PVH Corp revenues rise 4 percent in Q1

REPORT_ PVH Corp, in its first quarter results reported that revenues stood at 1.964 billion dollars, an increase

of 4 percent on a non-GAAP basis as compared to the prior year amount excluding 47 million dollars of revenue related to the Bass business. On a GAAP basis, total revenues increased 3 percent as compared to prior year GAAP revenue of 1.910 billion dollars. Earnings per share on a non-GAAP basis were 1.47 dollars as compared to 1.91 dollars in the prior year’s first quarter. GAAP earnings per share were 0.42 dollars as compared to the prior year’s first quarter loss per share of 0.13 dollars.

The revenue increases over the prior year, were principally driven by growth in the New York headquartered company’s Tommy Hilfiger business of 6 percent and in the company’s Calvin Klein business of 4 percent on a non-GAAP basis and 9 percent on a GAAP basis. These increases were partially offset by a revenue decline of 2 percent in the company’s Heritage Brands business.

Commenting on these results, Emanuel Chirico, Chairman and Chief Executive Officer, noted, “We are pleased with our first quarter results, which were in line with our expectations, despite the unseasonably cool weather in North America and the volatility experienced in the global retail environment in the first quarter. The power of our brands, led by Calvin Klein and Tommy Hilfiger, remains strong, and we believe that the investments we make during 2014 will enable us to capitalize on growth opportunities over the long-term.”

Revenue for the Calvin Klein’s North American business increased 3 percent, driven by an additional ten days of operations for the businesses acquired with Warnaco on February 13, 2013, along with modest growth in both the wholesale and retail businesses. The company’s North America retail comparable store sales were flat. The Calvin Klein international business, which is principally comprised of the Asia, Europe and Brazil businesses acquired with Warnaco, posted revenue an increase of 6 percent on a non-GAAP basis. The company’s international retail comparable store sales declined 5 percent, primarily driven by the ongoing transitioning of the Europe jeans business and the absence of the Chinese New Year holiday in the first quarter of 2014. Earnings before interest and taxes on a non-GAAP basis for the Calvin Klein business was 82 million dollars as compared to 106 million dollars in the prior year’s first quarter. GAAP earnings before interest and taxes for the Calvin Klein business was 74 million dollars as compared to a loss of 24 million dollars in the prior year’s first quarter.

Revenue in the Tommy Hilfiger North America business increased 5 percent, due principally to low single-digit wholesale growth, 2 percent retail comparable store sales growth and retail square footage expansion. Revenue in the Tommy Hilfiger International business increased 8 percent over the prior year, driven by 6 percent comparable store sales growth in Europe and square footage expansion in the company’s own retail stores. Earnings before interest and taxes for the Tommy Hilfiger business decreased 2 percent to 115 million dollars from 118 million dollars in the prior year’s first quarter.

Revenue for the Heritage Brands businesses saw a 2 percent decrease compared to the prior year period. Including the Bass revenue in 2013, revenue decreased 11 percent. Earnings before interest and taxes for the Heritage Brands business was 29 million dollars on a non-GAAP basis, as compared to 39 million dollars in the prior year’s first quarter.

For the full year, earnings per share is currently projected to be in a range of 7.30 dollars to 7.40 dollars on a non-GAAP basis, as compared to 7.03 dollars in 2013, or an increase of 4 percent to 5 percent. Second half earnings per share on a non-GAAP basis is expected to increase approximately 20 percent, with the majority of the growth expected in the fourth quarter. Revenue is currently projected to increase to approximately 8.5 billion dollars, an increase of approximately 5 percent compared to the prior year amount excluding revenue of 176 million dollars related to the Bass business. Including Bass revenue in 2013, the revenue increase is expected to be approximately 3 percent over the prior year.

It is currently projected that revenue for the Tommy Hilfigerbusiness will increase approximately 7 percent and revenue for the Calvin Klein business is currently expected to increase approximately 4 percent. Revenue for the Heritage Brands business is currently projected to increase approximately 4 percent excluding revenue attributable to Bass, and decrease approximately 6 percent including the Bass revenue.

Earnings per share for the second quarter is currently projected to be in a range of 1.40 dollars to 1.45 dollars on a non-GAAP basis, as compared to 1.39 dollars in the prior year’s second quarter. Revenue in the second quarter is currently expected to be approximately 2 billion dollars, an increase of approximately 4 percent compared to the prior year amount excluding revenue of 62 million dollars related to the Bass business. Including Bass revenue in 2013, the revenue increase is expected to be approximately 1 percent over the prior year amount of 1.965 billion dollars. It is currently projected that revenue for the Tommy Hilfiger business in the second quarter will increase approximately 9 percent and revenue for the Calvin Klein business in the second quarter is currently expected to be relatively flat to the prior year. Revenue for the Heritage Brands business in the second quarter is currently expected to increase approximately 2 percent excluding revenue attributable to Bass, and decrease approximately 11 percent including the Bass revenue.