PVH reports a strong top line
PVH (PVH), which reported its first-quarter results on May 30, delivered its seventh consecutive top-line beat. Its total sales rose 16.4% YoY (year-over-year) to $2.3 billion, $32 million more than Wall Street expected. Currency boosted sales by six percentage points.
Results were also better than management’s forecast of a 15% increase in reported sales and 9% increase in currency-neutral sales for the year.
“We are very pleased with our first quarter 2018 results, which exceeded our expectations. We experienced broad-based strength across our businesses globally and our performance underscored the power of our diversified business model and the continued momentum in our global designer lifestyle brands, CALVIN KLEIN and TOMMY HILFIGER,” said chairman and CEO Emanuel Chirico.
PVH’s premium brands, Calvin Klein and Tommy Hilfiger, once again posted strong growth, driving the top-line beat. Let’s discuss their performance in detail.
Calvin Klein sales rose 18% YoY to $890 million, beating management’s guidance of a 17% growth. International sales grew 25% YoY (14% on a constant-currency basis) to $475 million, driven by a 9% increase in comps. Europe and Asia, once again, delivered outstanding results. CK North America continued to improve and grew 10% during the quarter. Retail comps came out positive once again and rose 5%.
Tommy Hilfiger revenue increased 21% YoY to $1 billion, while management had guided for a 19% YoY increase. Behind the strong sales numbers were 25% (10% on a constant currency basis) growth in Tommy Hilfiger’s international business and a 13% increase in North American revenue. Comps improved 9% in North American and overseas 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. Continue to the next section for a look at PVH’s margins and profitability during the first quarter.