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PVH Corp revenue up 1% to $2.4 bn in Q2 2019

30
Aug '19
Pic: PVH Corp
Pic: PVH Corp
The second quarter revenue of PVH Corp, one of world's top fashion and lifestyle companies, increased 1 per cent to $2.4 billion (up 3 per cent on a constant currency basis) compared to the prior year period. Revenue for the first six months of 2019 increased 2 per cent to $4.7 billion (up 5 per cent on a constant currency basis) compared to last year.

Revenue in the Tommy Hilfiger business for second quarter increased 8 per cent to $1.1 billion (increased 10 per cent on a constant currency basis) compared to the prior year period. Tommy Hilfiger international revenue increased 18 per cent to $697 million compared to the prior year period, primarily driven by outperformance experienced in Europe and the addition of revenue resulting from the Australia acquisition. International comparable store sales increased 9 per cent. Tommy Hilfiger North America revenue decreased 5 per cent to $413 million compared to the prior year period, driven by an 8 per cent decline in North America comparable store sales due to weakness in traffic and consumer spending trends, especially in stores located in international tourist locations.

Revenue in the Calvin Klein business for the quarter decreased 6 per cent to $873 million (decreased 4 per cent on a constant currency basis) compared to the prior year period, which includes an aggregate net reduction of approximately 2 per cent resulting from (i) the winding down of the company's directly operated women's jeanswear wholesale business in the US and Canada in connection with the licensing of this business to G-III Apparel Group (ii) the closure of the Calvin Klein 205 W39 NYC brand and (iii) the addition of revenue resulting from the Australia acquisition.

Calvin Klein international revenue increased 1 per cent to $465 million compared to the prior year period, driven by continued solid growth in Europe and revenue from the Australia acquisition, partially offset by a reduction of revenue as a result of the CK Collection closure and softness experienced across China. International comparable store sales were flat. Calvin Klein North America revenue decreased 13 per cent to $409 million compared to the prior year period, principally due to the effect of the G-III license and a 3 per cent decline in North America comparable store sales due to weakness in traffic and consumer spending trends, especially in stores located in international tourist locations.

Revenue in the Heritage Brands business for the quarter of $381 million was flat compared to the prior year period. Comparable store sales declined 2 per cent.

"We are pleased to report our second quarter results, which saw continued outperformance by our European businesses. However, our businesses in North America and across China experienced weak traffic trends, including the impact of protests in Hong Kong, resulting in a more promotional environment, said Emanuel Chirico, chairman and chief executive officer.

Although we are pleased with our second quarter and first half results, we have taken a conservative approach to our second half outlook. As such, we lowered our annual revenue and EPS outlook based on our current trends and our expectation that the volatility in the macro environment, the global retail landscape and the continuing escalation of the trade tensions between US and China will cause our business to remain under pressure, as will the ongoing impact of protests in Hong Kong.

We have great confidence in our diversified business model and the underlying power of Calvin Klein and Tommy Hilfiger, and believe we are positioning our businesses to succeed in the ever-changing consumer landscape. As we execute on our strategic priorities, our ongoing data and digital transformation, together with delivering the best product and consumer experience, should allow us to capture the heart of the consumer. We believe that with our two greatest assets, our people and our brands, we will unlock the long term brand growth opportunities we see and deliver sustainable long term returns for our stockholders."

The 2019 guidance incorporates the impact on certain of the company's products of tariffs imposed and expected to be imposed by the US on goods imported from China into the US, including (i) $250 billion of total goods imported from China into the US currently at 25 per cent, with an expected increase to 30 per cent in October 2019, and (ii) $300 billion of total goods imported from China into the US at 15 per cent expected to be imposed in September 2019 and December 2019. These tariffs are expected to have a negative impact of approximately $0.20 per share in 2019.

The company's 2019 guidance also reflects the Australia acquisition and the TH CSAP acquisition that closed in the second quarter of 2019, and the impact of the CK Collection closure and the G-III license. These transactions are expected to result in a net addition to revenue of approximately $75 million in 2019.

Revenue in 2019 is projected to increase approximately 1 per cent as compared to 2018. Revenue for the Tommy Hilfiger business is projected to increase approximately 5 per cent. Revenue for the Calvin Klein business is projected to decrease approximately 2 per cent. Revenue for the Heritage Brands business is projected to decrease approximately 1 per cent. (PC)

Fibre2Fashion News Desk – India


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