PVH Corp. posted positive results for Q1 2016, driven by a strong performance in the key markets of Europe and China.
The company posted earnings of $1.50, excluding items, exceeding previous guidance of $1.40 to $1.45. This growth was 33 percent compared to Q1 for the prior year, on a constant currency basis. The company raised full year 2016 EPS guidance to $6.45 to $6.55 on a non-GAAP basis. Previous guidance was $6.30 to $6.50.
The strongest performance came from the Calvin Klein business, with revenue for the quarter increasing 13 percent on a constant currency basis from $654 million in the prior year’s first quarter. The brand grew 20 percent in the North America wholesale business due to strong performance in all categories, particularly underwear.
Revenue for Tommy Hilfiger increased 4 percent on a constant basis, from $767 million in the prior year’s first quarter. Revenue in North America decreased five percent, while international business was up 11 percent, driven by strength in Europe and the 55 percent acquisition in TH Asia, the company’s joint venture for Tommy Hilfiger in China.
Emanuel Chirico, chairman and CEO, said, “Our Calvin Klein and Tommy Hilfiger businesses were the highlight, with significant strength demonstrated by our international businesses. Outperformance in Europe and China further demonstrated the power of our brands in key markets and their ability to post growth against a challenging macroeconomic environment.”
Chirico said that the company will continue to focus on strategic opportunities, including the acquisition of the 55 percent interest in Tommy Hilfiger China joint venture, the formation of a joint venture in Mexico for all of the company’s brands and the licensing of Tommy Hilfiger wholesale womenswear businesses in the U.S. and Canada to GIII.