PVH, which owns Tommy Hilfiger and Calvin Klein, said revenues were down 5 per cent to $2.3 billion in the third quarter on a reported basis. This was better than its original forecast of a 6 to 7 per cent decrease, but underlines the challenges it continues to face. Shares fell 6.5 per cent in early trading after the results were released on 5 December, yet rallied as the day went on.
By brand, Tommy Hilfiger revenues were down 1 per cent year-on-year. International revenues were flat, and North America revenues were down 3 per cent. Calvin Klein revenues were down 3 per cent year-on-year. International revenues were up 1 per cent, and North America was down 5 per cent.
“We beat our top and bottom-line guidance for the third quarter, fuelled by our relentless execution of the PVH+ Plan [the turnaround plan it set out in 2022],” said CEO Stefan Larsson. “Throughout the quarter, we drove powerful consumer engagement for both Calvin Klein and Tommy Hilfiger, and continued to build momentum in product, with significantly improved sell-throughs for the Autumn/Winter 2024 season across all regions and both our iconic brands; and we are coming into the holiday season with a fresh and strong inventory composition.”
Direct-to-consumer revenues were flat year-on-year, with store revenue up 1 per cent and digital down 1 per cent. Wholesale revenues decreased 8 per cent, including a 4 per cent reduction due to the sale of women’s intimates business Heritage Brands.
Europe revenues declined 1 per cent. Asia revenues saw mid-single-digit growth. In all channels, growth was led by Japan. Larsson highlighted a 7 per cent increase in China (in local currency) thanks to the company’s 11.11 (Single’s Day) activation. “From a channel perspective, we delivered double-digit e-commerce growth in the region and low-single-digit increases in stores,” he said.
In North America, PVH revenues were down 6 per cent. “The tougher macro combined with our focus on driving more full-price sales and less clearance led revenue in the quarter to decrease,” Larsson said. That said, PVH is optimistic about the North American consumer, and expects full-year revenues to be up low-single digits compared to 2023. “When we look at customer research in North America, we see how strong our brands are with North American consumers,” Larsson said. In a sign of this confidence, Larsson announced that Calvin Klein will open a flagship store in New York’s SoHo. He also announced that PVH Americas president Donald Kohler will now take on the role of Americas CEO.
The US consumer remains strained. Across the board, US brands and retailers saw dips in North American consumer revenues, from Nike to Tapestry. Ralph Lauren bucked the trend, reporting a 3 per cent uptick in US revenues in November.
Consumers may be squeezed, but this holiday season they’re spending all the same. Larsson noted a heightened promotional environment because the holiday season started earlier than the year prior. This meant consumers started shopping early and retailers responded with discounts. That said, PVH is on track for its holiday targets across all regions.
Looking ahead, PVH reaffirmed its projection of a 6 to 7 per cent decrease in full-year revenue for 2024.
“For 2025, we expect to return to growth,” Larsson said. “We do that based on the parts of the PVH+ growth plan that are coming into place in 2024. The investments behind the growth initiatives and the new efficiencies are giving us confidence to not only come back to growth for 2025, but to take another step towards our 15 per cent long-term operating margin target.”
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