PVH Corp, parent company to brands like Tommy Hilfiger and Calvin Klein, reported a first quarter revenue increase of 4 percent to $2 billion.
First quarter EPS surpassed guidance, reporting a GAAP basis of $0.89 compared to guidance of $0.73 to $0.75, however dropped compared to $2.83 last year.
Calvin Klein saw a revenue increase of 5 percent to $756 million compared to the year before, which includes the Mexico deconsolidation of around $15 million in November of last year. Calvin Klein’s international revenue grew 11 percent to $380 million with help from Europe and China. However, North American revenue fell 1 percent to $375 million, mostly due to the Mexico deconsolidation and a 5 percent dip in North American comparable store sales.
Earnings for Calvin Klein increased on a GAAP basis to $93 million, up from $90 million during the same period the year before.
“We continue to experience strong momentum in our Calvin Klein and Tommy Hilfiger businesses, which allowed us to exceed both our sales and earnings guidance for the first quarter despite the volatile macroeconomic environment and the highly promotional retail market in the U.S.,” said CEO Emanuel Chirico.
Tommy Hilfiger saw a revenue increase of 6 percent to $42 million, with an international revenue increase of 15 percent to $524 million due in part by high performance across markets in Europe, as well as a full quarter revenue from the China business due to the acquisition of the 55 percent interest in the former Tommy Hilfiger joint venture in China in April 2016.
Tommy Hilfiger’s North American revenue fell 5 percent to $318 million, mostly due to a discontinuation of the company’s directly operated womenswear wholesale business in the fourth quarter of 2016.
The brand reported earnings on a GAAP basis for the quarter of $33 million, down considerably from $206 million during the same period the year prior. However, this was mostly due to the deal with China’s Li & Fung to reorganize PVH’s supply chain in the country, as well as the $7 million cost to move the Tommy Hilfiger office in New York during the first quarter of 2017.
“Our first quarter performance underscored the power of our diversified business model and the strength in our international businesses. We believe that our brands, led by Calvin Klein and Tommy Hilfiger, continue to resonate with consumers and are gaining market share against our competition,” he said.
PVH Corp’s Heritage Brands saw a revenue decrease of 3 percent to $391 million, and an increase in earnings on a GAAP basis for the first quarter of $32 million, compared to $30 million during the same period the year prior.
“We are pleased to increase our earnings guidance for the year despite the volatility that continues to persist in the macroeconomic environment. We expect that our best-in-class management teams, together with our proven business model, will continue to drive the execution of our strategic initiatives in an ever-changing environment.”
PVH Corp’s guidance expects a negative impact of $0.35 per share. The company projects 2017 earnings per share on a GAAP basis around $2.64 to $6.34, compared to $6.79 the year prior. The company expects revenue to increase 3 percent in 2017.