The Calvin Klein Owner Bounces Back to Typical Financial Rhythm, Increases Yearly Earnings Forecast
PVH Corp., the parent company of Tommy Hilfiger and Calvin Klein, is gradually recovering to its usual rhythm after a disappointing outlook for the year it presented in April. The corporation exceeded expectations for the first quarter and has increased its earnings forecast for the year.
CEO said during an interview, “What you see in Q1 and overtime from us is that we keep executing our plan. We delivered on the first quarter, we keep delivering on our plan and we keep building execution momentum.”
PVH, under the leadership of CEO Stefan Larsson, has transitioned from bringing in new businesses to focusing on brand building, especially with Tommy Hilfiger and Calvin Klein. This shift has altered not just how the company works but also the people responsible for this transformation.
Martijn Hagman, CEO of Tommy Hilfiger Global and PVH Europe, plans to leave the company but will remain in an advisory role for a smooth transition. Lea Rytz Goldman, Tommy Hilfiger Global president, now leads the brand and answers directly to Larsson. David Savman, PVH’s chief supply chain officer, will temporarily step in as CEO of the European business until a long-term replacement is discovered.
Larsson expressed gratitude for Hagman’s role, stating in an announcement,
I want to thank Martijn for his significant contributions to PVH over the past 16 years, being a key leader in helping to build our European region into the market-leading and highly profitable multi-brand business we have today.
Alongside these changes, PVH also announced it’s reviving its Calvin Klein Collection business after five years under creative director Veronica Leoni. Among other strategies, the company plans on reduction of inventory, building a “demand-driven supply chain,” and more high-wattage marketing.
Despite disappointing investors with its earlier outlook, the current scenario appears brighter. PVH’s first-quarter net income elevated by 11.3 percent to $151.4 million. Adjusted earnings per share amounted to $2.45, exceeding the $2.16 predicted by Yahoo Finance.
Sales in Europe affected revenues for the first quarter, but PVH still managed to exceed predictions by $20 million, despite a 9.5 percent decline in revenues. For the entire year, though PVH reaffirmed a fall of 6 percent to 7 percent in revenue, it rose its outlook for earnings per share.
In his interview, Larsson portrayed an image of PVH undergoing a necessary overhaul in Europe, simultaneously evolving swiftly to meet marketplace challenges. Larsson is optimistic about PVH’s growth strategy, saying, “The big unlock for PVH will come from us increasingly executing all the growth drivers together. That’s why I’m so excited to see the consumer engagement.”
Larsson also discussed the inspirational aspect of the company’s product strategy, stating, “It all connects because [the collection business] is the ultimate expression of the brand. It’s an opportunity to show the best of the best of Calvin.”
The quarter recorded flat sales for the Calvin Klein brand, with a 4 percent surge in North America being offset by declines overseas. Tommy Hilfiger, in the meantime, sustains its global appeal, though its revenues fell 10 percent in the first quarter due to a reset in Europe.
