PVH Corp. rode strong results at the Tommy Hilfiger brand to a second-quarter earnings “beat,” sending shares up more than 5 percent in after-hours trading.
The strength at Hilfiger included an 8.9 percent increase in revenues, to $870.4 million, driven by robust growth at wholesale, expansion of its retail footprint and increases in comparable-store sales in North America and abroad, resulting in an 18 percent increase in adjusted operating income. It helped offset declines in profits at the Calvin Klein unit, which continues to work through the integration of the jeans business previously operated by Warnaco, and at the Heritage Brands division, where comps declined 4 percent.
In the three months ended Aug. 3, the New York-based apparel giant’s net income was $126.5 million, or $1.52 a diluted share, versus a net loss, caused in great part by the integration of Warnaco operations, of $5.3 million, or 7 cents a diluted share. Adjusted earnings per share was $1.51, 9 cents above the Wall Street consensus view.
Revenues rose 0.5 percent to $1.98 billion from $1.96 billion in the prior-year quarter and just below the $1.99 billion expected, on average, by analysts. Gross margin translated to 53.4 percent of revenues, up from 52.2 percent in the 2013 quarter.
Investors greeted the results, issued after the close of the equity markets, with enthusiasm, sending shares up $6.07, or 5.2 percent, to $123.20 in the first hour of after-hours trading Wednesday.
Emanuel Chirico, chairman and chief executive officer of the company, said, “Despite the anticipated difficult macroeconomic environment, we successfully navigated through heightened promotional activity in North America and volatility in certain key international markets.”
PVH expects growth in adjusted EPS in excess of 15 percent in the second half of the year “as we anniversary our strategic investments in our acquired businesses, introduce our new fall Calvin Klein jeanswear product and presentations at retail and experience improving trends in our southern European business,” according to the ceo.
At Calvin Klein, revenues were up 0.6 percent to $674.6 million and operating income, on a non-GAAP basis, down 10.1 percent to $85.7 million. While North American comps rose 2 percent, the wholesale jeans business declined “as the company works to restructure the sales distribution mix by reducing off-price sales.”
At Heritage Brands, operating profit, again on a non-GAAP basis, was down slightly by more than a third to $29.5 million, and revenues declined 13 percent to $430.6 million, although they were essentially flat excluding the $62 million contributed in the 2013 quarter by G.H. Bass, sold to G-III Apparel Group Ltd. last year. The promotional climate in the moderate tier of retail was cited for compression in margins and profits.
However, Hilfiger’s results more than compensated for any weakness at the company’s two other business units. The 8.9 percent gain in revenues was essentially evenly divided between top-line growth of 8 percent in North America and 9 percent in international markets. U.S. comps were up 2 percent and international comps up 3 percent.
PVH reaffirmed its full-year guidance for adjusted EPS of $7.30 to $7.40, bracketing the current consensus estimate of $7.38, and revenues of $8.4 billion, slightly below the $8.47 billion expected by analysts.
Year-to-date net income was $161.8 million, or $1.94 a diluted share, versus a loss of $15.7 million, or 19 cents, in the first half 2013. Revenues rose 1.7 percent to $3.94 billion.
PVH will hold a conference call to discuss the results and outlook today.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty