PVH raises earnings outlook, announces departure of Tommy Hilfiger CEO

First quarter revenue at PVH decreased 10 percent or 9 percent on a constant currency basis to 1.952 billion dollars, which exceeded guidance of a decrease of approximately 11 percent or 10 percent on a constant currency basis.

PVH also announced that Martijn Hagman, CEO of Tommy Hilfiger Global and PVH Europe, will be leaving the company. He will serve in an advisory capacity to facilitate a smooth transition. David Savman, PVH’s chief supply chain Officer, will serve as interim CEO for PVH Europe.

The company reaffirmed projected decrease in its full year revenue but raised outlook for the GAAP and non-GAAP earnings per share.

Commenting on the first quarter trading, Stefan Larsson, PVH chief executive officer, said: “We delivered on our revenue expectations, led by growth in our direct-to-consumer business, and beat our earnings guidance for the first quarter.”

Highlights of PVH Q1 financial results

The company said in a statement that overall revenue in the international businesses decreased 9 percent as solid growth in the Asia Pacific region in local currency was more than offset by a revenue decline in Europe. In North America, revenue in the Tommy Hilfiger and Calvin Klein businesses combined was up 3 percent.

Direct-to-consumer revenue increased 1 percent or 3 percent on a constant currency basis. Revenue in the Company’s owned and operated stores increased 3 percent or 5 percent on a constant currency basis, with growth in all regions, while revenue in the company’s owned and operated digital commerce business declined 6 percent or 5 percent on a constant currency basis, with growth in the North America and Asia Pacific regions more than offset by a planned reduction in Europe.

Wholesale revenue decreased 17 percent reported and on a constant currency basis, primarily due to a 6 percent reduction related to the sale of the Heritage Brands women's intimates business and the planned strategic reduction in revenue in Europe.

PVH posts revenue decline in Tommy Hilfiger segment

The company added that Tommy Hilfiger revenue decreased 10 percent or 9 percent on a constant currency basis including international revenue decrease of 14 percent or 13 percent on a constant currency basis and North America revenue increase of 2 percent.

Calvin Klein revenue remained flat or increased 1 percent on a constant currency basis with international revenue decreasing 2 percent or flat on a constant currency basis and North America revenue increased 4 percent. Heritage Brands revenue decreased 65 percent compared to the prior year period, which included a 47 percent decrease resulting from the sale of the Heritage Brands women's intimates business.

Gross margin increased 350 basis points to 61.4 percent, while EBIT for the quarter was 205 million dollars on a GAAP basis and 195 million dollars on a non-GAAP basis. EPS on a GAAP basis rose to 2.59 dollars and to 2.45 dollars on non-GAAP basis.

PVH reaffirms full year guidance

PVH reaffirmed a projected decrease of 6 percent to 7 percent for 2024, inclusive of a 2 percent reduction related to the sale of the Heritage Brands women’s intimates business and a 1 percent reduction from the 53rd week in 2023.

The company continues to project operating margin to be approximately flat compared to 10.1 percent in 2023 and EPS on GAAP basis is projected to be in a range of 11.15 dollars to 11.40 dollars and non-GAAP EPS to be in a range of 11 dollars to 11.25 dollars.

The company expects second quarter revenue to decrease 6 percent to 7 percent and EPS to be approximately 2.25 dollars on a GAAP basis and 1.98 dollars on a non-GAAP basis in the prior year period.