November 05, 2019 / By mobanmarket
Last Wednesday the Hong Kong-based Tommy Hilfiger Corp reported a 58.6% plummet in third quarter income before taxes.
The company also cut its pre-tax income forecast for the fiscal year 2005. Furthermore, it said that it would discontinue distribution of its H Hilfiger collections to US department stores in an effort to concentrate on a new specialty store concept currently in development.
The struggling company is also momentarily facing a federal tax probe. It included the $6.6 million (GBP 3.68 million) for legal and advisory fees relating to this investigation in its third quarter pre-tax income of $12.6 million. During the same period last year this amount was $30.4 million. Net revenue was down by 5% to $427.9 million.
Last month the company announced that it was to cut jobs in its US wholesale division and close its young men’s jeans division, costing 200 jobs as a result. David Fyer, president and chief executive officer, said in a statement: “Our results continue to reflect a challenging US department store environment, as well as higher-than-expected promotional activity during the fall and holiday seasons.” He continued: “We are pleased with the performance of our US company stores where comparable store sales trends turned positive for the quarter, along with the strong results in Europe, Canada and licensing businesses.”
Wholesale revenues slumped by 19% to $242.7 million from $299.7 million the same period the year before. The company’s European wholesale division grew by 33.2 % to $61 million from $45.8 million a year ago. Meanwhile the US wholesale business dropped by 30.8% from $238.8 million to $165.3 million.
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The retail division fared better with a 21.8% increase in third quarter revenue to $165.6 million.
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