Stefan Larsson came to the helm of PVH Corp. in the midst of a storm, but the chief executive officer is steering the company back to growth — although that could be a slow process in its home market of North America.
PVH’s fourth-quarter losses narrowed to $57.7 million, or 81 cents a diluted share, from $67.4 million, or 93 cents, a year earlier. Adjusted losses per share came in at 38 cents, 4 cents worse than the 34 cent loss analysts projected on average.
Revenues for the quarter ended Jan. 31 fell 19.6 percent to $2.1 billion from $2.6 billion. Sales at the company’s Tommy Hilfiger business fell 16 percent, including a 28 percent drop in North America, while Calvin Klein declined 17 percent, with a 25 percent drop in North America.
But sales through digital channels grew 57 percent.
Larsson said: “We delivered fourth-quarter revenue in line with expectations despite more extensive lockdowns in Europe, as we successfully navigated the uncertainty and unprecedented impacts caused by the pandemic to drive toward an accelerated recovery. I want to thank our teams around the world for their tireless efforts this year.”
For the full year, PVH’s net losses tallied $1.1 billion, down from 2019 earnings of $417.3 million, on a 28 percent drop in revenues to $7.1 billion.
Like other fashion companies, PVH’s online business soared as the pandemic kept shoppers home, prompting its digital business to double as a portion of its overall sales — and Larsson is looking to keep the e-commerce business clicking.
This is his first quarterly outing as CEO since taking the mantle in February from Manny Chirico, who led the company for 15 years and remains chairman.
Larsson reiterated his intention to focus on building the firm’s power players.
“We remain focused on connecting our core strengths to where the consumer is going — with our biggest brands Calvin Klein and Tommy Hilfiger, in how we are super charging e-commerce, through our casual assortments, and how we are taking market share in our international businesses,” Larsson added. “As we look forward, we will increasingly continue to shift our business globally toward these channels and categories. In addition, we executed disciplined expense management, significantly improved our inventory position, and ended the year with over $3 billion in liquidity. By leveraging the power of PVH, I am confident that together, we will drive brand relevance and cost efficiencies and deliver long-term sustainable growth — and do it in a way that drives fashion forward — for good.”
PVH expects earnings and revenues this year will continue to be hurt by the pandemic, particularly in the current quarter.
But even with store closures in Europe hurting the business right now, PVH said it expects its international businesses will top pre-pandemic revenues during the first half.
The lack of tourism, though, will continue to chill operations at home.
“The North America businesses are expected to remain challenged throughout 2021, as international tourism, which is the source of a significant portion of regional revenue, is not expected to return to any significant level until the end of the year,” PVH said.
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