Tommy Hilfiger Cites Sales Drop

Tommy Hilfiger Corp. said Wednesday that fiscal 2005 preliminary pretax income dropped 45.9 percent on a revenue decrease of 4.9 percent. The company revised its fiscal 2006 earnings and sales outlooks, citing in part a decline in orders from U.S. department stores.

In the 12 months ended March 31, the company said net income totaled $92 million before taxes, which compared with $170 million last year. Results in the latest year included expenses totaling $36 million related to legal fees, the exit of two businesses, a restructuring of the company's wholesale business and the closing of a store.

Income from operations fell 42.4 percent to $114 million in the year from $198 million. Revenues fell to $1.8 billion from $1.9 billion a year ago. The company said it has delayed filing its fourth-quarter and full-year financial statements with the Securities and Exchange Commission because of government investigations of its commission policies, which has spawned 11 shareholder class-action lawsuits. The company reports are expected to filed on or before Aug. 10.

The company did disclose that fourth-quarter net revenues were $492 million, down 3.5 percent from $510 million a year ago. In fiscal 2006, Tommy Hilfiger expects net revenues to decrease in the mid-single digits, while pretax income is seen increasing by 30 to 35 percent.

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