PVH SIGNIFICANTLY INCREASES ITS FISCAL 2016 EARNINGS GUIDANCE
PVH Corp., the owner of Calvin Klein and Heritage Brands, has upped its fiscal 2016 earnings guidance significantly. In reporting its second quarter results, the New York-based company now projects that 2016 earnings per share on a GAAP basis will be in a range of $7.50 to $7.60, compared to $6.89 in the prior year period.
“Looking ahead to the remainder of 2016, we are increasing our earnings guidance for the year, while continuing to take a prudent approach to planning our business, as we expect the macroeconomic and geopolitical volatility around the world to continue to impact the consumer,” said Emanuel Chirico (pictured), chairman and CEO. “We believe our proven business model and talented associates will enable us to execute our strategic initiatives in an ever-changing retail environment and deliver stockholder value.”
Overall for the company’s second quarter, PVH’s revenue increased 4 percent on a GAAP basis to $1.93 billion compared to the prior year period, although its EPS on a GAAP basis was $1.11 compared to $1.22 in the prior year period. Revenue in the Calvin Klein business for the quarter increased 12 percent to $726 million on a GAAP basis compared to the prior year period. The division’s North America revenue increased 11 percent to $398 million on a GAAP basis compared to the prior year period primarily driven by continued healthy performance across the North America wholesale businesses. Revenue in the Tommy Hilfiger business for the quarter increased 6 percent to $860 million on a GAAP basis compared to the prior year period, while Tommy Hilfiger North America revenue increased 3 percent to $407 million on a GAAP basis.
On the minus side, revenue in the Heritage Brands business for the quarter decreased 14 percent to $347 million compared to the prior year period, principally resulting from the rationalization initiatives implemented in 2015 that will continue to impact the business throughout 2016, consisting of the exit from the Izod retail business and the discontinuation of several licensed product lines in the dress furnishings business.
“Our strong performance year to date exceeded our expectations and demonstrated our ability to deliver against our 2016 plan, despite the challenging macroeconomic environment,” said Chirico. “Our strong first half results allow us to continue to reinvest in our brands and the business. We are excited by the marketing investments and commercial initiatives each of our brands are launching over the next six months, including our creative team leadership change at Calvin Klein.”
As previously reported by MR, Raf Simons will lead the creative strategy of the Calvin Klein brand globally across the Calvin Klein Collection, Calvin Klein Platinum, Calvin Klein, Calvin Klein Jeans, Calvin Klein Underwear and Calvin Klein Home brands. As part of his role as chief creative officer, Simons will oversee all aspects of design, global marketing and communications, and visual creative services. Simons’ first collections will debut for the Fall 2017 season.