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Tommy Hilfiger Continued to Show Momentum in 1Q17

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Evaluating Tommy Hilfiger’s performance

Tommy Hilfiger is PVH Corporation’s (PVH) largest business. It accounted for 42% of the company’s 1Q17 sales. The business has shown continuous improvement since 2016, growing 4% during the year after recording a 6% fall in 2015.

1Q17 was another strong quarter for Tommy Hilfiger, as its sales rose 6.3% on a reported basis and 9% on a constant currency basis. Its performance is impressive, especially compared to other branded apparel peers Ralph Lauren (RL) and VF Corporation (VFC). These two companies reported sales falls of 16% and 1.9%, respectively, in their most recent quarters.

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What were Tommy’s key revenue drivers in 1Q17?

As in the last several quarters, Tommy’s 1Q17 sales growth was driven by robust international sales. Its international revenue rose 15% YoY (year-over-year) to $524 million. International revenue rose 19% on a constant currency basis, driven by a solid performance in the European market and the inclusion of a full quarter of revenue from its acquisition of the remaining interest in Tommy Hilfiger China. Its international sales comps rose 14% during the quarter.

Tommy Hilfiger’s North American sales fell 5% to $318 million, primarily driven by a revenue fall related to its licensing of its Tommy Hilfiger North America womenswear wholesale business to G-III Apparel Group (GIII). Its North American sales comps also fell 4% during the quarter.

ETF investors seeking to add exposure to PVH can consider the iShares Morningstar Mid-Cap ETF (JKG), which invests 0.44% of its portfolio in PVH.

Read the next section for more information on PVH’s Calvin Klein segment.

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