Calvin Klein, Tommy Hilfiger lead PVH Corp. to record revenue year
Apparel company PVH Corp. announced better-than expected results for the fourth quarter and full year thanks to continued momentum across its Calvin Klein and Tommy Hilfiger businesses, despite a small profit drop.
As a whole, PVH reported record revenue of $8.9 billion for the full year, up 9 percent compared to the prior year period, while net income fell 2 percent to $537.8 million. Earnings per share on a GAAP basis was $6.84 for 2017.
“We are very pleased with our fourth quarter and full year 2017 results, which exceeded our expectations. These results are ahead of our long-term targets, driven largely by strong momentum in our Tommy Hilfiger and Calvin Klein businesses,” commented CEO Emanuel Chirico, who equally noted recent investments in digital and consumer engagement to continue to leverage the brand power behind the company’s strongest brands.
The full-year revenue increase was primarily due to a 10 percent increase in the Calvin Klein business, driven by continued strength in Europe and China, while the business’ North American revenue saw comparable store sales decreasing 1 percent. International comparable store sales increased 6 percent.
Similarly, the Tommy Hilfiger business was another significant growth driver for the company posting an 11 percent increase compared to the prior year. Tommy Hilfiger International comparable store sales increased 8 percent, while North America comparable store sales increased 3 percent.
Revenue in the Heritage Brands business was flat compared to the prior year.
In its fourth quarter, revenue significantly increased, jumping 19 percent to $2.50 billion from $2.11 billion last year. Revenue in the Calvin Klein business for the quarter increased 23 percent to $977 million, with International revenue up 33 percent, reaching $512 million and North America revenue up 13 percent.
Revenue in the Tommy Hilfiger business for the quarter increased 22 percent to $1.1 billion. Again, both International and North American revenue increased 37 percent and 5 percent respectively.
Looking forward to the first quarter, revenue is expected to increase approximately 15 percent.
For the year ahead, PVH expects adjusted earnings of $9.00 to $9.10 per share and a revenue increase of approximately 7 percent. Revenue for the Calvin Klein business is projected to increase approximately 9 percent and Tommy Hilfiger 8 percent.
“We believe that the incredible brand power behind Calvin Klein and Tommy Hilfiger positions us well in the marketplace against our competition and will drive continued momentum, as reflected in our 2018 outlook. While we, like many other global consumer companies, will continue to face geopolitical headwinds, the power of our brands, our businesses and, most importantly, our people should drive our company forward," concluded Chirico.
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