Calvin Klein helped push PVH Corp. into overdrive last year — which was topped off with a 161 percent gain in fourth-quarter profits — but chairman and chief executive officer Emanuel Chirico is taking a cautious, yet confident tack heading into 2016.
“While the global retail landscape continues to be uncertain with major foreign currencies largely weakening against the U.S. dollar and unpredictable and volatile global consumer spending, we believe that we can successfully navigate this environment and have taken a prudent approach to our 2016 plan,” Chirico said.
The company’s fourth-quarter net profits shot up to $134.2 million, or $1.63 a diluted share, from $51.5 million, or 62 cents, a year earlier. Revenues for the three months ended Jan. 31 gained 2.1 percent to $2.11 billion from $2.07 billion.
Adjusted earnings of $1.52 came in 6 cents ahead of the $1.46 analysts projected and sales also topped expectations, driving the stock up 3.6 percent to $90.80 in after-hours trading.
For the full year, PVH’s earnings rose 30.4 percent to $572.4 million, or $6.89 a diluted share, from $439 million, or $5.27, in 2014. Revenues slipped 2.7 percent to $8.02 billion from $8.24 billion. In a show of strength, PVH repaid $350 million in debt and repurchased $126 million in stock last year.
“Our Calvin Klein business was a highlight, as investments we made over the last few years continued to generate solid results, and we saw strength across all regions where we operate,” Chirico said. “Our Tommy Hilfiger business also saw positive momentum in its international markets, highlighting the power of the brand. Lastly, our Heritage Brands business produced a notable improvement in profitability.”
This year, PVH is looking for adjusted earnings of $6.30 to $6.50, which reflects a negative impact of $1.60 related to foreign currency exchange. Analysts were looking for earnings of $6.57.
Chirico said: “We are committed to delivering stockholder value and our recent announcements demonstrate our belief in taking strategic actions and making investments to support the long-term growth potential of PVH and our businesses. More specifically, we announced that we will acquire the remaining 55 percent stake in our Tommy Hilfiger China joint venture, providing us with the opportunity to further strengthen our market position in China, and that we will leverage G-III Apparel Group’s women’s wear expertise by licensing them our Tommy Hilfiger women’s wear North America wholesale business, which will help drive the business beginning with the 2016 holiday season.”