Tommy Hilfiger Announces Record Results for the Financial Year Ended 31 March 2008



    AMSTERDAM, Netherlands, June 23 /CNW/ -

    
    Financial Highlights(1)

    -   Total Group net sales increased 14.4% to EUR1,340 million

    -   Global retail value of net sales of EUR 3 billion

    -   European sales up 22.8% to EUR707 million with an increase in EBITDA
        margin to 26.0% (FY07: 25.4%)

    -   North American sales of $836 million up 2.5% with EBITDA margin at
        14.2% (FY07: 13.4%)

    -   EBITDA grew 23.9% to EUR268 million

    -   EBITDA margin increase of 160 basis points to 20.0% of sales

    Operational Highlights

    -   140 new freestanding store openings, taking the global store
        portfolio to 796

    -   Entered into a strategic alliance with Macy's, one of the United
        States' premier department stores, due to commence in Fall 2008

    -   Acquired former licensees Tommy Hilfiger Japan and Tommy Hilfiger
        Europe Footwear

    -   Signed lease for global flagship store on Fifth Avenue in New York
        City
    

    Commenting on the results Fred Gehring, Chief Executive Officer, said:

    "We are extremely proud of these record financials. For many years now
our international business outside of the US has delivered consistent growth
at a premium position. We are especially pleased as well that the initiatives
we have undertaken in the past two years to elevate and reposition the brand
in the US have delivered such strong results. Not only does our global forward
order book show a double digit increase for the fall of '08, our US business
at our retail stores and at Macy's has performed exceptionally well throughout
the year and in the currently challenging economic environment. We believe
that the Group is now perfectly aligned globally and is strongly positioned
for continued global expansion."

    Notes to Editors

    Tommy Hilfiger is one of the world's most recognized premium lifestyle
brands and one of the largest designer apparel brands globally. For over
twenty years, Tommy Hilfiger has offered consumers around the world a range of
high quality product lines including men's, women's and children's casual
apparel, sportswear, denim, and a range of licensed products such as
accessories, fragrances and home furnishings. Tommy Hilfiger has been built
upon a powerful design philosophy - Classic American Cool - which brings a
fresh perspective to traditional, all-American styling by giving time-honored
classics an updated look for today. Distributed in over 65 countries, the
Company's products can be found in its network of nearly 800 dedicated retail
stores, as well as in leading specialty and department stores around the
world. The brand is supported by approximately 8,000 employees from around the
world who share the Tommy Hilfiger values: those of quality, respect,
entrepreneurship, optimism and the spirit of youth.

    Operational Review

    Europe

    Throughout Europe, both our wholesale and retail businesses continued to
show strong double-digit growth with further improved gross margins.
    In Europe, wholesale revenue increased by 22.4% due to a strong
performance from all divisions and countries and the September 2007
acquisition of the Group's former footwear licensee, Tommy Hilfiger Footwear,
which accounted for 8.2% points of the growth.
    Retail revenue increased by 26.4%, mainly due to new and refurbished
stores. The like-for-like growth was 3.8%.
    Gross margins in both channels were stronger by 120 basis points compared
to the year ended 31 March 2007, largely caused by higher price points and
improved sourcing.

    U.S.

    In the U.S., our initiatives to reposition the brand by trading up have
paid off substantially. After a number of years of decline, the U.S. business
has started to contribute to the overall growth of the group (4.9% for FY08
versus FY07 for retail and wholesale combined).
    Retail net revenue for the U.S segment was driven by comp growth of 6.7%
for the year, and an improved gross margin of 260 basis points. In addition
the group opened 13 new stores. The specialty stores showed significantly
higher sales and gross margins compared to FY07.
    Total U.S. wholesale net revenue decreased 11.4% following planned
declines in discontinued product lines, wholesale customer orders and doors
and reduced clearance sales. This was partially offset by increases in sales
at better margins to Macy's, where business has performed very well with
double digit comp sales year on year. Accordingly, the wholesale gross margin
improved by 480 basis points. Licensing net revenue decreased as
underperforming licensees were discontinued during the period.

    Canada

    In Canada, total revenue decreased by 2.1%, which was a mix of solid
growth in retail and a decline in wholesale due to a planned reduction of
doors. This resulted in an overall increase in gross margin of 250 basis
points.

    Rest of World/Other

    In the Rest of the World all businesses have shown double digit growth,
with particularly strong performances in Japan, Korea and Latin and South
America, which increased the licensing revenue.

    Store Portfolio

    There are nearly 800 Tommy Hilfiger stores around the world, of which
approximately 50% are operated by the Company with the balance operated by
franchisees, distributors or licensees. During the fiscal year ended March 31,
2008, 140 new stores were opened, 42 of which are Company owned.

    Current Trading and Outlook

    The European forward order book for wholesale continues to show a double
digit increase for Fall 2008 whereas retail comparable results on a pan
European basis are up mid single digit on a comparative basis versus the
previous year for the Spring '08 season to date. Most notably we have seen the
brand perform very well in the U.S. in a difficult economic environment. For
the Spring '08 season, comparable sales were up by high single digits for our
retail business (period February 1, 2008 through May 31, 2008) whereas our
business at Macy's has experienced double digit growth on a comparable basis
for the same period.

    
    FINANCIAL REVIEW (on a comparable basis)

    EUR'000         FY08     FY07         % change at
                                          comparable
                    actual   comparable   rates

    Sales           1,340    1,172          14.4%
    Gross margin      797      664          20.1%

                    (59.5%)  (56.7%)
    EBITDA            268      216          23.9%


    BY REGION

    FY08 EUR'000   Europe    US     Canada  RoW/Other  Total

    Sales           707      454     136      43       1,340
    Cost of sales  (268)    (208)    (61)     (6)       (543)
    Gross margin    439      246      75      37         797
    SG&A           (256)    (181)    (56)    (37)       (530)
    EBITDA          184       65      19       -         268


    FY07 EUR'000   Europe    US     Canada  RoW/Other  Total

    Sales           575      437     139       21      1,172
    Cost of sales  (224)    (217)    (66)      (1)      (508)
    Gross margin    351      220      73       20        664
    SG&A           (206)    (162)    (53)     (27)      (448)
    EBITDA          146       57      20       (7)       216
    

    Note on the Accounts

    The figures included in this report are prepared under the Company's
accounting standards, which are based on IFRS. The FY08 figures are derived
from our consolidated financial statements for the year ended 31 March 2008.
The FY07 comparative figures were derived from pro-forma combined financial
information for the year ended 31 March 2007. Totals may deviate from the sum
of the individual inputs due to rounding.

    Warning about Forward-Looking Statements

    Some statements in this document are forward-looking statements. These
forward-looking statements are based on current expectations, estimates,
forecasts and projections and our beliefs and assumptions about future events.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will occur in
the future. These forward-looking statements involve known and unknown risks,
uncertainties and other factors that are outside of our control and impossible
to predict and may cause actual results to differ materially from any future
results expressed or implied.

    About the Tommy Hilfiger Group

    With a premium lifestyle brand portfolio that includes Tommy Hilfiger,
Hilfiger Denim and Karl Lagerfeld, The Tommy Hilfiger Group of Companies is
one of the world's most recognized designer apparel groups globally. The
Group's focus is designing and marketing high-quality menswear, womenswear,
children's apparel and denim collections. Through select licensees, the Group
offers complementary lifestyle products such as accessories, fragrances and
home furnishings. Tommy Hilfiger Group merchandise is available to consumers
worldwide through an extensive network of dedicated retail stores, leading
specialty and department stores and other carefully controlled distribution
channels. For additional information about the Tommy Hilfiger Group of
Companies, please visit http://www.tommy.com

    
    ---------------------------------

    (1) On a comparable basis, which is based on an ongoing scope, constant
        exchange rate and excluding exceptional items. FY07 has been
        presented on a pro-forma 12 month basis.
    





For further information:

For further information: Avery Baker, EVP of Global Communications,
Tommy Hilfiger, Tel: +31-20-589-9889, Avery.Baker@tommy.com; James Olley,
Director, Brunswick Group LLP, Tel: +44-20-7404-5959,
jolley@brunswickgroup.com

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