PVH's net sales for Q1 (ended 5 May 2024) were down to $1.85bn from $2.05bn the same period the year before. Its revenue was down 10% to $1.95bn compared to the prior year period, however the company said it exceeded its guidance of a decrease of 11%.
The company's earnings before interest and taxes (EBIT) was $205m on a GAAP basis and $195m on a non-GAAP basis compared to $199m in the prior year period.
Net income increased to $151.4m compared to $136m the same period the year before.
PVH chief financial officer Zac Coughlin said: “We drove solid first quarter results, which included strong gross margin expansion and double-digit EPS growth as we continue to manage our business prudently."
PVH CEO Stefan Larsson added: "We delivered on our revenue expectations, led by growth in our direct-to-consumer business, and beat our earnings guidance for the first quarter. We further strengthened our brand positioning and pricing power in the marketplace, and as planned we generated growth for Calvin Klein and Tommy Hilfiger combined in both North America and Asia Pacific in constant currency, while successfully driving strategic quality of sales initiatives in Europe.”
He noted the company is still early on in its journey to build Calvin Klein and Tommy Hilfiger into the "most desirable lifestyle brands in the world", however he claimed PVH is already creating some of the highest consumer engagement in the history of its brands.
He 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 build-out of our demand-driven supply chain and targeted growth investments, complemented by cost efficiencies from simplifying how we work.”
Key PVH Q1 2024 results
- Net sales down to $1.85bn from $2.05bn the same period the year before
- EBIT was $205m on a GAAP basis and $195m on a non-GAAP basis, compared $199m in Q1 2023
- Net income rose to $151.4m from $136m the year before.
PVH maintains FY24 revenue outlook, ups earnings guidance
PVH has reaffirmed its revenue outlook for FY24 as being a projected decrease of 6% to 7% (decrease 6% to 7% on a constant currency basis). Its operating margin is reaffirmed as being approximately flat compared to 10.1% in 2023.
Coughlin explained the company is raising its EPS guidance despite the continued tough macroeconomic backdrop globally.
She said this reflects PVH's confidence in the execution of its PVH+ Plan, and stated: "We are on track to generate significant cash flow for the year and deployed approximately $200m in the first quarter for share repurchases. This underscores our commitment to delivering shareholder returns, as well as the conviction we have in our ability to drive sustainable, long-term, profitable growth.”
PVH Tommy Hilfiger Global and PVH Europe CEO exits
PVH also announced that its Tommy Hilfiger Global and PVH Europe CEO Martijn Jagman will be leaving the company after 16 years but will serve in an advisory capacity to ensure a smooth transition.
Tommy Hilfiger global president Lea Rytz Goldman will lead the brand reporting directly to Larsson. PVH's chief supply chain officer David Savman will serve as interim CEO for PVH Europe while the company searches for a new European leader.
Larsson said: “I want to thank Martijn for his significant contributions to PVH over the past 16 years, being a key leader in helping to build our European region into the market-leading and highly profitable multi-brand business we have today.”
Regarding Savman’s appointment, he added: “Since David joined us, he has played a unique role in the company as a key leader driving strong PVH+ Plan performance, all the way from product creation to marketplace execution.”
