NEW YORK (AP) -- PVH Corp. says its Warnaco acquisition will require more investments than it initially anticipated and weigh on its earnings for the year.
The clothing company also declared that 2013 will be a transitional year as it invests in its brands, and its shares sank in after-hours trading Wednesday.
PVH, previously known as Phillips-Van Heusen Corp., sells brands like Calvin Klein and Tommy Hilfiger. It bought rival The Warnaco Group in a deal worth $2.9 billion that closed Feb. 13 and cemented its control of the Calvin Klein clothing brand.
The company said late Wednesday that the investments needed in Warnaco are higher than it initially anticipated so it can rebuild its Calvin Klein denim and underwear business.
PVH plans to invest in its supply chain, product design, marketing and staff to help improve its business, along with lowering excess inventory levels and reducing sales of its brand in off-price sites. Given these additional investments, the company expects the Warnaco deal will prove reduce its 2013 earnings by 25 cents per share.
Company CEO and Chairman Emanuel Chirico said that he sees 2013 as a year of investment and transition for the Warnaco business and PVH.
"We will build the foundation for long-term sustainable growth for our businesses across the world," Chirico said in a statement. "I believe we will emerge stronger and the investments we will make this year will help drive the Calvin Klein business going forward."
PVH made the announcement as it reported that its fourth-quarter net income more than doubled and the quarter handily beat market expectations.
The company earned $80.7 million, or $1.09 per share, for the quarter that ended Feb. 3. That is compared with $35.5 million, or 48 cents per share, for the fourth quarter of the prior year. On an adjusted basis, PVH earned $1.60 per share versus $1.19 per share.
Its revenue increased to $1.64 billion from $1.53 billion.
Analysts polled by FactSet were expecting the company to earn $1.50 per share on revenue of $1.6 billion.
Chirico said the strength of the company's brands helped it navigate tough global economic conditions during the year, as well as the pressure from higher costs and volatility swings in foreign currency.
For the full year, the New York company earned $433.8 million, or $5.87 per share, on revenue of $6.04 billion. Adjusted earnings per share rose to $6.58 from $5.44 a year earlier.
The company said it expects now adjusted earnings of $7.00 per share on revenue of $8.2 billion for its 2013 fiscal year. Analysts had forecast earnings of $7.44 per share for the year on revenue of $7.9 billion.
PVH said that its earnings before interest and taxes on an adjusted basis from the acquired Warnaco businesses will be 20 percent lower than its original plan, due to the added investments. It also said that the saving it expected from combining the companies will come in at $25 million for the year, half its initial expectation of approximately $50 million.
Additionally, the company's Calvin Klein licensing business is contending with about $20 million of reduced revenue for the year due to the end of a long-term contract.
PVH also said it expects its first-quarter earnings per share will be relatively flat with last year's $1.33 on an adjusted basis with revenue of $1.9 billion. Analysts were anticipating earnings per share of $1.52 and revenue of $1.99 billion for the period.
Shares sank more than 4 percent, or $5.07, to $107.72 in after-hours trading on the news. Its stock value had increased more than 20 percent since it announced the Warnaco acquisition in late October.
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