New York-based PVH Corp. has seen its stock rise over 8 percent in early morning trading, having announced fourth quarter and full year 2016 results, as well as released its fiscal guidance for 2017.
The company’s fourth quarter revenue of $2.1 billion was flat compared to the prior year period; however, earnings per share came in above expectations at $1.23 on a non-GAAP basis. Revenue in the Calvin Klein business for the quarter decreased 1 percent $795 million, which includes a reduction of approximately $25 million resulting from the November 2016 deconsolidation of the Company’s subsidiary that principally operated and managed its Calvin Klein business in Mexico, as well as weakened overall revenue in the North American sector.
Revenue in the Tommy Hilfiger business for the quarter increased 3 percent to $932 million compared to the prior year period, benefitting from strong international growth. However, Tommy Hilfiger North America revenue decreased 4 percent to $419 million compared to the prior year period. Meanwhile, revenue in the Heritage Brands business for the quarter decreased 5 percent to $381 million compared to the prior year period, principally resulting from the discontinuation of several licensed product lines in the dress furnishings business
“We are very pleased with our fourth quarter results, which exceeded both our sales and earnings guidance despite the volatile macroeconomic environment and the highly promotional retail market in the U.S,” said Emanuel Chirico, chairman and CEO. “We continued to demonstrate strong momentum in our Calvin Klein and Tommy Hilfiger businesses.”
For the fiscal year, earnings per share also exceeded guidance at $6.80 per share on a non-GAAP basis, but we down from $7.05 in the prior year. Revenue for 2016 increased 2 percent to $8.2 billion compared to the prior year. The revenue change was due to a 7 percent increase in the Calvin Klein business and a 4 percent increase in the Tommy Hilfiger business, offset by a 10 percent decrease in the Heritage Business.
Added Chirico: “Our 2016 results demonstrate our strong execution and our continued commitment to invest in our brands and global operating platforms. Succeeding in the current business environment has required us to embrace change and implement new initiatives to ensure that our business model is positioned for future success. We empowered our teams to think creatively, capitalize on new product and business opportunities and find innovative ways to engage consumers, while exercising sustainable business practices.”
For fiscal 2017, PVH is predicting earnings per share on a non-GAAP basis of $7.30 to $7.40 (full year) and $1.58 to $1.60 (first quarter), which includes an expected negative impact related to foreign currency exchange rates of $0.40 per share (full year) and $0.10 per share (first quarter). Revenue is expected to increase by 2 percent during the year, In addition, the company has authorized a $750 million increase and extension to June 2020 of the Company’s stock repurchase program.
“We continue to take a prudent approach to planning our 2017 business in light of the macroeconomic and geopolitical volatility around the world, the uncertain global retail landscape, as well as the strengthening U.S. dollar,” said Chirico. “We believe that our best-in-class teams will continue to manage through the volatility by leveraging our powerful platforms and operations, while not losing sight of our long-term vision. Our recent announcement of the agreement to acquire True&Co. illustrates our commitment to driving innovation across our businesses, as we look to leverage data and consumer insights to drive our business. We expect that our proven business model and talented associates will continue to drive the execution of our strategic initiatives in an ever-changing environment while delivering stockholder value.”