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PVH, the New York-based owner of Tommy Hilfiger and Calvin Klein, reported a revenue decrease of 10 per cent year-on-year to $1.95 billion, beating both its own outlook and analyst expectations. PVH also announced that Martijn Hagman, CEO of Tommy Hilfiger global and PVH Europe, will be exiting the company.
Though revenues were down, they exceeded the company’s original 2024 outlook of an 11 per cent dip, which analyst Dana Telsey called “disappointing” last quarter.
By brand, Tommy Hilfiger revenues were down 10 per cent year-on-year, and Calvin Klein revenues were flat. Both brands saw international drops (14 per cent at Tommy Hilfiger, 2 per cent at Calvin Klein) and slight upticks in North America (2 per cent at Tommy Hilfiger, 4 per cent at Calvin Klein), where the company’s overall sales were up 3 per cent.
“Although we are still early in our journey to build Calvin Klein and Tommy Hilfiger into the most desirable lifestyle brands in the world, we are already creating some of the highest consumer engagement in the history of our brands,” CEO Stefan Larsson said. “We also continue to gain traction in all five PVH+ Plan growth drivers, with strong growth in key product categories and hero products with significant gross margin expansion. This is fuelled by the buildout of our demand-driven supply chain and targeted growth investments, complemented by cost efficiencies from simplifying how we work.”
In Europe, revenues were down 12 per cent year-on-year. This is in line with the company’s plan, Larsson told investors on Wednesday’s call. “As we shared previously, we have seen tough macro conditions, especially in our two biggest markets, the UK and Germany, where consumer sentiment is challenged and our wholesale partners are cautious. In this tougher macro, our focus continues to be on quality of sales to set ourselves up for profitable brand and creative growth.”
In the Asia Pacific region, which saw growth of 3 per cent, Larsson highlighted strong growth in China, Japan and South Korea. The Formula One Shanghai Grand Prix boosted brand heat in the market, Larsson said, adding to buzz from brand partnerships with Jungkook and Jennie Kim.
Across PVH brands, direct-to-consumer (DTC) revenues were up 1 per cent year-on-year, while wholesale fell 17 per cent.
This quarter, there have been leadership shake-ups across the company. On 30 May, Calvin Klein announced the appointment of creative director Veronica Leoni, brought on to revive the Calvin Klein Collection. The brand will return to the runway for Autumn/Winter 2025. “The collection on the runway will create the aspirational halo for the brand, adding new dimensions of desirability to the already strong foundation in product and marketing,” Larsson said.
At the C-suite level, team members are shuffling to fill Hagman’s role. Tommy Hilfiger president Lea Rytz Goldman will take up the global role, reporting directly to Larsson. “It follows the same brand structure as Calvin. When [global brand president] Eva Serrano came in a year ago, we can already see the positive performance in Calvin from that. So we’re mirroring that structure for Tommy,” Larsson said. “With Lea coming in, flattening the structure, it was the right time to make that change.” Chief supply chain officer David Savman will be interim CEO of PVH Europe.
Despite beating its original Q1 guidance, PVH has reaffirmed its course of a projected second-quarter decrease of 6 to 7 per cent as compared to 2023. For the full year, PVH also anticipates a revenue decrease of 6 to 7 per cent, including a 2 per cent decline due to the November 2023 sale of its Heritage intimates business. The company is raising its EPS outlook from $11.15 to $11.40 from the previous guidance range of $10.75 to $11.00.
“We continue to navigate a tough macro environment including the soft consumer backdrop and a conservative wholesale environment,” said CMO Zac Coughlin. “We are laser focused on executing the five key growth drivers of the PVH+ plan, bringing together the consumer-facing value drivers of product, consumer engagement and marketplace with our underlying operating engines to deliver sustainable long-term profitable growth.”
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