PVH returns to profit on steady sales growth, lifts full-year earnings outlook

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PVH Corp. announced on Wednesday revenues for the third quarter rose 4% to $2.363 billion, prompting the owner of the Tommy Hilfiger and Calvin Klein brands to raise its full-year earnings outlook.

Calvin Klein

The New York-based company said Tommy Hilfiger revenue increased 4%, with sales up 3% internationally and 6% in North America. Likewise, Calvin Klein revenues increased 6%, held up by a 10% surge in international sales, partially offset by a 1% decreased in North America.

Heritage Brands revenue decreased 11% compared to the prior year period, with the company adding it had completed its previously announced sale of the Heritage business on November 27.

By channel, ​direct-to-consumer revenue increased 8%, with growth in both the company’s owned and operated stores and digital commerce business in all regions, with the firm’s total digital revenue increasing 13%. 

Wholesale revenue increased just 1%, as wholesale customers continued to take a cautious approach, added PVH.

PVH returned to profit during the three months, posting net income of $161.6 million, compared to a net loss of $186.7 million 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,” said ​​Stefan Larsson, chief executive officer, PVH.

“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. We continue to see incredible strength in our iconic brands as we tap into their beloved DNA and build them into the most desirable lifestyle brands in the world.”

The executive added that based on his company’s solid year-to-date performance, PVH is raising its earnings per share guidance for the full year.

It now expects EPS to be approximately $9.75, up from approximately $9.60 previously.

Full-year revenue is projected to increase approximately 1%, compared to an increase of 3% to 4% previously. PVH said the outlook includes the impact from the recently concluded sale of the Heritage Brands intimate apparel business.

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