With consumers excited to come out of covid restrictions and adopting hybrid lifestyles, PVH Corp. saw consumers dressing for occasions in Q3 2021. The style, however, is still grounded in a casual lifestyle that fits both its Calvin Klein and Tommy Hilfiger brands, according to PVH CEO Stefan Larsson.
In the quarter, PVH saw continued strength in key essential product categories like underwear, T-shirts, polos, hoodies, active sneakers, and a rising demand for denim. “We continue to lean into the strength of our key essentials and hero products,” Larsson said in the earnings call Tuesday.
Through this work, the company saw an improvement in AURs (average unit retail) during the quarter. It also cut unproductive SKUs and relied more on data to take a more demand-driven approach to product development.
The company, however, is also navigating a millennial-driven retail landscape that calls for both new and nostalgic designs.
This quarter, Calvin Klein will release a second chapter of its collaboration with Heron Preston, spanning denim, underwear and other “wardrobe essentials.” The company anticipates a repeat of the first collab’s success. Preston’s initial April collection with Calvin Klein yielded some of the highest AUR and average order retail the brand has ever seen.
Looking ahead, Larsson said the brand will continue to build out its collaboration strategy, “connecting the iconic strength of Calvin Klein with creators and brands from around the world to express their unique perspective of the brand.” This includes the second installment of its underwear collaboration with Kith, which has helped Calvin Klein tap into the spending power of Gen Z consumers.
Throwback designs are where Tommy Hilfiger is finding its groove.
“As we focus on Tommy Jean’s growth potential with younger consumers, we continue to drive brand heat through successful capsules,” Larsson said. A strong push for nostalgic products—including licensed T-shirt and sweatshirt products featuring millennial musicians like TLC and Britney Spears and characters SpongeBob SquarePants, have driven strong engagement and sell-throughs, he added.
The brand also launched collaborations that amplified its efforts to increase opportunities and visibility for underrepresented communities within the fashion and apparel industries. In July, Tommy Hilfiger launched the first collaboration with a non-gendered capsule featuring Indya Moore, Larsson noted. The brand also launched a capsule with emerging Brooklyn designer Romeo Hunte, following his mentorship with Tommy Hilfiger. In the capsule, Hunt reinvented Tommy classics like colorful puffer coats, colorblocked trench coats and oxford shirts.
In general, Larsson said “purpose-oriented” products continue to resonate with consumers.
He added that more than 50 percent of the global pre-fall collection was sustainable—an achievement that falls in line with the heritage brand’s pledge for more circular and sustainable designs. By 2025, 50 percent of the brand’s denim pieces will use lower-impact fabrics.
These wins are leading PVH to project a 27 percent to 28 percent revenue increase in 2021 compared to 2020.
“Our increased focus on winning with the consumer through our two global power brands, Calvin Klein and Tommy Hilfiger, is driving results,” Larsson said. “We’re still early days in building our next growth chapter, and I continue to be very optimistic for the future as we lean further into our accelerated recovery priorities, leveraging our core strength, and continuously following the consumer to position PVH for sustainable long-term profitable growth.”