PVH Corp.’s third-quarter results again beat the company’s expectations and Emanuel Chirico sees much growth in the company’s future.
Reporting a 4.7 percent increase in consolidated net sales to $2.22 billion for the quarter ended Oct. 29, along with a nearly doubled net income of $238.7 million compared with the year-ago period, chief executive officer Chirico was pleased with the company’s “strong performance” despite a record hurricane season that he admitted had a negative impact on business.
“We continue to over-deliver against our 2017 plan, even with the additional marketing investments we have made, driven in large part by the continued momentum across our Calvin Klein international and Tommy Hilfiger businesses and ongoing operating efficiencies across our diversified business model,” Chirico said.
Earnings before interest and taxes also grew to $281 million, compared with $198 million a year ago and earnings per share came in at $3.05, compared with expectations for the quarter topping out at $2.78.
With strong sales in the third quarter, as well as the second quarter, PVH once again upped its full-year sales guidance and expects revenues to increase 7 percent from a previous expectation of 6 percent. EPS is projected to top out at $6.82, from a previous expectation of $6.54.
Wall Street was pleased with the results and sent the company’s shares up to an all-time high of $138.94 in after-hours trading. PVH’s stock has been trending upward since the end of last year, and has been trading around $136 over the past week.
PVH gave the street every reason to support it, with increased sales and ongoing momentum at its marquee brands. Chirico noted that the fourth-quarter holiday season is off to a good start, leading to the addition of $20 million to the marketing budget for the period.
“We believe that the incredible brand power behind Calvin Klein and Tommy Hilfiger will drive continued market-share gains and allow us to capitalize on the brands’ significant growth opportunities going forward,” Chirico said.
Revenue at Calvin Klein alone increased 6 percent to $943 million during the third quarter, aided by a 20 percent increase in its international revenue to $467 million. PVH cited the brand’s “outstanding performance” in wholesale in Europe, as well as international retail. International comparable-store sales increased 9 percent.
Similarly, revenue at Tommy Hilfiger rose 10 percent to $1 billion, as international revenue grew 16 percent to $609 million. The brand is seeing continued success “across Europe,” according to PVH, along with solid results in Asia. International comp sales increased 7 percent.
But North America is still proving to be a drag for both brands. North American revenue for Calvin Klein fell 5 percent to $476 million during the quarter, while Tommy Hilfiger managed to increase sales only by 2 percent.
Chirico and other PVH executives are scheduled to host a call with financial analysts Thursday morning.
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