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PVH Raises Outlook Despite Heritage Brands Decline; Tilly’s Turns

Hilfiger Denim Fall 2016
Photo: Courtesy of Tommy Hilfiger

PVH Corp.

Weak traffic and consumer spending trends in key tourist haunts plagued Calvin Klein and Tommy Hilfiger U.S. stores in the second quarter, and same-store sales declined by 4 percent and 7 percent respectively as a result. But thanks to both brands’ healthy American wholesale businesses, their North America revenue still rose: for Calvin Klein, by 11 percent to $398 million, while Tommy Hilfiger increased 3 percent to $407 million. Their international arms achieved double-digit growth, too, pushing total Calvin Klein revenue to $726.4 million and Tommy Hilfiger to $860.2 million.

Despite a 14 percent decrease in revenue in parent PVH Corp.’s (PVH) Heritage Brands business, the New York-based company’s total revenue increased from $1.86 billion to $1.93 billion in the three months ended July 30. Though Q2 profits fell to $90.5 million or $1.11 per diluted share, PVH now projects that full-year earnings per share will be in the range of $7.50 to $7.60, up from a previous range of $6.45 to $6.55.

Tilly’s

Teen retailer Tilly’s (TLYS) turned a corner in the second quarter of its fiscal year, recording a 0.9% increase in comparable store sales (including e-commerce) in the three months ended July 30. Total net sales rose 5 percent over last year to reach $136.4 million, up from $130 million. In addition, the Irvine, California-based retailer said it ended the quarter with inventory down 7 percent on a per square foot basis. Net income increased $1.4 million or 5 cents per diluted share, compared to $0.6 million or 2 cents per diluted share a year ago. Tilly’s said it now expects same-store sales to be flat to down 4 percent in the current quarter, thanks to mixed back-to-school results, and earnings per share results to be between 7 cents and 13 cents.

Express

Specialty retailer Express (EXPR) struggled in the second quarter, posting an 8 percent decrease in comparable sales (including e-commerce) compared with a 7 percent increase a year ago. Net sales declined 6 percent to $504.8 million, down from $535.6 million, while online sales dropped 7 percent to $70.1 million. President and CEO David Kornberg blamed the poor performance on “a lack of clarity across the assortment,” which almost halved profits in Q2 from $21 million a year ago to $10.1 million. The company’s stock plunged by more than 25 percent Wednesday.