Tommy Hilfiger Corporation (NYSE: TOM) today reported its results for the first quarter ended June 30, 2000 of fiscal year 2001.

For the first quarter of fiscal 2001, diluted earnings per share were $0.10 versus $0.40 for the comparable period last year. Net revenue was $399.9 million compared to $419.1 million in the first quarter of last year. Net income was $9.7 million versus $38.7 million in the same period a year ago. There were 93.4 million average shares and share equivalents outstanding during the quarter, compared to 96.0 million average shares and share equivalents outstanding last year. The results reflect a two-for-one stock split in the form of a 100 percent stock dividend paid on July 9, 1999.

"As expected, this was a very challenging quarter for us", said Joel Horowitz, chief executive officer. "We experienced very strong growth in our children's division, as well as in our retail segment, resulting from new outlet store openings and expansions. These increases in revenues were more than offset, however, by anticipated declines in the menswear and womenswear components, which, as we expected, continue to reflect an imbalance of supply and demand in a very promotional retail climate. Also as expected, we experienced reductions in gross margins and future order backlog."

Mr Horowitz continued: "As we have previously stated, fiscal 2001 is a repositioning and rebuilding year for us. We are well underway with our efforts to offer consumers an improved assortment of Tommy Hilfiger products with the traditional styling, quality and fit they have come to expect.

The results of these efforts will take time to work through our product cycle, and therefore are not expected to materialize until the second half of this fiscal year. These and other business improvements, including balancing supply and demand and streamlining operations, will continue to be our primary focus as we stabilize our sales base and gross margins. We also plan to continue to invest in the Tommy Hilfiger brand and have maintained our commitment to a strong marketing program."

Mr Horowitz added: "Our balance sheet remains strong. We finished the quarter with $264.9 million of cash, and our ratio of debt to total capital is now 32.7%."

The company also reported that during the quarter it repurchased a total of 2.5 million of its ordinary shares for approximately $20 million under an authorization from its board of directors to repurchase up to $150 million in shares over 18 months.

Tommy Hilfiger Corporation, through its subsidiaries, designs, sources and markets men's and women's sportswear, jeanswear and childrenswear under the Tommy Hilfiger trademarks. Through a range of strategic licensing agreements, the company is expanding its product lines to offer a broader array of apparel, accessories, footwear, fragrance and home furnishings. The company's products can be found in leading department and specialty stores throughout the United States, Canada, Mexico, Central and South America, Europe, Japan, Hong Kong and other countries in the Far East.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are indicated by words or phrases such as "anticipate," "estimate," "project," "expect," "believe" and similar words or phrases. Such statements are based on current expectations and are subject to certain risks and uncertainties, including, but not limited to, the overall level of consumer spending on apparel, the financial strength of the retail industry generally and the Company's customers in particular, changes in trends in the market segments in which the Company competes, the level of demand for the Company's products, actions of existing or new competitors and changes in economic or political conditions in the markets where the Company sells or sources its products, as well as other risks and uncertainties set forth in the Company's publicly-filed documents, including its Annual Report on Form 10-K for the fiscal year ended March 31, 2000. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.

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