Calvin Klein and Tommy Hilfiger’s parent company, PVH Corp., maintained its upward trend with better than expected Q4 earnings and sales results. The company exceeded guidance, hitting $1.26 (GAAP basis).
“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, PVH chairman and CEO. “We continued to demonstrate strong momentum in our Calvin Klein and Tommy Hilfiger businesses.”
Sales for Calvin Klein dipped one percent in the quarter to $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.
Calvin Klein North America revenue decreased 11 percent to $409 million, in part by the Mexico deconsolidation. The company also noted that the prior year had also benefited from the expansion of the brand’s wholesale underwear business.
Calvin Klein’s international revenue, however, increased 11 percent to $385 million. Strong business in Europe and China helped drive comparable store sales up 6 percent.
Tommy Hilfiger’s North America sales dipped 4 percent to $419 million compared to the prior year period, while the brand’s international business increased 10 percent to $513 million. The international increase was the result of a 7 percent bump in comparable store sales and the April 2016 acquisition of the 55 percent interest in the company’s former joint venture of Tommy Hilfiger in China. Overall, Tommy Hilfiger’s Q4 business increased 4 percent to $932 million compared to the prior year period.
Looking forward, revenue for 2017 is expected to increase approximately 2 percent as compared to 2016. Calvin Klein business for fiscal year 2017 is projected to grow 5 percent, while the Tommy Hilfiger business is expected to increase 1 percent.
“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,” Chirico said. “We believe that our brands, led by Calvin Klein and Tommy Hilfiger, continue to resonate with consumers and position us well in the marketplace against our competition.”