EXHIBIT 99.1

PHILLIPS-VAN HEUSEN CORPORATION

200 MADISON AVENUE

NEW YORK, N.Y. 10016

 

FOR IMMEDIATE RELEASE:

MARCH 8, 2004

 

Contact:  	Emanuel Chirico

			Executive Vice President & Chief Financial Officer

			(212) 381-3503

			www.pvh.com

PHILLIPS-VAN HEUSEN CORPORATION REPORTS 2003

FOURTH QUARTER AND FULL YEAR EARNINGS

- EPS IN LINE WITH GUIDANCE AND AHEAD OF CONSENSUS ESTIMATE
- BASS WHOLESALE FOOTWEAR BUSINESS EXITED AND LICENSED TO BROWN SHOE
- CALVIN KLEIN INTEGRATION COMPLETE

Phillips-Van Heusen Corporation reported a fourth quarter 2003 net loss of $9.2 million which,after deducting preferred stock dividends, resulted in a net loss of $0.47 per diluted common share.  Excluding restructuring, transition andother items, net income in the fourth quarter improved to $9.6 million, or $0.14 per diluted common share, which is in line with the Company'sprevious earnings guidance.  In the prior year's fourth quarter, net income was $5.7 million, or $0.20 per diluted common share.  

For the full year, net income was $14.7 million which, after deducting preferred stock dividends, resulted in a net loss of$0.18 per diluted common share.  Excluding restructuring, transition and other items, net income for the year was $50.5 million, or $0.98 perdiluted common share.  This compares with net income of $30.4 million, or $1.08 per diluted common share, in the prior year.

Restructuring, transition and other items include (i) Calvin Klein integration costs, which consist of (a) the operatinglosses of certain Calvin Klein businesses which the Company has closed or licensed, and associated costs in connection therewith; and (b) thecosts of certain duplicative personnel and facilities incurred during the integration of 

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various logistical and back office functions; (ii) the gain resulting from the Company's sale of its minority interest inGant Company AB in the second quarter; (iii) the costs of licensing the Bass brand for wholesale distribution to Brown Shoe Company and exitingthe wholesale footwear business; and (iv) the costs associated with the impairment and closing of approximately 200 retail outlet stores.(Please see Consolidated Income Statements below for a reconciliation of GAAP amounts to non-GAAP financial measures.)  

The improvement in fourth quarter net income, excluding restructuring, transition and other items, was primarily due to$11.4 million of operating earnings associated with the Calvin Klein Licensing segment.  Partially offsetting this increase was (i) a $3.2million increase in interest expense associated with the financing of the Calvin Klein acquisition; and (ii) a $2.9 million decline in theoperating earnings of the Apparel and Footwear segment, as the continued strong performance of the Company's wholesale apparel businesses wasmore than offset by earnings declines experienced in the Company's retail businesses.

The decrease in net income per diluted common share in the fourth quarter, excluding restructuring, transition and otheritems, was due to $5.3 million of dividends on the Company's convertible redeemable preferred stock and an increase in average common sharesoutstanding.  The convertible preferred stock and additional common stock were both issued in connection with the Calvin Klein acquisition.(Please see Note 2 to Consolidated Income Statements for details of earnings per share computations.)

Total revenues in the fourth quarter increased 13% to $357.1 million from $315.3 million in the prior year.  For the year,total revenues were $1,582.0 million in 2003, an increase of 13% over the prior year's $1,405.0 million.  Fiscal 2003 revenues include sales of$4.6 million and $21.8 million from the Calvin Klein men's and women's wholesale collection apparel businesses in the fourth quarter and year,respectively.  The increases in total revenues were due principally to the addition of royalty revenues generated by the Calvin Klein Licensingsegment, as well as an increase in the 

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Company's wholesale sportswear business.  The current year increases were partially offset by sales declines in theCompany's retail businesses.

Commenting on these results, Bruce J. Klatsky, Chairman and Chief Executive Officer noted, "We are pleased with ourresults for the fourth quarter and year.  The sharp earnings declines exhibited by our retail businesses in the first nine months of the yearstabilized during the Christmas season, which, combined with the continued strong growth in our wholesale dress shirt and sportswear businessesand the positive earnings impact of the Calvin Klein businesses, enabled our earnings to be at the high end of our previous earnings guidance.In addition, we ended the year with $133 million of cash, an increase of $16 million from last year, and ahead of our previous cash flowestimate for the year."

Mr. Klatsky continued, "The integration of the Calvin Klein operations is complete.  We have finalized the transfer ofthe Calvin Klein men's and women's wholesale collection apparel businesses to Vestimenta.  The better women's sportswear line, licensed to ajoint venture formed by Kellwood and GAV, had an extremely successful initial launch for Spring 2004.  Similarly the launch of the men's bettersportswear line for Fall 2004 is going significantly better than planned."

Mr. Klatsky further stated, "We have already begun implementation of our recently announced strategic initiatives,which will allow us to concentrate on maximizing the growth opportunities of the Calvin Klein brand and our existing wholesale dress shirt andsportswear businesses. These initiatives include exiting the Bass Wholesale footwear business and licensing it to Brown Shoe Company, andclosing approximately 200 outlet stores across our retail chains."

Mr. Klatsky added, "We are pleased with our recent debt refinancing, in which we redeemed our $150 million 9 1/2%senior subordinated notes due 2008 and issued $150 million of 7 1/4% senior notes due 2011.  This transaction will provide us with interestexpense savings and greater financial flexibility."

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Mr. Klatsky concluded, "We expect that 2004 earnings per share, excluding certain charges, will be in a range of $1.10to $1.15, with first quarter earnings per share in the range of $0.13 to $0.14.  Such excluded charges relate to exiting the Bass wholesalefootwear business, closing underperforming retail outlet stores, and the debt extinguishment costs associated with our recent bond refinancing.Including these charges, we estimate that GAAP earnings per share in 2004 will be in a range of $0.50 to $0.55, with the first quarter net lossper share in the range of $0.16 to $0.17.  Total revenues in 2004 are expected to be $1,600 million to $1,620 million, or an increase ofapproximately 1.0% - 2.5% over 2003.  Revenues for 2004 are being impacted by the exiting of the Bass Wholesale footwear business and theretail store closing program." (Please see reconciliation of GAAP to non-GAAP earnings per share estimates at the end of this press release.)

 

 

 

 

The Company webcasts its conference calls to review its earnings releases.**The Company's conferencecall to review its year end earnings release is scheduled for Tuesday, March 9, 2004 at 11:00 a.m. EST.**  Please log on either to our website at**www.pvh.com** and go to the News Release page or to CCBN's website at www.companyboardroom.com to listen to the live webcast ofthe conference call.  The webcast will be available for replay for 30 days after it is held, commencing approximately two hours after the livebroadcast ends.  Please log on to www.pvh.com or www.companyboardroom.com as described above to listen to the replay.   In addition, an audio replay ofthe conference call is available for 48 hours starting one hour after it is held.  The replay of the conference call can be accessed by calling1-800-428-6051 and using passcode # 336674.  The conference call and webcast consist of copyrighted material.  They may not be re-recorded,reproduced, retransmitted, rebroadcast or otherwise used without the Company's express written permission.  Your participation represents yourconsent to these terms and conditions, which are governed by New York law. 
* * * * * * * *

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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-lookingstatements in this press release and made during the conference call / webcast, including, without limitation, statements relating to theCompany's plans, strategies, objectives, expectations and intentions, are made pursuant to the safe harbor provisions of the Private SecuritiesLitigation Reform Act of 1995.  Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties,many of which cannot be predicted with accuracy, and some of which might not be anticipated, including, without limitation, the following: (i)the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company;(ii) the levels of sales of the Company's apparel and footwear products, both to its wholesale customers and in its retail stores, and thelevels of sales of the Company's licensees at wholesale and retail, and the extent of discounts and promotional pricing in which the Companyand its licensees are required to engage, all of which can be affected by weather conditions, changes in the economy, fuel prices, reductionsin travel, fashion trends and other factors;  (iii) the Company's plans and results of operations will be affected by the Company's ability tomanage its growth and inventory, including the Company's ability to realize revenue growth from developing and growing Calvin Klein; (iv) theCompany's operations and results could be affected by quota restrictions (which, among other things, could limit the Company's ability toproduce products in cost-effective countries that have the labor and technical expertise needed), the availability and cost of raw materials(particularly petroleum-based synthetic fabrics, which are currently in high demand), the Company's ability to adjust timely to changes intrade regulations and the migration and development of manufacturers (which can affect where the Company's products can best be produced), andcivil conflict, war or terrorist acts, the threat of any of the foregoing or political and labor instability in the United States or any of thecountries where the Company's products are or are planned to be produced; (v) disease epidemics and health related concerns, which could resultin closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas; (vi)acquisitions and issues arising with acquisitions and proposed transactions, including without limitation, the ability to integrate an acquiredentity into the Company with no substantial adverse affect on the acquired entity's, or the Company's existing operations, employeerelationships, vendor relationships, customer relationships or financial performance; (vii) the failure of the Company's licensees to marketsuccessfully licensed products or to preserve the value of the Company's brands, or their misuse of the Company's brands and (viii) other risksand uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.

This press release includes certain non-GAAP financial measures, as defined under SEC rules.  A reconciliation of these measures is includedin the financial information later in this release.

The Company does not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimateregarding revenues or earnings, whether as a result of the receipt of new information, future events or otherwise.

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***PHILLIPS-VAN HEUSEN CORPORATION

Consolidated Income Statements

(In thousands, except per share data)
 **Quarter Ended   **2/1/04     **Results     **Excluding    **Restructuring,**Restructuring,   **Results**Transition**Transition **Quarter **Under**and Other**and Other **Ended **GAAP**Items (1)**Items(1) **2/2/03      
Net sales
$321,577
$  4,627
$316,950 
$310,634
Royalty and other revenues
    35,512

    35,512 
     4,623
Total revenues
$357,089
$  4,627
$352,462 
$315,257      
Gross profit on net sales
$115,730
$ (8,033)
$123,763 
$127,567
Gross profit on royalty and     
  other revenues
    35,512

    35,512 
     4,623
Total gross profit
151,242
(8,033)
159,275 
132,190      
Selling, general and      
  administrative expenses
  156,484
  20,717
  135,767 
  117,524      
Earnings (loss) before interest and      
  taxes
(5,242)
(28,750)
23,508 
14,666      
Interest expense, net
     8,962

     8,962 
    5,800      
Pre-tax income (loss)
(14,204)
(28,750)
14,546 
8,866      
Income tax expense (benefit)
     (5,052)
   (9,997)
     4,945 
    3,140      
Net income (loss)
(9,152)
(18,753)
9,601 
5,726      
Preferred stock dividends
      5,281

     5,281 
      
Net income (loss) available to     
  common stockholders
$(14,433)
$(18,753)
$   4,320 
$  5,726      
Basic net income (loss) per      
  common share (2)
$    (0.47) 
$     0.14 
$     0.21      
Diluted net income (loss) per     
  common share (2)
$    (0.47) 
$     0.14 
$     0.20      
 (1) Restructuring, transition and other items include the following:

·	Sales of $4.6 million from the Calvin Klein men's and women's wholesale collection apparel businesses which, effective January 1, 2004,have been licensed to a third party.

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·	Pre-tax Calvin Klein integration costs of $8.0 million, which consist of (i) the operating losses of certain Calvin Klein businesses,principally relating to the men's and women's wholesale collection apparel businesses, which the Company has closed or licensed, and associatedcosts in connection therewith, and (ii) the costs of certain duplicative personnel and facilities incurred during the integration of variouslogistical and back office functions.

·	The pre-tax cost of $9.6 million associated with licensing the Bass brand for wholesale distribution to Brown Shoe Company and exiting thewholesale footwear business.

·	The pre-tax cost of $11.1 million associated with the impairment and closing of approximately 200 retail outlet stores.

 (2) Please see the Notes to Consolidated Income Statements for a reconciliation of basic and diluted net income(loss) per common share.

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***PHILLIPS-VAN HEUSEN CORPORATION

Consolidated Income Statements

(In thousands, except per share data)
 **Year Ended   **2/1/04     **Results     **Excluding    **Restructuring,**Restructuring,   **Results**Transition**Transition **Year **Under**and Other**and Other **Ended **GAAP**Items(2)**Items(2) **2/2/03      
Net sales
$1,438,891
$ 21,829
$1,417,062 
$1,393,207
Royalty and other revenues(1)
     143,120

     143,120 
       11,766
Total revenues(1)
$1,582,011
$  21,829
$1,560,182 
$1,404,973      
Gross profit on net sales
$   514,414
$ (10,616)
$   525,030 
$   519,464
Gross profit on royalty and     
  other revenues(1)
     143,120

     143,120 
       11,766
Total gross profit(1)
657,534
(10,616)
668,150 
531,230      
Selling, general and      
  administrative expenses(1)
601,752
46,489
555,263 
462,195      
Gain on sale of investment
        3,496
    3,496
 
      
Earnings (loss) before interest and     
  taxes
59,278
(53,609)
112,887 
69,035      
Interest expense, net
       36,372

      36,372 
        22,729      
Pre-tax income (loss)
22,906
(53,609)
76,515 
46,306      
Income tax expense (benefit)
         8,200
   (17,815)
     26,015 
       15,869      
Net income (loss)
14,706
(35,794)
50,500 
30,437      
Preferred stock dividends
       20,027

     20,027 
      
Net income (loss) available to

  

  common stockholders
$     (5,321)
$ (35,794)
$   30,473 
$     30,437      
Basic net income (loss)     
  per common share (3)
$      (0.18) 
$      1.01 
$         1.10      
Diluted net income (loss)     
  per common share (3)
$      (0.18) 
$      0.98 
$         1.08      
 (1) In the fourth quarter of 2003, the Company reclassified its recording of advertising contributions received fromits licensees.  As a result, the sum of the Company's previously disclosed totals for revenues, gross profit and selling, general andadministrative expenses in 

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the first three quarters of 2003, when added to the current year's fourth quarter, does not equal the full year to datetotals.  The reclassification had no effect on net income.

 (2) Restructuring, transition and other items include the following:

·		Sales of $21.8 million from the Calvin Klein men's and women's wholesale collection apparel businesses which, effective January 1,2004, have been licensed to a third party.

·	Pre-tax Calvin Klein integration costs of $36.4 million, which consist of (i) the operating losses of certain Calvin Klein businesses,principally relating to the men's and women's wholesale collection apparel businesses, which the Company has closed or licensed, and associatedcosts in connection therewith, and (ii) the costs of certain duplicative personnel and facilities incurred during the integration of variouslogistical and back office functions.

·	The pre-tax gain on the sale of Gant Company AB. In the second quarter of fiscal 2003, the Company sold its minority interest in Gant for$17.2 million, after related fees and expenses, which resulted in a one-time pre-tax gain of $3.5 million.

·	The pre-tax cost of $9.6 million associated with licensing the Bass brand for wholesale distribution to Brown Shoe Company and exiting thewholesale footwear business.

·	The pre-tax cost of $11.1 million associated with the impairment and closing of approximately 200 retail outlet stores.

 (3) Please see the Notes to Consolidated Income Statements for a reconciliation of basic and diluted net income(loss) per common share.

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Notes to Consolidated Income Statements:

1. The Company believes presenting its results excluding restructuring, transition and other items provides usefulinformation to investors because many investors make decisions based on the ongoing operations of an enterprise.  The Company believes thatinvestors often look at  ongoing operations as a measure of assessing performance and as a basis for comparing past results against futureresults.  The Company uses its results excluding restructuring, transition and other items to discuss its business with investmentinstitutions, the Company's Board of Directors and others.  Such results are also the basis for certain incentive compensationcalculations.

2. The Company computed its basic and diluted net income (loss) per common share as follows:

(In thousands, except per share data)
 **Quarter Ended **2/1/04  **Results    **Excluding    **Restructuring,   **Results**Transition **Quarter **Under**and Other **Ended **GAAP**Items **2/2/03     
Net income (loss)
$ (9,152)
$9,601 
$ 5,726     
Less: Preferred stock dividends
    5,281
   5,281 
     
Net income (loss) available to common    
 stockholders for basic and diluted    
 net income (loss) per common share
$(14,433)
$4,320 
$ 5,726     
Weighted average common shares    
 outstanding for basic net income    
 (loss) per common share
30,570
30,570 
27,813     
Impact of dilutive employee stock    
 options

   1,218 
      257     
Total shares for diluted net income    
 (loss) per common share
  30,570
 31,788 **********************************************************************************************************