Cameron Dallas featured in an ad for the Calvin Klein Jeans Capsule collection.

Cameron Dallas featured in an ad for the Calvin Klein Jeans Capsule collection.


PVH Corp. saw its stock increase in after-hours trading after the company managed to do what many other firms haven’t — deliver a strong quarter in earnings.

Net income for the first quarter rose to $231.6 million, or $2.83 a diluted share, up from $114.1 million, or $1.37, a year ago. Adjusted earnings per share totaled $1.50 and were flat versus last year, but beat the FactSet estimate for $1.43 a share. Non-Generally Accepted Accounting Principles net income was $122.8 million, which was lower than last year’s $124.7 million.

Net sales for the three months ending May 1 increased to $1.81 billion from $1.78 billion a year earlier. Unfortunately, this was short of the FactSet estimate for sales of $1.9 billion.

“We are very pleased with our first-quarter 2016 results, which exceeded our expectations despite the difficult retail environment experienced in the U.S. market,” said chief executive officer Emanuel Chirico. “Our Calvin Klein and Tommy Hilfiger businesses were the highlight, with significant strength demonstrated by our international businesses.”

Revenue in the Calvin Klein business increased 13 percent for the quarter, with North America leading the way gaining by 14 percent. PVH did say that consumer spending trends in tourist areas continue to be weak. Calvin Klein’s international sales decreased by 1 percent.

Revenue in Tommy Hilfiger increased 4 percent, but North America declined 5 percent, while its international business grew by 11 percent. Hilfiger was also affected by weak tourist spending in North America. The acquisition of TH Asia helped to contribute to the international business.

Heritage Brands dropped by 12 percent as PVH rationalizes the operation, including the exit of the Izod retail business.

Total gross profits were $1.01 billion, an increase on last year’s $970.6 million.

PVH also managed to do something else other recent reporting firms couldn’t do: raise guidance for the rest of the year. “Looking ahead to the remainder of 2016, we are increasing our earnings guidance on a non-GAAP basis for the year, while continuing to take a prudent approach to planning our business, as foreign currency and global consumer spending remain unpredictable and the U.S. retail market is increasingly volatile and promotional,” said Chirico.

This year, the company is forecasting full year earnings per share to be in the range of $6.45 to $6.55 and that includes a $1.55 per share negative impact related to foreign currency headwinds. The Capital IQ estimate is for $6.41. Excluding this impact, earnings are forecast to rise 13 percent to 15 percent.

The guidance reflects the proposed joint venture for Mexico that is expected to close in the third quarter. Last week, PVH revealed an agreement to form a joint venture with Grupo Axo that will operate and manage the distribution of Calvin Klein, Tommy Hilfiger, Warner’s, Olga and Speedo brand products in Mexico.

The second-quarter guidance is projected to be in the range of $1.25 to $1.30 including a 45 cent a share negative impact from foreign currency. That would be a 24 percent to 28 percent increase over the same period a year ago and is better than the FactSet estimate for $1.21.

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