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Exploring Calvin Klein’s Solid 1Q17

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Evaluating Calvin Klein’s 1Q17 performance

Calvin Klein accounted for 38% of PVH Corporation’s (PVH) 1Q17 top line. The business grew 4.5% YoY (year-over-year) during the quarter after falling 1.4% in 4Q16. On a constant currency basis, its revenue rose 6% and stood at $756 million.

“Calvin continues to capture compelling brand and cultural relevancy through its focus on digital consumer engagement, elevated brand imagery and strong digital advertising campaigns which have created impactful interactions with consumers,” said Emanuel Chirico, PVH’s chair and CEO.

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CK’s revenue drivers

Calvin Klein’s international sales rose 11% on a reported basis and 13% on a constant currency basis to $380 million. Its comparable store sales rose 3%, driven by continued strength in China and Europe. CK’s fall 2017 orderbook has risen 25%, and strength can be seen across all its major product categories in all key markets.

However, CK’s North American sales fell 1% YoY in the quarter. This fall was principally driven by the brand’s Mexico deconsolidation and a 5% fall in its North American sales comps. Its wholesale business, though, witnessed healthy growth.

“The environment in North America continues to be challenging with traffic trends and the department store landscape on the pressure which we believe will continue throughout 2017,” said Chirico.

ETF investors looking to add exposure to PVH may want to consider the First Trust Consumer Discretionary AlphaDEX ETF (FXD), which invests 1.4% of its portfolio in the stock.

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