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PVH, the American owner of Calvin Klein and Tommy Hilfiger, said revenues were up 2 per cent year-on-year to $1.98 billion for the first quarter of fiscal 2025, beating analyst expectations. Despite this, shares fell 17 per cent on Thursday, after the company warned that tariffs and the shaky macro environment will hurt its full-year outlook.
By brand, Calvin Klein remained flat year-on-year at $886.1 million, while Tommy Hilfiger was up 3 per cent to $1 billion, driven by growth in the Americas and EMEA (Europe, the Middle East and Africa).
“Since we last spoke, we have seen an increasingly tough macro environment,” CEO Stefan Larsson told investors on Thursday. “While we have to recognise this evolved backdrop, all our focus is on what’s within our control to strengthen and expand the impact of our own PVH+ [the company’s business strategy] actions. And in moments like this, when the external factors get worse, it’s the time to sharpen our focus, get even closer to the consumers, and expand our execution.”
“Today, we see a big difference in performance between where we have strategically leaned in to innovate and where we have yet to do so, and in the back half of this year we will accelerate the impact of these kinds of initiatives to cover a bigger part of the total assortment,” Larsson said, speaking specifically of Calvin Klein. (Though he added that this innovation focus will carry through to the Tommy Hilfiger brand as well, having observed similar trends here.)
By region, EMEA revenues were up 4 per cent year-on-year to $927 million. “Despite the continued muted consumer backdrop, we drove better conversion across the region with particular strength in the big consumer moment,” Larsson told investors. The Americas were up 8 per cent to $608.4 million. The tough consumer environment is most notable in the US, CFO Zac Coughlin said.
Asia-Pacific fared worse, down 11 per cent to $351.7 million. PVH attributes this to an approximately 3 per cent decline due to the timing of the Lunar New Year shopping period (primarily in the fourth quarter of 2024) as well as a challenging consumer environment, especially in China. “As we shared last quarter, starting in February, we began to face incrementally tougher headwinds in China, which have since continued,” Larsson said. “While we’re optimistic about the opportunities to grow our brands in the regions, we are realistic about the continued headwinds from a challenging backdrop, particularly in China.”
Despite the positive quarter, PVH lowered its full-year expectations, citing the tough macro environment. PVH affirmed its revenue outlook of flat growth or a slight increase (on a constant currency basis), but lowered forecasts for its projected operating margin and earnings per share (EPS). “Although we are reaffirming our revenue guidance of flat to up slightly, we are not yet in a place to fully compensate for the effects of these strong macro forces, and that’s why we have to adjust our full-year non-gap guidance down for both EBIT [earnings before interest and taxes] margin and EPS,” Larsson said.
“Across the industry, we are navigating a very uncertain consumer and macro environment that has become increasingly challenged over the past three months,” he added. “The tougher retail trends we saw in February continued, with consumer sentiment further weakening to some of its lowest recorded levels since the 1950s.”
Tariffs are only exacerbating these challenges, the CEO said. PVH anticipates that the unmitigated impact of tariffs will create a headwind of approximately $65 million to the company’s full-year EBIT. Consistent with the latest crop of US earnings, PVH said that it anticipates this will weigh predominantly on the second half of the year.
“This guidance is not what we set out to deliver when we started the year, and as a leadership team, we are leaning into where we have the strength in the PVH+ execution, and we will expand its impact already for the back half of this year,” Larsson said.
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