PVH does better than Wall Street expectations in 2Q17
PVH Corp (PVH), which reported its second quarter results on August 23, 2017, posted a top-line rise of 7.1% YoY (year-over-year) to $2.1 billion. That was $40.0 million more than Wall Street’s expectation and the company’s fourth consecutive sales beat.
According to Emanuel Chirico, chair and CEO (chief executive officer) of PVH, the company’s better-than-expected second quarter results “reflect the continued momentum and ongoing operating efficiencies” across PVH’s business model.
Competitors VF Corporation (VFC) and Ralph Lauren (RL) also performed better than Wall Street’s top-line expectations this earnings season. VFC reported a 2.0% rise in quarterly sales, but Ralph Lauren’s top line fell 13.0% YoY.
What drove the top-line beat?
Similar to the last two quarters, PVH’s top line beat was due to solid momentum for its premium brands. Calvin Klein rose 8.0% YoY during the quarter, and sales for Tommy Hilfiger rose 4.0% YoY. As before, growth was primarily driven by strength in the international markets.
“Tremendous strength continued across all of our businesses with our international businesses demonstrating outsized performance, particularly China, Europe and Japan which are our healthiest markets. Meanwhile, our North America business performed in line with our plan but the US market continues to be highly competitive and promotional,” said Chirico in the earnings call.
Heritage Brands sales rose 13.0% YoY, primarily due to the change in shipment timings.