The brand operator posted consolidated net sales of $1.87 billion for the quarter ended April 30, a 3.3 percent increase over the same quarter last year, but net income came in at $70.1 million, a sizable drop from $231.6 million a year ago.
PVH attributed some of the loss in profits to various expenses, including $7 million related to relocating the Tommy Hilfiger offices in New York and $54 million related to a venture with Li & Fung to create a new supply chain.
Diluted net income per common share also fell to 89 cents from $2.83 last year.
PVH attributed the comparably low income to a $153 million non-cash gain included in the prior year period related to a write-up of its acquisition of TH China, Tommy Hilfiger’s former partner in the country. Other costs included $7 million related to relocating the Tommy Hilfiger offices in New York and $54 million related to a venture with Li & Fung to create a new supply chain.
Calvin and Tommy continued to perform during the quarter. Revenue from Hilfiger increased 6 percent to $842 million, buoyed by a 15 percent rise in revenue from international sales, while Calvin’s revenue grew by 5 percent to $776 million, including an 11 percent rise in international.
Nevertheless, PVH chief executive officer Emanuel Chirico said the brands are still experiencing “strong momentum” and noted that the first quarter exceeded the company’s sales and earnings guidance.
“Our first-quarter performance underscored the power of our diversified business model and the strength in our international businesses,” Chirico said. “We believe that our brands, led by Calvin Klein and Tommy Hilfiger, continue to resonate with consumers and are gaining market share against our competition. As the global retail environment shifts, we continue to focus on adapting to change, while investing in our brands and operating platforms to capitalize on the opportunities for each of our businesses.”
PVH also upped its full-year guidance slightly, saying it expects earnings per share in the range of $6.24 to $6.34 compared to $6.79 in 2016. When the company posted its fourth-quarter results, it said it was staking a “prudent approach” to the 2017 and projected earnings of $6.20 to $6.30.
Consolidated revenue is also now expected to rise 3 percent, from initial projections of 2 percent.
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