said his PVH+ plan is already paying off with first-quarter results that showed continued strength despite the lockdowns in China.
The chief executive officer of PVH Corp. told WWD: “We feel really good about where we delivered Q1 and where we’re headed for the rest of the year. The quarter is the beginning of a multiyear journey and we feel very good about the plan and we continue to closely monitor our consumer and our business and it remains strong.”
Larsson laid out his strategic plan for PVH in April, targeting revenues of $12.5 billion in 2025, up from $9.2 billion last year, underscoring that the company has not one, but two power brands in Tommy Hilfiger and Calvin Klein, to get there.
Now, PVH+ is underway. First-quarter net income increased 33.2 percent to $133.1 million, or $1.94 a diluted share, from $99.9 million, or $1.38 a year ago.
That put the company’s earnings per share 33 cents ahead of the $1.61 analysts had penciled in. Investors gave the quarter their stamp of approval and sent shares of the company up 5.5 percent to $75 in afterhours trading on Wednesday.
Revenues for the three months ended May 1 increased 2 percent to $2.1 billion, an increase of 7 percent on a constant currency basis.
Tommy Hilfiger’s revenues grew 2 percent to $1.07 billion from $1.05 billion, while Calvin Klein’s revenues increased 13 percent to $886.2 million from $785.2 million.
And Larsson says PVH can keep the ball rolling despite what has been an “increasingly volatile background macro” environment.
“We’re reaffirming our full-year guidance and we are doing that because of the continued strength across both brands in our business and across our regions and with our consumer,” the CEO said.
Currency fluctuations are seen biting into PVH’s sales plan for the year, with net revenues now slated to increase in a range of 1 percent to 2 percent instead of the 2 percent to 3 percent previously projected.
But the outlook is unchanged on a currency neutral basis, with the top line slated for a 6 percent to 7 percent rise.
Adjusted EPS are still seen coming in at about $9 for the year.
And PVH is looking to give back more to shareholders in the form of share repurchases. The company now plans to buy back about $400 million worth of its own stock, up from the roughly $225 million previously seen.
Like nearly every other company in fashion, PVH is steering into uncharted territory. The firm noted there was “significant uncertainty due to the war in Ukraine and its broader macroeconomic implications, inflationary pressures globally, as well as the continued uncertainty due to the COVID-19 pandemic.” On top of all that, global supply chain backups are leading to delivery delays for both wholesale customers and the company’s own stores.
But Larsson said the supply chain and inventory delays are expected to ease in the back half.
While many observers are worrying over the possibility of a recession or a consumer slowdown, Larsson said PVH is positioned to win even if the economy weakens.
“We have a history of being able to perform well independently of the macro,” Larsson said. “It connects back to the positioning of the brands. We have the pricing power and yet we’re still accessible.”
And its brand that the PVH+ plan is designed to highlight.
The idea is to build on the strength of Tommy Hilfiger and Calvin Klein through “five key growth drivers” intended to help the brands “win with product, win with consumer engagement, win in the digitally led marketplace, develop a demand- and data-driven operating model, and drive efficiencies and invest in growth,” according to a summary of the plan.
Larsson pointed, for instance, to Calvin Klein’s collaboration with Palace for CK 1 Palace, which he said was the brand’s strongest collaboration to date, bringing “hero product” in key categories to the skate brand’s audience.
He noted that both Calvin Klein and Tommy Hilfiger are also broad enough to flex with the changing styles of consumers as they move into the next phase.
“Both brands are able to shift from a very strong casual focus during the pandemic to a more refined focus and more refined way of dressing,” Larsson said.
“In tougher times, it’s even more important to have a strong brand with staying power,” the CEO said, emphasizing the importance of being “increasingly focused on delivering real value to the consumer — real value items, great product, quality product in the channels they want.”
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