PVH Corp. reported better-than-expected second-quarter earnings of $102.2 million on Wednesday as consumers responded favorably to Calvin Klein’s #mycalvins underwear campaign as well as its relaunched selection of men’s basics, despite a drop-off in tourist traffic at the brand’s U.S. stores.
The New York-based company, which also owns the Van Heusen and Izod brands, said that while overall sales for the quarter ended Aug. 2 were $1.86 billion—down from $1.9 billion for the same period a year ago—revenues climbed 3 percent in the Calvin Klein business and 5 percent at Tommy Hilfiger.
For the former, continued strength in Europe and growth in China helped drive sales, while the latter saw solid performance in the European business, including a 9 percent increase in comp-store sales. Heritage brands, however, declined 6 percent, for which the company blamed late wholesale shipments and the year-ago period’s added benefit of sales attributable to the launch of Izod at Kohl’s.
Second-quarter earnings were $1.37 per share on an adjusted basis, while analysts polled by Zacks Investment Research had expected $1.28 per share.
“Our second-quarter performance highlighted continued strength in our Calvin Klein business, as consumers responded well to our recent product initiatives, particularly in underwear,” Emanuel Chirico, chairman and chief executive officer, said in a statement. “Overall, our first half earnings per share, which increased 16 percent on a non-GAAP (adjusted) and constant currency basis, demonstrated our ability to deliver against our 2015 plan, while managing through the anticipated difficult global retail environment.”
Looking forward, PVH expects to generate full-year earnings of between $6.90 and $7 per share, up from its previous guidance of $6.85 to $6.95. Chirico added, “We continue to believe, however, that the strength of the U.S. dollar and the changing consumer spending patterns for international tourists in the U.S., along with the volatility in the global environment, will remain a whirlwind.”