June 4, 2018
CEO and Chairman Emanuel (Manny) Chirico opened PVH’s May 31 earnings call by declaring, “We posted a real strong start to the year.”
PVH’s overall first-quarter revenues increased 16 percent compared to the prior year period, with growth in all divisions and regions, exceeding expectations. All distribution channels were strong, with digital again the fast-growing with revenues from both company-operated and third-party websites up 20 percent.
“Our international businesses continued to experience great momentum and we are enthusiastic about the growth ahead of us in our Calvin Klein and Tommy Hilfiger businesses,” Chirico said. “Additionally, our increasing use of global and regional ambassadors and influencers is allowing us to reach new consumers and build our share of voice globally resulting in global market share gains.”
North America, despite some overall industry challenges, was another strong market for PVH, including from a welcome increase in the important international tourist business.
“What we're really trying to do when you cut through it all is bring the consumer into the brand experience, engage them and make them a part of the brand. And what it's really done for us is it's opened up a new consumer that's much younger. We're introducing both the CALVIN KLEIN and TOMMY HILFIGER brands to a much younger consumer, engaging with them and transacting with them both in store and online. That’s been the focal point and that will continue to be the focal point,” Chirico said.
Chirico noted the “conscious effort” to build Calvin Klein’s long-term fashion relevancy as a premium brand and Tommy Hilfiger’s consumer-centric approach to engage shoppers.
“Overall, I’m very pleased with the first quarter performance and I'm proud of the progress that our teams are executing against our strategic plan in the face of the changing dynamics in the industry. Looking at the second quarter today, we are off to a strong start,” Chirico added.
Highlights for Calvin Klein, Tommy Hilfiger and Heritage Brands:
-Calvin Klein. Revenue increased 18 percent to $890 million compared to the prior-year period, with a jump in international revenue of 25 percent. Strong top-line growth came from Europe and China with North America experiencing improving trends across all channels. North America comps were up 5% in the first quarter and our international comparable store sales increased 9% in the quarter. Earnings before interest and taxes was up 16 percent.
-Tommy Hilfiger: Revenue for the quarter increased 21 percent to $1 billion compared to the prior year period, and the business experience strong gross margin expansion. Tommy Hilfiger’s international revenue grew 25 percent and North America increased 13 percent, mostly attributed to a 9 percent increase in comparable store sales and a strong wholesale performance.
-Heritage Brands: Revenues for the quarter rose 5 percent, well above plan, to $409 million. This was partly due to a calendar shift in the wholesale business, which benefited the first quarter of 2018 relative to the second quarter of 2018. Additionally, the retail business posted a 1 percent comparable store sales increase. Earnings before interest and taxes were up 30 percent over the prior year. Chirico also noted a new opportunity coming this summer for the Heritage Brands brands business with the launch of its e-commerce site in North America.
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