Stefan Larsson is feeling positive.
Tommy Hilfiger and Calvin Klein powered through an uncertain holiday season, pushing PVH Corp. to better-than-expected fourth-quarter sales gains with strength around the globe.
That counts as a proof point for Larsson, who leads the company as chief executive officer and laid out his PVH+ strategic plan almost a year ago.
Larsson told WWD that the plan — which starts with the most important products and backs them up with a 360-degree push for consumer engagement — has brought a new kind of focus to the brands and that it is showing up in the firm’s financial results.
“We came into the holiday season and the end of the year mindful of the unprecedented combination of macro challenges and our consumer held up,” Larsson said.
PVH, like the rest of fashion, has been contending with still-high inflation, the threat of recession and a generally unsettled consumer world.
Despite that, the group turned in solid underlying growth and Larsson said, “We’re going into 2023 with strong momentum that we continue to build on. The exciting part is seeing both Calvin and Tommy and all three regions delivering.”
Bottom-line comparisons were difficult given the rush retail saw in 2021 when consumers were staying close to home, had money to spend and supply chain troubles gave stores a sense of scarcity.
PVH’s fourth-quarter net income fell to $138.7 million from $390.8 million a year earlier. Adjusted earnings per share also fell, to $2.38 from $2.84 a year ago, but easily surpassed the $1.65 projected by analysts.
However, the topline came in much stronger than expected.
Revenues for the quarter ended Jan. 29 rose 2 percent to $2.5 billion from $2.4 billion a year earlier, which included a 1 percent reduction caused by the war in Ukraine and translated into an overall increase of 8 percent in constant currencies.
Analysts had PVH penciled in for a 2.5 percent revenue decline.
Tommy Hilfiger revenues increased 3.4 percent to $1.3 billion, up 10 percent in constant currencies. Calvin Klein advanced 2.9 percent to $1 billion, up 8 percent in constant currencies.
Investors approved and sent shares of the company up 9.1 percent to $80.33 in after-hours trading on Monday.
“We know where we’re going, we know how we will get there and we have made great progress in the first year of execution” of the PVH strategic plan, Larsson said.
The plan has several moving parts, but really zeros in on hero products — the most important pieces in a consumer’s wardrobe — and pushes them to the fore with marketing that links big names with key categories.
Think Blackpink’s Jennie Kim for Calvin Klein underwear or the brand’s latest ambassador, BTS’ Jung Kook. Tommy Hilfiger’s efforts include high-profile worth with Shawn Mendes.
Larsson pointed to Michael B. Jordan’s appearance on “Jimmy Kimmel Live!,” which featured Calvin Klein and drove 1.3 billion impressions in 24 hours.
The CEO said that exposure — and fourth-quarter sales gains — come from connecting brand and product and placing them in the right context for the consumer.
“We’re going back to the DNA of Calvin and Tommy that made each of these brands collide with culture in a positive way and become iconic globally,” Larsson said. “We’re making that DNA current through product and marketing and the brand experience today. Our long-term vision is to build Calvin and Tommy into the most successful lifestyle brands in the world and then make PVH one of the highest performing brands groups in our sector.”
For the full year, PVH’s adjusted EPS tallied $8.97 as revenues slipped 1.4 percent to $9 billion. This year, the company is projecting growth with EPS of about $10 and a revenue increase of 3 percent to 4 percent.
The PVH+ plan has the company targeting $12.5 billion in revenues by 2025 and Larsson said the targets haven’t changed.
While there is some flex room in the goal, the CEO said the strategic plan is meant to deliver in good times and bad.
“We’re doing this in a tough macro situation,” Larsson said, adding, “A lot is within our control,” including the execution of PVH+.
There is still plenty more work to do — including building the capacity to make Tommy Hilfiger and Calvin Klein looks for key North American wholesale accounts now that the company is taking back its licenses from G-III Apparel Group.
G-III has started to ramp up to fill the hole left while the PVH brands transition out — signing a license with Nautica and planning to build up Donna Karan.
PVH is also preparing.
“We started planning for the gradual transition; the most material transition will start in early 2026, but the planning for that starts now,” Larsson said, adding that the brands already successfully make women’s product for Europe and Asia.
Inditex veteran Eva Serrano, who just joined the Calvin Klein brand as global brand president, will be key in that effort. She is part of Larsson’s management team, which counts several other new members, including chief financial officer Zac Coughlin, H&M vet David Savman as executive vice president and chief supply chain officer and Sara Bland as executive vice president and chief strategy officer.