Emanuel Chirico is taking a cautious tack.
PVH Corp.’s third-quarter profits fell as tourist traffic continued to be an issue — and might well stay that way if the dollar continues to appreciate under President Donald Trump.
But Chirico, chairman and chief executive officer, said his company was navigating the choppy waters well, turning in what he described as a “strong performance” for the quarter despite the “volatile macroeconomic environment.”
Net profits fell 43.2 percent to $126.1 million, or $1.56 a diluted share, from $221.9 million, or $2.67, a year earlier. Adjusted earnings before interest and taxes fell to $276 million, from $288 million a year earlier — and reflected a $41 million negative impact from currency exchange.
Net revenues for the three months ended Oct. 30 rose 3.7 percent to $2.24 billion from $2.16 billion.
Investors sent shares of PVH down 2.3 percent to $103.56 in after-hours trading Wednesday.
“We continue to over-deliver against our 2016 plan, driven in large part by strong momentum across our Calvin Klein and Tommy Hilfiger International businesses,” Chirico said. “While our North America wholesale businesses have performed well throughout the year, we have not experienced any significant improvement in traffic and consumer spending trends across our Tommy Hilfiger and Calvin Klein U.S. outlet stores located in international tourist locations.”
Third-quarter revenues from the Calvin Klein business rose 9 percent to $891 million, including a 5 percent gain in the North American business, to $502 million. The brand’s own stores saw a 5 percent comparable-store sales decline and weakness in areas that have historically drawn international tourists.
Tommy Hilfiger’s topline rose 4 percent to $927 million, despite a 7 percent drop in the North American business, to $402 million. The decline in the brand’s home market was attributed to an 11 percent comparable-store sales decline driven by what the company described as “continued weakness in traffic and consumer spending trends in Tommy Hilfiger’s U.S. stores located in international tourist locations, and the winding down of the company’s directly operated women’s wear wholesale business in the U.S. and Canada in connection with licensing this business to G-III Apparel Group.”
For the full year, PVH is looking for adjusted earnings of $6.70 to $6.75 a share, up from the $6.55 to $6.65 projected in August, but still down from the $7.05 seen in 2015.
Although the company nudged up its adjusted earnings guidance for the full year, Chirico noted, “We continue to take a prudent approach to planning the holiday season in light of the macroeconomic and geopolitical volatility around the world, as well as the strengthening dollar in the wake of the U.S. presidential election.”