Tommy Hilfiger and Calvin Klein drive revenue growth at PVH

Fourth quarter revenue at PVH Corp. increased 2 percent or 8 percent on a constant currency basis to 2.489 billion dollars.

Tommy Hilfiger revenue increased 3 percent or 10 percent on a constant currency basis, Calvin Klein revenue increased 3 percent or 8 percent on a constant currency basis and Heritage Brands revenue decreased 10 percent compared to the prior year period.

Commenting on the trading update, Stefan Larsson, the company’s chief executive officer, said: “We delivered strong fourth quarter performance with stronger than expected high-single digit constant currency revenue growth and earnings above guidance.”

Review of Q4 results at PVH

The company’s underlying high single-digit revenue growth compared to the prior year period was driven by growth in both its Tommy Hilfiger and Calvin Klein brand businesses. The increase included strong revenue growth in Europe, as well as growth in North America, particularly in the direct-to-consumer business, despite the challenging global macroeconomic environment. The company continued to experience negative impacts from the Covid-19 pandemic in China.

Direct-to-consumer revenue increased 4 percent and 10 percent on a constant currency basis compared to the prior year period. Wholesale revenue was flat or increased 6 percent on a constant currency basis. Total digital revenue decreased 8 percent or 2 percent on a constant currency basis.

Gross margin was 55.9 percent compared to 58.3 percent in the prior year period. EBIT on a GAAP basis was 297 million dollars compared to 223 million dollars in the prior year period. EBIT on a non-GAAP basis was 215 million dollars compared to 175 million dollars in the prior year period. Earnings per share (EPS) on GAAP basis was 2.18 dollars compared to 5.53 dollars, while on non-GAAP basis, EPS was 2.38 dollars compared to 2.84 dollars in the prior year period.

Highlights of PVH's FY22 results

PVH revenue decreased 1 percent to 9.024 billion dollars compared to 2021 and increased 5 percent on a constant currency basis. Tommy Hilfiger revenue decreased 1 percent and increased 7 percent on a constant currency basis. Tommy Hilfiger International revenue decreased 4 percent and increased 6 percent on a constant currency basis, North America revenue increased 9 percent.

Calvin Klein revenue increased 3 percent or 10 percent on a constant currency basis. Calvin Klein international revenue increased 1 percent or 10 percent on a constant currency basis and North America revenue increased 8 percent.

Heritage Brands revenue decreased 26 percent compared to 2021, and includes a 25 percent decrease resulting from the Heritage Brands transaction and the exit from the Heritage Brands retail business.

EBIT on a GAAP basis was 471 million dollars compared to 1.077 billion dollars in 2021, while EBIT on a non-GAAP basis was 857 million dollars compared to 983 million dollars in 2021. GAAP EPS was 3.03 dollars compared to 13.25 dollars in 2021, while Non-GAAP EPS was 8.97 dollars compared to 10.15 dollars in 2021.

PVH expects FY23 revenues to increase between 3 to 4 percent

PVH said, revenue is projected to increase 3 percent to 4 percent or increase 2 percent to 3 percent on a constant currency basis compared to 2022.

Operating margin is projected to be approximately 10 percent and EPS is projected to be approximately 10 dollars compared to 3.03 dollars on a GAAP basis and 8.97 dollars on a non-GAAP basis in 2022.

For the first quarter, revenue is projected to be relatively flat or increase approximately 3 percent on a constant currency basis and EPS is projected to be approximately 1.90 dollars compared to 1.94 dollars in the first quarter of 2022.