PVH Q2 earnings rally despite sales declines on lacklustre international market

PVH Corp. said on Tuesday revenues decreased 6% to $2.074 billion in the second quarter, hurt by dwindling sales in the U.S. company’s overseas markets, especially in Asia Pacific.

The owner of Calvin Klein and Tommy Hilfiger brands said second-quarter revenues were adversely impacted by a “challenging consumer environment” in Asia Pacific, particularly in China and Australia, coupled with the New York-based company’s planned reduction in sales in Europe “to drive overall higher quality of sales in the region,” according to a press release.

In North America, revenue in the Tommy Hilfiger and Calvin Klein businesses combined increased 1%, compared to the prior year period, with modest growth in the wholesale business and a low single-digit decline in the direct-to-consumer business.

Despite the sales decline globally, PVH net income grew to $158 million during the three months, compared to net income of $94.2 million, last year. Earnings per share were $2.80, compared to $1.50 in the prior-year period. 

“We delivered on our top- and bottom-line commitments and beat our earnings guidance for the second quarter, led by our disciplined execution of the PVH+ Plan. For both Calvin Klein and Tommy Hilfiger, we drove strong consumer engagement and 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,”​​ said Stefan Larsson, chief executive officer, PVH.

“Step by step, we continue to build strength in product, consumer engagement and marketplace execution, supported by the build out of our data and demand-driven supply chain. North America continues to be a strong proof point, in Europe we are on plan with our targeted quality of sales initiatives, and in Asia Pacific, we continue to drive strong brand engagement to win the big consumer moments. Looking ahead, as we navigate an increasingly challenging global macroeconomic backdrop, we remain relentlessly focused on delivering brand-accretive, long-term growth.”

Looking ahead, PVH reaffirmed its projected full-year sales decrease of 6% to 7%, as compared to 2023, inclusive of a 2% reduction resulting from the sale of the Heritage Brands women’s intimates business and a 1% reduction from the 53rd week in 2023. The company’s EPS forecast improved to be in a range of $11.20 to $11.45, compared to $10.76 in 2023. Previous guidance was a range of $11.15 to $11.40.