PVH Corp. is tapping the brakes on its fast-growing Tommy Hilfiger and Calvin Klein businesses, projecting both to grow at slower rates than they did in 2011.
In reporting fourth-quarter and full-year results Tuesday, the company said in its guidance that 2012 revenues were projected to be flat to up 2 percent, with the latter figure translating to more than $6 billion from $5.89 billion in 2011. Those projections included an estimate that Tommy Hilfiger would also be flat to up 2 percent and that Calvin Klein would grow 5 to 7 percent, with both numbers held down by unfavorable foreign currency translation. The two designer brands generated respective growth of 15.8 percent, hitting $815.8 million, and 11.9 percent, reaching $278.5 million, in the final quarter of 2011. RELATED STORY: Tommy Hilfiger, Calvin Klein Again Lift PVH Profits >>
Addressing analysts during a Wednesday morning conference call to discuss results, Emanuel Chirico, chairman and chief executive officer of PVH, endorsed a “conservative” approach to the businesses in light of uncertain market conditions in Europe and the relative certainty of a shift in foreign exchange that would hurt sales and profits. PVH expects gross margin, which declined to 50.5 percent of revenues in the fourth quarter from 52.7 percent in the 2010 period, to grow about 100 basis points this year from the 2011 level of 51.9 percent as cost pressures ease and its mix veers towards a heavier reliance on retail.
“We didn’t have some of the headwinds last year that we have this year,” Chirico said, “the biggest one being foreign currency. But absent that, I think we’ve planned that all into our businesses and I feel about as good this year coming out of the gate for 2012 about our projections and what they may actually turn out to be as I did at this time last year.”
He emphasized that his cautious take on 2012 wasn’t motivated by difficulties in the business, with most operations exceeding plans, and that there was substantial upside potential in its guidance for full-year adjusted earnings of $6.10 to $6.20 a diluted share. For instance, he noted that comparable-store sales in PVH’s North American stores were projected to land in a range of 3 to 4 percent. “And right now, for the first two months of the year, our comps are running up 10 percent, 11 percent. So clearly that bodes well for retail performance in North America,” he said.
“Hopefully, currency, instead of becoming a headwind, might become a tailwind going forward,” Chirico said later. “So I think, clearly, we don’t feel any less optimistic about the growth trajectory both for Calvin and Tommy, and in fact we think that there is opportunity to accelerate that growth in 2013, 2014, 2015 and beyond.”
Business in Heritage Brands is expected to decline between 3 and 4 percent this year, principally due to the exit of businesses such as Timberland and Izod women’s wear, but Ken Duane, vice chairman of PVH, cited a number of initiatives that could help those businesses regain their equilibrium, including an Izod initiative with J.C. Penney beginning Sept. 1. “We’re going to pick up 400,000 square feet in opportunity there,” he said. Weakness at Izod was a major contributor to the 54.8 percent decline in the Heritage Brands unit’s operating income in the fourth quarter.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews