PVH Corp. took a big bottom-line hit in the first quarter — logging net losses of $1.1 billion — but Emanuel Chirico said the company is bouncing back now and ready to press the advantage of its big balance sheet.
The losses were the result of a 43 percent drop in revenues, to $1.3 billion for the quarter ended May 3, and charges tied to the bankruptcy of J.C. Penney Co. Inc. and some of the company’s past acquisitions, including the Calvin Klein portion of the Warnaco deal. All told, there were $962 million of non-cash impairment charges. Tommy Hilfiger saw a 39 percent sales decrease in the first quarter, while Calvin Klein fell 46 percent.
Investors pushed shares of the company down 8.9 percent to $48.01 in after-hours trading, following an 11.6 percent drop in what was a dramatic sell-off in the market.
But PVH has $1.8 billion in cash and available borrowings on its balance sheet — a war chest to see it through the turmoil and maybe a big deal — and is back in business.
“We’ll have 85 percent of our stores opened globally” by mid June, Chirico, who is chairman and chief executive officer, told WWD.
PVH operates Tommy Hilfiger, Calvin Klein and other brands, and has seen revenues in its stores return earlier than the company forecast.
“Sales for reopened brick and mortar stores for the second quarter are running down, overall, generally 25 percent,” Chirico said.
The lack of tourism remains a problem, though, and it is the stores away from major metropolitan areas that are performing best.
Tommy Hilfiger RTW Spring 2020