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Calvin Klein Underwear Sales Boost PVH Q4 Profit

Brand owner PVH Corp. revealed Wednesday that revenue for its Calvin Klein North America division increased 15 percent on a GAAP basis, up from $388.6 million to $459.9 million in the fourth quarter, due to continued strength in underwear.

Meanwhile, quarterly revenue in the brand’s overall business increased 21 percent on a constant currency basis, rising from $702.7 million to $806 million, driven by growth of more than 20 percent in its North American wholesale business, as well as a strong performance in Europe and China.

PVH, which also owns Tommy Hilfiger, Izod and Van Heusen, among others, posted earnings per share of $1.63 in the fourth quarter, compared with $0.62 per share for the year-ago period. Revenue increased 2 percent from $2.07 billion to $2.11 billion.

However, Tommy Hilfiger revenue declined by 2 percent in the fourth quarter, from $919.4 million to $904.1 million. PVH said wholesale growth in North America was offset by a weak retail business, as comparable store sales slipped 7 percent due to slow traffic and spending trends in key tourist locations. And while the company said the brand performed well in most European markets, experiencing a 10 percent in retail comps, international revenue fell 2 percent.

In addition, revenue in the Heritage Brands division decreased 10 percent from $446.7 million to $402.4 million. PVH said this was primarily due to the continued rationalization of the business, including the exit from the Izod retail businesses and the discontinuation of several licensed product lines in the dress furnishings business, partially offset by an 8 percent increase in comps in the Van Heusen retail business.

“While the global retail landscape continues to be uncertain with major foreign currencies largely weakening against the U.S. dollar and unpredictable and volatile global consumer spending, we believe that we can successfully navigate this environment and have taken a prudent approach to our 2016 plan,” Emanuel Chirico, chairman and chief executive officer, said in a statement.

PVH said it expects fiscal 2016 earnings per share to be a range of $6.30 to $6.50 on a non-GAAP basis (which includes a negative impact per share of around $1.60, related to foreign currency exchange rates). The company is also projecting a 1 percent increase in revenue on a GAAP basis, boosted by a continued strengthening in Calvin Klein.