Tommy Hilfiger and Calvin Klein parent PVH Corp. raises profit outlook despite 'continued tough macroeconomic backdrop'

By Bill Peters

Executives say firmer pricing helped results, even as the broader demand backdrop for clothing remains difficult

PVH Corp., the company behind Tommy Hilfiger and Calvin Klein, raised its profit outlook for the full year on Tuesday despite weaker quarterly sales, saying it was confident in its longer-term plans to grow sales and profit in North America and abroad.

The company said it expected an adjusted full-year profit of $11 to $11.25 a share, up from a prior forecast of $10.75 to $11. PVH (PVH) stuck with its outlook for a 6% to 7% drop in sales for its full fiscal year.

For its first quarter, PVH reported net income of $151.4 million, or $2.59 a share, compared with $136 million, or $2.14 a share, in the same quarter last year.

Adjusted earnings per share were $2.45. Revenue fell 10% to $1.952 billion.

Analysts polled by FactSet expected PVH to report adjusted earnings per share of $2.17 on $1.93 billion in sales.

Executives said firmer pricing helped the results, even as the broader demand backdrop for clothing remained difficult.

"Although we are still early in our journey to build Calvin Klein and Tommy Hilfiger into the most desirable lifestyle brands in the world, we are already creating some of the highest consumer engagement in the history of our brands," Chief Executive Stefan Larsson said in a statement.

Chief Financial Officer Zac Coughlin, however, noted a "continued tough macroeconomic backdrop globally."

Shares slipped 2.3% higher after hours.

When PVH reported results in April, executives warned of a "tougher macroeconomic backdrop" for clothing demand, particularly in Europe, as higher prices for basic necessities keep people from buying apparel. Retailers, in turn, have been more cautious about loading up their shelves with new product.

The company has doubled down on its biggest global brands - Tommy Hilfiger and Calvin Klein - while offloading smaller ones, put more focus on growing in Asia and brought aboard new executives.

PVH Corp. on Tuesday also said that Martijn Hagman, CEO of Tommy Hilfiger Global and PVH Europe, will be leaving the company.

-Bill Peters

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06-04-24 2020ET

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