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.
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.