UPDATE 1-Phillips-Van Heusen cuts Q4 outlook; slashes jobs
Jan 21 (Reuters) - Phillips-Van Heusen Corp (PVH.N: Quotazione) cut its fourth-quarter forecast and slashed about 250 jobs, or about 10 percent of its salaried workforce, as part of its cost-cutting efforts amid challenging economic conditions, sending its shares down as much as 6 percent.
The company, which also eliminated about 150 hourly neckwear manufacturing positions, said it will take a related charge of about $55 million, or $1.05 a share, of which about $50 million will be incurred in the fourth quarter of 2008.
The company, which sells clothes and accessories for men, women, and children under brands such as Van Heusen, Bass and Calvin Klein, also plans to downsize its retail operations, resulting in impairment charges for about 175 stores.
As part of its restructuring efforts, the company stopped domestic production of machine-made neckwear and reduced its warehousing capacity. It expects annualized pre-tax savings of about $40 million from the actions.
Phillips-Van Heusen said it expects fourth-quarter earnings of about 25 cents a share to 30 cents a share, excluding items, on revenue of about $585 million to $590 million.
The company had previously forecast earnings of about 35 cents a share to 45 cents a share, before certain items, on revenue of $595 million to $615 million.
The company, which distributes its products to stores including those of Macy's (M.N: Quotazione), JCPenney (JCP.N: Quotazione), Wal-Mart (WMT.N: Quotazione), cited a difficult Christmas and post-Christmas retail environment for the outlook cut.
The retailer, which expects Calvin Klein royalty revenue for the fourth quarter to be relatively flat, also lowered the higher end of its comparable-store sales forecast for the quarter.
It now expects same-store sales to be down between 8 percent and 10 percent, compared with its prior outlook of a fall of 8 percent to 13 percent.
Phillips-Van Heusen, which has no debt maturities until 2011, said it expects to end the year with a strong balance sheet, with an estimated $320 million to $325 million in cash.
The company's shares were down $1.06 at $17.75 in trading after the bell. They had closed at $18.81 Wednesday on the New York Stock Exchange. (Reporting by Dhanya Skariachan in Bangalore; Editing by Pratish Narayanan)
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