Tommy Hilfiger has reported flat earnings growth despite a rise in net sales for its full year and warned that the current trading environment remains challenging.

The fashion group said that total group net sales increased 21% to EUR1.6bn, with a global retail net sales of EUR3.4bn.

Sales growth in wholesale was 16% and retail 29%, driven by organic growth, new store openings and the newly acquired Japan and European Footwear business (12% of the total 21% growth).

Despite pressure on margins in the second half of the year, EBITDA was equal to the full year 2008 figure of EUR270m, the company said.

Fred Gehring, chief executive officer, said: "Like everyone else we have had to address the new economic reality with an increased focus on inventories, receivables, costs and cash, but we are more than pleased that in spite of the unprecedented economic circumstances we were able to continue our growth pattern through the second half of the year, albeit at a much more controlled level.

"We believe that this is a true testament to the incredible global strength of the Tommy Hilfiger brand, our people and our balanced business model.

"We expect the coming year to be challenging but we are focused on the opportunities and have initiated a significant number of organisational adjustments so that over the course of the year we will become a more efficient organisation. We will continue to seek new expansion opportunities in product categories, geographies and store portfolio which allow us to anticipate continued growth."

In Europe total sales increased by 14% to EUR795m. The wholesale operations showed the largest increase as a result of continued growth in all regions and product groups, as well as the inclusion of European footwear sales. The retail business showed 1.3% comparable store sales growth and

In North America, total sales increased 10% to US$898m (EUR636m). Total retail sales growth amounted to 10%.

Elsewhere, the company said that sales in Japan had developed according to plan and are significantly contributing to the overall growth of the company.

"In addition, all our licensing partners in Middle and South America as well as the rest of Asia showed strong high single digit growth rates," the company said.

It added that a total of 100 new stores were opened in the year, taking the global store portfolio to over 900.

Looking ahead, Tommy Hilfiger said: "The global economic climate remains challenging and we, along with many international retailers, have experienced difficult market conditions. Initial figures show that after a challenging start to the spring season, April saw stronger trading and in particular the European market showed a strong recovery around Easter."