What Boosted PVH’s Top Line in 4Q17?



PVH beats Wall Street expectations in 4Q17

PVH (PVH), which reported its 4Q17 results on March 28, saw its top line increase 18.5% YoY (year-over-year) to $2.5 billion, $144 million more than Wall Street had expected, and the company’s sixth consecutive top-line beat. Currency boosted the top line. Excluding foreign exchange, total sales grew 13% YoY. The company also benefited from a 53rd week in the year.

In fiscal 2017, sales rose 9% YoY on a reported basis and 7% on a currency-neutral basis to $8.9 billion. Management had projected a 7% increase in reported sales and a 6% increase in currency-neutral sales for the year.

“We are very pleased with our fourth quarter and full year 2017 results, which exceeded our expectations. These results are ahead of our long-term targets, driven largely by strong momentum in our Tommy Hilfiger and Calvin Klein businesses,” said PVH chairman and CEO Emanuel Chirico.

Apparel players Lululemon Athletica (LULU), Guess (GES), and Nike (NKE), which also reported results in March, posted strong top lines. While Guess and Lululemon reported 17% growth in sales, Nike’s sales rose 6.6%. All three companies exceeded top-line expectations.

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What drove PVH’s 4Q17 top-line beat?

As in the last couple of quarters, Calvin Klein’s and Tommy Hilfiger’s better-than-expected performance drove PVH’s top line. Calvin Klein sales grew 23% YoY, whereas management had expected 16% growth. Tommy Hilfiger revenue rose 22% YoY, while 12% growth had been forecast. Heritage Brands sales were flat during the quarter.

International businesses, which represent ~50% of PVH’s total sales, delivered an outstanding performance. Europe, China, and Japan were the company’s healthiest markets. Investors seeking exposure to PVH could consider the Guggenheim S&P 500 Equal Weight Consumer Discretionary ETF (RCD), which invests 1.4% of its portfolio in PVH.


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