Fourth-quarter numbers show a $0.29 per-share profit, with $1.45 for the full year. That compares favorably to last year's loss of $1.26 and $5.68, respectively. But remember, the prior year was a bit of a big bath, featuring supersized writedowns of goodwill and accounting changes.
It doesn't look like investors were fooled by the rosy-looking IR speak at the top of the page. The touted increase in "earnings before special charges" is nothing to be too proud of, especially when the firm's lagging sales indicate that it may take more of these restructuring expenditures to put the company back on track.
It all comes down to revenues. In the U.S., Tommy's biggest market, sales dropped around 12% for both the fourth quarter and the full year, continuing a well-established trend. Gains in Europe, juiced by the surging euro, were not enough to compensate, leaving full-year sales down almost 1%. Worse yet, management warned that next year's sales would fall below this year's by somewhere between 5% and 10%. Earnings will drop somewhere around 10%, management predicts.
It just looks like consumers aren't buying what Tommy is shoveling. Even licensing partners like Stride Rite
I suspect that Hilfiger's silly advertising campaign -- featuring geriatric glamsters David Bowie and Iman -- is doing little to bring Tommy toward the front lines of hip. But whatever the reason for the failure, investors would do well to stay away until Tommy changes its tune.
Retail's complex, but the Fool can help you sort it out:
- Review Tommy's recent results.
- See what Fool cofounder Tom Gardner thinks of Abercrombie.
- Let Tom and David do the work for you with Motley Fool Stock Advisor.