PVH Corp Q1 earnings dive; Calvin Klein, Tommy Hilfiger comps slip in North America
today May 30, 2019
PVH Corp. on Wednesday reported a profit decline for the first quarter 2019, as North America comparable sales fell across both its Calvin Klein and Tommy Hilfiger brands, sending its shares down 12% after hours.
The New York-based company said total sales increased 2% for the three months ending May 5, to $2.36 billion from $2.31 billion. On a constant currency basis, revenues rose 6 percent.
The U.S. company’s Tommy Hilfiger brand revenues lifted 4% to $1.1 billion in the quarter (or 9% in constant currencies), offsetting flat Calvin Klein sales at $890 million (or a 4% increase in constant currencies). Revenue in the Heritage Brands business for the quarter increased 1% to $415 million.
However, the increasing pressure from the U.S.-China trade dispute and a low U.S. tourist spend hurt by the strong U.S. dollar was felt during the period. PVH Corp. said comparable sales across both its Tommy Hilfiger and Calvin Klein brands declined in North America, registering a dive of 4% and 5%, respectively.
"While the global retail environment was challenging, the power of our diversified business model and the strength of our brands, global platforms and teams drove our businesses forward," said PVH Corp. chairman and CEO, Emanuel Chirico.
PVH’s first-quarter net income fell to $82 million, or $1.08 a diluted share, from $179.4 million, or $2.29, a year earlier. However, adjusted earnings were $2.46 a share, besting the company's expectations of $2.40 to $2.45 for the quarter.
"Looking ahead, the volatile and challenging macroeconomic backdrop has continued into the second quarter, with particular softness across the U.S. and China retail landscape," added Chirico.
As a result of its lacklustre earnings in the first quarter, PVH Corp cut its 2019 profit forecast by 10 cents a share. It now expects 2019 adjusted profit between $10.20 and $10.30 per share.
Wall Street was expecting $10.42 per share, on average, according to Reuters.
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