PVH Corp. has reported a successful first quarter due to Calvin Klein and Tommy Hilfiger businesses outperformed revenue expectations. Revenue increased 3 percent on a constant currency basis compared to the prior year’s first quarter revenue of $1.88 billion.
Revenue in the Calvin Klein business for the quarter increased 13 percent on a constant currency basis from $654 million in the prior year’s first quarter. Calvin Klein North America revenue increased 14 percent on a constant currency basis compared to $339 million in the first quarter of 2015 primarily driven by growth of over 20 percent in the North America wholesale business due to strong performance in all businesses, particularly underwear.
Revenue in the Tommy Hilfiger business for the quarter increased 4 percent on a constant currency basis from $767 million in the prior year’s first quarter. Tommy Hilfiger North America revenue decreased 5 percent on both a constant currency and a GAAP basis compared to $354 million in the first quarter of 2015, due principally to continued softness in the retail business.
“We are very pleased with our first quarter 2016 results, which exceeded our expectations despite the difficult retail environment experienced in the U.S. market,” said Emanuel Chirico, chairman and CEO. “Our Calvin Klein and Tommy Hilfiger businesses were the highlight, with significant strength demonstrated by our international businesses. Out-performance 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.”
Revenue in the Heritage Brands business for the quarter decreased 12 percent from $458 million in the prior year’s first quarter, driven by the ongoing rationalization of the Heritage Brands business, including the exit from the Izod retail business and the discontinuation of several licensed product lines in the dress furnishings business, partially offset by a 12 percent increase in comparable store sales in the Van Heusen business.
Chirico continued, “Looking ahead to the remainder of 2016, we are increasing our earnings guidance on a non-GAAP basis for the year, while continuing to take a prudent approach to planning our business, as foreign currency and global consumer spending remain unpredictable and the U.S. retail market is increasingly volatile and promotional. We remain focused on the strategic opportunities recently announced, including the acquisition of the 55 percent interest in our Tommy Hilfiger China joint venture that we did not previously own, the formation of a joint venture in Mexico for all of our brands and the licensing of our Tommy Hilfiger wholesale womenswear businesses in the U.S. and Canada to G-III.”