Sales drop for Calvin Klein's parent PVH amid 'challenging' environment in Asia
By Claudia Assis
However, PVH says it sold more of its apparel at full price in the last quarter
Shares of PVH Corp. fell nearly 8% in the extended session Tuesday after the parent company of Calvin Klein and Tommy Hilfiger reported a better-than-expected second quarter, but said that its business environment in the all-important Asia Pacific region has faced challenges.
Both the Calvin Klein and Tommy Hilfiger brands saw "strong consumer engagement," and PVH "continued to increase product strength and improve newness in our assortment, leading to more full-priced selling and less end-of-season clearance sales, which fueled significant gross margin expansion," Chief Executive Stefan Larsson said in a statement.
PVH (PVH) earned $158 million, or $2.80 a share, in the quarter, compared with $94.2 million, or $1.50 a share, in the prior-year period.
Adjusted for one-time items, PVH earned $3.01 a share, which topped FactSet consensus of $2.29 a share.
Sales dropped 6% to $2.074 billion, in line with company guidance and with FactSet expectations.
PVH's international businesses saw a revenue drop of 4%, due mostly to "the challenging consumer environment in Asia Pacific, particularly in China and Australia," and the continuation of the company's planned "strategic reduction" in European sales.
In North America, revenue in the Tommy Hilfiger and Calvin Klein businesses combined increased 1%, thanks to "modest" growth in the wholesale business and a low-single-digit decline in the direct-to-consumer business, the company said.
For the full year, PVH guided for adjusted per-share earnings between $11.55 and $11.80, compared with a previous guidance of between $11.00 and $11.25. It kept its 2024 revenue guidance of a drop between 6% and 7% as compared with 2023.
For the current quarter, the company guided for adjusted EPS of about $2.50 a share on a projected sales decline of 6% to 7% as compared to the third quarter of 2023.
Shares of PVH have dropped nearly 15% so far this year, contrasting with gains of about 18% for the S&P 500 index SPX.
-Claudia Assis
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08-27-24 2030ET
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