PVH says earnings hit by COVID-19 outbreak

Fourth quarter revenue at PVH Corp increased 5 percent or 6 percent on constant currency basis to 2.6 billion dollars compared to the prior year period. The company said in a statement that loss per share on a GAAP basis was 93 cents for the quarter compared to earnings per share of 2.09 dollars in the prior year period, while on non-GAAP basis earnings per share were 1.88 dollars. Revenue for 2019 increased 3 percent or 5 percent on constant currency basis to 9.9 billion dollars compared to the prior year, while earnings per share on a GAAP basis was 5.60 dollars for 2019 compared to 9.65 dollars in the prior year and earnings per share on a non-GAAP basis was 9.54 dollars compared to 9.60 dollars in the prior year. The company said, EPS included a negative impact of approximately 25 cents per share due to additional inventory reserves recorded as a result of the onset of the COVID-19 outbreak. PVH also expects first quarter and full year 2020 results will include a significant negative impact as a result of the COVID-19 pandemic.

“We are very pleased with these results, with revenue as well as earnings per share on a non-GAAP basis exceeding our guidance. I believe that we are in a solid financial position to navigate the COVID-19 outbreak and this period of unprecedented volatility. We have over 1 billion dollars in cash and available borrowings. We also are taking a hard look at all of our discretionary spending, payroll and salary reductions, capital expenditures and inventory management with a firm focus on managing our cash flow and preserving our cash position and financial standing,” said Emanuel Chirico, Chairman and Chief Executive Officer of the company.

Highlights of Q4 results at PVH

Loss on a GAAP basis for the fourth quarter was 96 million dollars compared to earnings of 134 million dollars in the prior year period and earnings on a non-GAAP basis for the quarter decreased to 150 million dollars compared to 193 million dollars in the prior year period.

Revenue in the Tommy Hilfiger business for the quarter increased 12 percent or 13 percent on constant currency basis to 1.3 billion dollars compared to the prior year period, Tommy Hilfiger International revenue increased 20 percent or 22 percent on constant currency to 865 million dollars, driven by continued outperformance in Europe and the addition of revenue resulting from the Australia and TH CSAP acquisitions. International comparable store sales increased 10 percent. Tommy Hilfiger North America revenue decreased 2 percent to 440 million dollars, as growth in the North America wholesale business was more than offset by a 6 percent decline in North America comparable store sales. Earnings on a GAAP basis decreased to 145 million dollars from 168 million dollars in the prior year period and earnings on a non-GAAP basis for the quarter decreased to 148 million dollars from 171 million dollars in the prior year period.

Revenue in the Calvin Klein business for the quarter decreased 2 percent or 1 percent on a constant currency basis to 936 million dollars compared to the prior year period, while Calvin Klein International revenue increased 6 percent or 8 percent on a constant currency basis to 554 million dollars, driven by continued growth in Europe and the addition of revenue resulting from the Australia acquisition partially offset by continued softness in Asia. International comparable store sales increased 1 percent. The company said, Calvin Klein North America revenue decreased 11 percent to 382 million dollars due to a revenue decrease in the wholesale business resulting from the licensing of the company’s directly operated women’s jeanswear wholesale business in the U.S. and Canada to G-III Apparel Group, Ltd., partially offset by a 4 percent increase in North America comparable store sales. Earnings on a GAAP basis increased to 64 million dollars from 44 million dollars in the prior year period and earnings on a non-GAAP basis for the quarter decreased to 66 million dollars from 84 million dollars in the prior year period.

Revenue in the Heritage Brands business for the quarter decreased 1 percent to 359 million dollars compared to the prior year period, primarily due to weakness in the North America wholesale business, while comparable store sales were flat. Loss on a GAAP basis was 153 million dollars compared to a loss of 8 million dollars in the prior year period, while loss on a non-GAAP basis was 10 million dollars compared to a loss of 8 million dollars on a GAAP basis in the prior year period.

PVH reports increase in full year revenues

The company added that revenue increase during the full year was due to an 8 percent or 11 percent increase on a constant currency basis in the Tommy Hilfiger business compared to the prior year, driven principally by outperformance in Europe and the addition of revenue resulting from the Australia and TH CSAP acquisitions. International comparable store sales increased 9 percent, while North America comparable store sales decreased 6 percent due to weakness in traffic and consumer spending trends, especially in stores located in international tourist locations.

There was a 2 percent decrease or 1 percent increase on a constant currency basis in the Calvin Klein business compared to the prior year, as continued solid growth in Europe and the addition of revenue resulting from the Australia acquisition were more than offset by the negative impacts of foreign currency translation, softness experienced in Asia due to the business disruptions caused by the protests in Hong Kong and the trade tensions between the U.S. and China, the reduction of revenue resulting from the closure of the Calvin Klein 205 W39 NYC brand and the effect of the G-III license. International comparable store sales decreased 1 percent, while North America comparable store sales decreased 2 percent due to weakness in traffic and consumer spending trends, in stores located in international tourist locations.

The company reported a 3 percent decrease in the Heritage Brands business compared to the prior year, primarily due to weakness in the North America wholesale business and a 2 percent decline in comparable store sales.

Earnings on a GAAP basis for 2019 decreased to 559 million dollars, inclusive of a 30 million dollars negative impact due to foreign currency translation, from 892 million dollars in the prior year. Earnings on a non-GAAP basis decreased to 931 million dollars, inclusive of a 30 million dollars negative impact due to foreign currency translation, from 971 million dollars in the prior year principally due to an earnings decline in the Heritage Brands business and an 8 million dollars increase in corporate expenses.

Picture:Tommy Hilfiger website

 

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