PVH Corporation, the parent company of iconic brands like Tommy Hilfiger and Calvin Klein, has reported a 4 per cent increase in revenue to $2.363 billion in the third quarter of fiscal 2023 (Q3 FY23), marking a significant improvement from the prior year. This growth, amounting to a 1 per cent increase on a constant currency basis, was largely driven by the expansion of the company's direct-to-consumer businesses across all regions.

Despite facing a tough macroeconomic environment in Europe, PVH's international businesses managed to maintain a steady pace, with a 1 per cent increase in revenue on a constant currency basis compared to the prior year. Notably, in North America, the combined revenue of Tommy Hilfiger and Calvin Klein brand businesses grew by 2 per cent, PVH Corporation said in a press release.

The company's direct-to-consumer revenue saw an impressive 8 per cent rise (6 per cent on a constant currency basis), bolstered by growth in both owned and operated stores and digital commerce across various regions. However, wholesale revenue only saw a marginal 1 per cent increase (a 3 per cent decrease on a constant currency basis), reflecting the cautious approach of wholesale customers.

Digital sales showed remarkable growth with a 13 per cent increase (8 per cent on a constant currency basis) in total digital revenue, including both owned digital commerce and wholesale sales to e-commerce businesses and pure players. Digital transactions now account for approximately 20 per cent of the total revenue.

PVH Corporation also reported a healthier gross margin of 56.7 per cent, up from 55.9 per cent in the prior year. Additionally, the company successfully reduced its inventory by 19 per cent compared to the previous year.

Breaking down the performance by brand, Tommy Hilfiger's revenue increased by 4 per cent (flat on a constant currency basis), with a 6 per cent rise in North America and a 3 per cent increase (3 per cent decrease on a constant currency basis) internationally. Calvin Klein showed a 6 per cent increase in revenue (3 per cent on a constant currency basis), with international revenue up by 10 per cent (6 per cent on a constant currency basis) and a slight 1 per cent decrease in North America, attributed to the wholesale business.

PVH's earnings before interest and taxes (EBIT) on a GAAP basis were $230 million, a substantial improvement from a loss of $214 million in the prior year period. Earnings per share (EPS) on a GAAP basis were $2.66, compared to a loss of $2.88 in the prior year, and $2.90 on a non-GAAP basis, up from $2.60 in the prior year period.

“We delivered another strong quarter, with high single-digit revenue growth for our direct-to-consumer businesses across Calvin Klein and Tommy Hilfiger, with growth in all regions, and we exceeded our EPS guidance. Through our disciplined PVH+ Plan execution, we are gaining increasing traction in our product category offense and hero products, our cut-through marketing campaigns, and building out our demand-driven supply chain. We expanded gross margin, improved inventory productivity, and increased our marketing investments, driving strong consumer engagement and overall, significantly improved profitability,” said Stefan Larsson, chief executive officer.Top of Form

Fibre2Fashion News Desk (DP)

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