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CEO Emanuel Chirico Discusses 2Q 2018
Performance On Earnings Call

August 30, 2018

PVH Corp. revenue increased 13 percent in the second quarter, with Chairman and CEO Emanuel (Manny) Chirico noting the company’s evolving business model and investment across brands, people and platforms in the earnings call with investors on August 30, 2018.

“Our better-than-expected second-quarter revenue and earnings reflected continued broad-based strength across our businesses, and further underscored the momentum in our global designer lifestyle brands, CALVIN KLEIN and TOMMY HILFIGER, and the power of our diversified business model,” Chirico said. 

Chirico attributed the positive results to a connection with consumers, no matter where they are and where they like to shop. He noted that PVH’s overall digital business – across owned, wholesale and pure-play sites – was up over 20 percent. 

The brands are also exciting shoppers with more frequent newness through capsule collections and frequent “drops,” and enhanced omnichannel capabilities.

“We are driving consumer engagement through innovative designs and personalized brand and shopping experiences that capture the heart of the consumer,” he said. “We continue to invest in the brand experiences across all channels of distribution from stores to wholesale presentation and digital experiences.”

He also called out that significant effort and investment are going into expanding the company’s consumer insights, growing our global footprint and creating a “sustainable trajectory” of growth and stockholder value creation. 

As a result of all of the above, PVH increased its revenue and earnings guidance for the year – with the caveat that the company is aware of increasing macroeconomic and geopolitical volatility. There also is a nuance around the calendar, as fiscal 2017 included a 53rd week while fiscal 2018 is a 52-week year.  

Chirico outlined specific results for Calvin Klein, Tommy Hilfiger and Heritage Brands:

-Calvin Klein: Revenue increased 18 percent to $925 million compared to the prior year period, with a 16 percent jump in international revenue and 19 percent in North America.

The brand marketing has zeroed in on leveraging its already successful #myCalvins campaign, adding regional and local influencers’ participation to complement global brand ambassadors to maximize consumer engagement and drive local market activations. 

There’s already traction for the Kardashian-Jenner 2.0 Fall campaign, and the monogram launch and modern cotton programs are resonating with consumers. The global CALVIN KLEIN JEANS relaunch will be supported with a new multimedia campaign that features extended digital content across all social platforms throughout the season. 

The new fragrance, Calvin Klein Woman, made a big splash with Lupita Nyong'o and Saoirse Ronan, inspiring consumers to pay homage to the important women in their lives. 

-Tommy Hilfiger: Revenue increased 15 percent to $1 billion, with an increase of 20 percent on the international side and a 9 percent increase in North America. 

Chirico looked ahead to new initiatives on the immediate horizon in 3Q, including the TommyNow fashion show in Shanghai and a Tmall Super Brand Day in China – both September 4. 

He said Formula 1® Champion Lewis Hamilton has clicked with younger consumer’s as the brand men’s ambassador, and he predicted the same will happen with Winnie Harlow, Hailey Baldwin and Maggie Jiang, a Chinese actress recently announced as a regional ambassador to support the China women’s business. 

-Heritage Brands: Revenue decreased 3 percent to $380 million, however, comparable store sales increased 3 percent. 

Initial response to the new e-commerce sites VanHeusen.com, IZOD.com and styleBureau.com has been encouraging, and there’s further opportunity with IZOD’s expansion to Spain, Germany, The Netherlands and Scandinavia. 

In marketing, a highlight is the new campaign for the Van Heusen brand with the UFC and a new commercial featuring UFC Bantamweight Champion, T.J. Dillashaw; and UFC Welterweight Contender, Stephen Thompson.

Before completing his remarks, Chirico looked ahead to the second half of the year: “We believe that the incredible brand power behind CALVIN KLEIN and TOMMY HILFIGER continues to position us well in the marketplace against our competition and will drive continued momentum into the future,” he said. 

To read full financial results, click here: https://www.pvh.com/news/2365354