PVH CEO Chirico Outlines Q1 2019 Financial
Results – Including $2.4 Billion in Total
Revenue – in Macro-Market Context
PVH Corp. has announced first-quarter 2019 financial results and guidance for the second quarter and full year. Earnings per share for the quarter exceeded the high end of the company’s guidance. That was done, Chairman and CEO Emanuel Chirico explained, in an economic environment that’s under pressure.
“Our performance, particularly against the challenging retail backdrop in the United States and China, truly demonstrated the power of our diversified business model and the ability of our teams to react to emerging business trends,” Chirico said.
Chirico held his quarterly call with investors on May 30, 2019, reporting revenue growth of 2% to $2.4 billion, which was in line with plans. Highlights included strong momentum for the Tommy Hilfiger and Calvin Klein businesses in Europe, and positive signs for Calvin Klein’s improved product and strong marketing converting into sales.
The company’s commitment to growing its digital presence is paying off, as well, with online as the fastest growing revenue channel. “We continue to invest in our consumer data journey. And with the recent promotion of Marie Gulin-Merle to our newly created Chief Digital Officer position, we are focused on creating and driving unique consumer shopping experiences for our customers whether online or in-store,” Chirico said.
He also discussed the appointment of Stefan Larsson in the role of PVH President, with the CEOs of Calvin Klein, Tommy Hilfiger and Heritage Brands, and regional leaders reporting directly to him. “Stefan is a well-rounded seasoned executive who has an appreciation for the changing landscape, consumer centricity and the digital needs of the business as we see it today,” Chirico said.
As the company sees a responsibility to its investors, associates and partners to be strategic in succession planning, Chirico also reiterated that he recently signed a five-year employment agreement.
Chirico believes that PVH is in a strong position heading into the second half of 2019, with great brand power to position the company well against its competition. But Chirico noted that the company is also watching how rhetoric over Chinese tariffs, consumer sentiment in the U.S. and China, and foreign currency translation, as well as the possible implementation of additional tariffs, will affect business the rest of the year and into 2020.
“Despite our first quarter performance, the macro retail environment has gotten more challenging and remains under pressure as we have entered the second quarter. Notably, the U.S. market was weak, driven by a number of factors: from weaker international tourist traffic, to the higher tax bills for many U.S. consumers,” he told investors.
Chirico said PVH was taking the “prudent” step of lowering earnings guidance for the year by $0.10 versus the prior guidance.
“Our teams continue to invest in the strategic areas of the business that address the increasingly dynamic and ever-changing consumer landscape to position us for long-term success. But we also will continue to monitor emerging trends and maintain our flexibility to react accordingly.”
Individual 1Q 2019 brand results and Chirico’s commentary are below:
-Tommy Hilfiger: Revenue increased 4% to $1.1 billion.
“The brand continues to see incredible traction in every major market around the world. And we are seeing consumer engagement and desire to purchase continue to improve.”
-Calvin Klein: Revenue was flat at $890 million.
“There were many exciting brand moments during the quarter … including the brand heat that has continued to improve over the past few months and the brand awareness that has remained strong with an increasing desire to purchase the brand.”
-Heritage Brands: Revenue grew 1% to $415 million.
“Our sportswear business saw healthy performance, and our core intimates business continued to perform well. However, we did continue to experience pressure in our dress furnishings business, particularly in neckwear and also in our retail businesses.