PVH reverses losses with steady sales growth, raises full-year earnings forecast

PVH Corp., owner of Tommy Hilfiger and Calvin Klein, reported a 4% increase in its third quarter revenue to $2.363 billion, a performance that led them to upgrade their expected earnings for the entire year.

The company, based in New York, stated that 4% of this revenue growth was attributable to Tommy Hilfiger, which realized a 3% sales increase internationally and a 6% rise in North America. Concurrently, Calvin Klein revenues were up 6%, majorly sustained by a 10% jump in international sales, somewhat mitigated by a 1% drop in North American sales.

Heritage Brands, however, recorded an 11% revenue fall compared to the same period in the previous year. The company reported having finalized its sale of Heritage Brands on November 27 as planned.

In terms of channels, an 8% growth was observed in direct-to-consumer revenue. This was fueled by expansion in the company's owned and operational stores and its digital commerce business across all regions. Overall, digital revenue surged 13%.

With PVH's wholesale customers taking a more pragmatic approach, however, wholesale revenue only rose by 1%.

The company regained its profitability during the quarter, recording a net income of $161.6 million, a significant improvement from the previous year's net loss of $186.7 million.

Stefan Larsson, CEO of PVH, remarked, "This quarter saw high single-digit revenue growth for our direct-to-consumer businesses in both Calvin Klein and Tommy Hilfiger, with collective improvement across all regions. We outperformed our EPS forecast."

He added that through the effective implementation of the PVH+ Plan, the company strengthened its product categories, improved its marketing campaigns, and grew its demand-focused supply chain. "We expanded our gross margin, heightened inventory productivity, and invested more in marketing, driving strong customer engagement and vastly improved profitability. We are tapping into the innate strength of our iconic brands to develop them into the most coveted lifestyle brands globally."

With its robust year-to-date performance, Larsson stated that the company is raising its earnings per share guidance for the year. It now anticipates EPS to be about $9.75, a rise from the previously estimated $9.60.

The company's full-year revenue is now projected to increase by roughly 1%, a reduced rate from the formerly anticipated 3% to 4% growth. PVH clarified that the projection takes into account the effect of the recently completed sale of the Heritage Brands' intimate apparel business.