by Brian Lipton

Calvin KleinNew York-based PVH Corporation, the owner of such brands as Calvin Klein and Tommy Hilfiger, has reported its third quarter results.

On a non-GAAP basis, third quarter earnings were $2.60 per share, which exceeded previous guidance of $2.35 to $2.40 per share.

Overall, revenue increased 4 percent over last year (on a constant currency basis). The company’s Calvin Klein business was up 13 percent, driven by significant Europe, China and the North America wholesale business. The Tommy Hilfiger brand saw a 6 percent increase in revenue, primarily due to European growth; while the Heritage Brands business posted an 11 percent decrease. While North American comparable store sales were down substantially in both the Calvin Klein and Tommy Hilfiger brands, Van Heusen reported a 9 percent increase in comparable store sales.

Meanwhile, “We are very pleased with our strong performance in the third quarter despite the volatile macroeconomic environment,” said Emanuel Chirico, the company’s chairman and CEO. “We continue to deliver against our 2016 plan, but we are continuing to take a prudent approach to planning the holiday season in light of both the macroeconomic and geopolitical volatility around the world, as well as the strengthening dollar in the wake of the U.S. Presidential election.”

Looking ahead, the company did lower its fourth quarter guidance to a range of $1.13 to $1.18 per share, as opposed to $1.52 per share last year, because of a change in a foreign currency exchange rates due to the strength of the U.S dollar, as well as an increase expense of $25 million related to marketing and investments associated with the new creative team leadership of the Calvin Klein brand, led by Raf Simons.  Full year guidance on a non-GAAP basis, however, was raised to a range to range of $6.70 to $6.75.

Finally, in related news, PVH and Grupo Axo announced today the closing of its previously announced agreement to form a joint venture that now licenses from wholly owned subsidiaries of PVH the rights to operate and manage the distribution of Calvin Klein, Tommy Hilfiger, Warner’s, Olga and Speedo brand products in Mexico. The company expects this transaction to be neutral to PVH’s 2016 earnings.