chief executive, said: “We are extremely pleased with our strong performance in the third quarter, which enabled us to again exceed our guidance. Both the Tommy Hilfiger and Calvin Klein international businesses performed particularly well. Additionally, our positive cash flow position will allow us to quickly deliver our balance sheet, and we continue to plan a $300 million (£191.3m) debt repayment in the fourth quarter of 2010, which is in addition to the $100 million (£63.8m) repayment that we made in the second quarter.”

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