PVH rallies after posting strong underlying sales, extending key licenses
PVH Corp. (NYSE:PVH) shot higher in postmarket trading on Wednesday after topping estimates with its Q3 earnings report.
Revenue fell 2.1% during the quarter, but was 7% higher on a constant currency basis. The high single-digit underlying revenue growth was driven by growth across all regions and in both its Tommy Hilfiger and Calvin Klein brand businesses.
Direct-to-Consumer revenue decreased 5% (+5% on a constant currency basis) and wholesale revenue decreased 2% (+9% on a constant currency basis). Total Digital revenue decreased 12% (+1% on a constant currency basis).Gross margin came in at 55.9% of sales vs. 57.7% a year ago. The benefit from price increases during the quarter was more than offset by higher costs, increased promotional activity and the negative impact of approximately 40 basis points of foreign currency translation.
Looking ahead, PVH expects full-year revenue in line with the top end of previous guidance range, projected to decrease approximately 3% (+4% on a constant currency basis). Full-year EPS of $1.65 is anticipated vs. $1.69 consensus.
CFO update: "We continue to manage our business in a prudent and disciplined manner, and delivered on the commitments we made by relentlessly focusing on improving execution and reducing costs. We are doubling down on the PVH+ Plan growth drivers and focusing on what is within our control to drive sustainable growth, generate strong cash flows, and deliver shareholder returns."
In a separate announcement, PVH (PVH) said it has has extended most of its license agreements with G-III Apparel Group (GIII) for Calvin Klein and Tommy Hilfigerin U.S. and Canada, largely pertaining to the women’s North America wholesale business. Both the Calvin Klein and Tommy Hilfiger agreements will now have staggered expirations from 2025 through 2027.
Shares of PVH were up 8.75% shortly following the earnings topper.