- Prachi Singh |
Fourth quarter revenue at PVH of 2.1 billion dollars was flat compared to the prior year period. Revenue for 2016 increased 2 percent and 4 percent on a constant currency to 8.2 billion dollars compared to the prior year. The company said, 2016 EPS exceeded guidance and on GAAP basis was 1.26 dollars in the fourth quarter and 6.79 dollars for the full year. Non-GAAP was 1.23 dollars in the fourth quarter and 6.80 dollars for the full year.
Commenting on these results, Emanuel Chirico, Chairman and CEO, said in a statement, “We are very pleased with our fourth quarter results, which exceeded both our sales and earnings guidance despite the volatile macroeconomic environment and the highly promotional retail market in the US. We continued to demonstrate strong momentum in our Calvin Klein and Tommy Hilfiger businesses.”
Fourth quarter business segment review
Revenue in the Calvin Klein business for the quarter decreased 1 percent to 795 million and was flat on a constant currency basis compared to the prior year period. PVH said this includes a reduction of approximately 25 million dollars resulting from the November 2016 deconsolidation of the company’s subsidiary that principally operated and managed its Calvin Klein business in Mexico in connection with the formation of a joint venture in Mexico.
Calvin Klein International revenue increased 11 percent to 385 million dollars and increased 14 percent on a constant currency basis compared to the prior year period, including a 6 percent increase in comparable store sales, due to continued strong performance in Europe and China. Calvin Klein North America revenue decreased 11 percent, also on a constant currency basis to 409 million dollars. North America comparable store sales decreased 2 percent.
Revenue in the Tommy Hilfiger increased 3 percent to 932 million dollars and 5 percent on a constant currency compared to the prior year period. Tommy Hilfiger international revenue increased 10 percent or 14 percent on constant currency to 513 million dollars driven by positive performance in Europe, including a 7 percent increase in comparable store sales, and the April 2016 acquisition of the 55 percent interest in the company’s former joint venture for Tommy Hilfiger in China.
Tommy Hilfiger North America revenue decreased 4 percent, also on a constant currency basis to 419 million dollars due to a 7 percent comparable store sales decline and the discontinuation of the company’s directly operated womenswear wholesale business in the US and Canada during the quarter in connection with the licensing of this business to G-III Apparel Group.
Revenue in the Heritage Brands business for the quarter decreased 5 percent to 381 million dollars compared to the prior year period, principally resulting from the discontinuation of several licensed product lines in the dress furnishings business. Comparable store sales were flat compared to the prior year.
Earnings per share for the quarter was 1.26 dollars on a GAAP basis compared to 1.63 dollars in the prior year period. Earnings per share were 1.23 dollars on a non-GAAP basis compared to$1.52 in the prior year period. Earnings before interest and taxes on a GAAP basis for the quarter decreased to 154 million dollars compared to 176 million dollars in the prior year period. Earnings before interest and taxes on a non-GAAP basis for the quarter was 147 million dollars compared to 183 million dollars in the prior year period.
Full year revenues rose 2 percent
Revenue for 2016 increased 2 percent and 4 percent on a constant currency to 8.2 billion dollars compared to the prior year. The company said, revenue change was due to a 7 percent or 9 percent increase on constant currency in the Calvin Klein business compared to the prior year, driven by the continued significant growth in Europe, China and the North America wholesale business, partially offset by a decrease due to the Mexico deconsolidation.
International comparable store sales increased 6 percent, while North America comparable store sales decreased 4 percent, primarily driven by declines in traffic and consumer spending in Calvin Klein’s US stores located in international tourist locations. The company reported a 4 percent or 5 percent increase on constant currency in the Tommy Hilfiger business compared to the prior year, driven principally by strong growth across Europe, including a 9 percent increase in comparable store sales, and the inclusion of the revenue of the China business after completion of the TH China acquisition in April 2016.
Tommy Hilfiger North America comparable store sales declined 9 percent, driven by weak traffic and consumer spending in Tommy Hilfiger’s US stores located in international tourist locations. Also negatively impacting Tommy Hilfiger North America revenue was the discontinuation of the company’s directly operated women’s wear wholesale business in the US and Canada in connection with the G-III license.
A 10 percent decrease in the Heritage Brands business compared to the prior year, principally driven by the rationalization initiatives in the business, partially offset by a 7 percent increase in comparable store sales.
Earnings before interest and taxes on a GAAP basis for 2016 increased to 789 million dollars compared to the prior year of 761 million dollars due in large part to a net gain of 76 million dollars. Earnings before interest and taxes on a non-GAAP basis was 794 million dollars, inclusive of a 145 million dollars negative impact due to foreign currency exchange rates, compared to 842 million dollars in the prior year.
Forecasts 5 percent revenue growth for Calvin Klein in FY17
In FY17, the company expects GAAP EPS to range between 6.20 dollars to 6.30 dollars and from 0.73 dollar to 0.75 dollar in the first quarter. On non-GAAP basis, EPS is expected to range between 7.30 dollars to 7.40 dollars for the full year and 1.58 to 1.60 dollars in the first quarter.
PVH said negatively impacting the revenue in 2017 as compared to 2016 is a decrease due to the Mexico deconsolidation, which resulted in the company no longer recognizing revenues from a directly operated business in Mexico, and a decrease due to the G-III license, which resulted in the discontinuation of the company’s directly operated women’s wear wholesale business in the US and Canada in the fourth quarter of 2016.
Full year revenue for the Calvin Klein business is projected to increase approximately 5 percent or approximately 7 percent on a constant currency basis, which includes the negative impact of the Mexico deconsolidation. Revenue for the Tommy Hilfiger business is projected to increase approximately 1 percent or approximately 4 percent on a constant currency basis, which includes the negative impact of the G-III license. Revenue for the Heritage Brands business is projected to decrease approximately 1 percent.
Revenue in the first quarter of 2017 is projected to increase approximately 2 percent or approximately 4 percent on a constant currency basis compared to the prior year period. Negatively impacting revenue, the company said, is a reduction in revenue resulting from the Mexico deconsolidation and the G-III license, partially offset by an increase in revenue from the Tommy Hilfiger China business, which was acquired in April 2016, as the first quarter of 2017 will include a full quarter of revenue, while the first quarter of 2016 included less than one month of revenue.
Revenue for the Calvin Klein business in the first quarter is projected to increase approximately 3 percent or approximately 5 percent on a constant currency basis, which includes the negative impact of the Mexico deconsolidation. Revenue for the Tommy Hilfiger business is projected to increase approximately 4 percent or approximately 8 percent on a constant currency, which includes an increase in revenue from the Tommy Hilfiger China business, partially offset by the negative impact of the G-III license. Revenue for the Heritage Brands business is projected to decrease approximately 3 percent.
Picture:Calvin Klein website
- Vivian Hendriksz |
London - It may have been a difficult year for some, but for Jeff Bezos, CEO of online giant Amazon, it was his best year yet - at least in terms of money. No other billionaire in the world saw their fortunes increase like Bezos, who saw his net worth grow by a staggering 27.6 billion dollars - more than the total net worth of all but the top 24 richest billionaires, according to Forbes 2017 World's Billionaire list.
Bezos currently holds a net worth of 72.8 billion dollars, making him the third richest billionaire in the planet after Microsoft's Bill Gates and Warren Buffett. The past year saw Bezos enter Forbes World's Billionaires top 10 ranking for the first time and thanks to his most successful year to date, Bezos has climbed two spots up, firmly securing 3rd place. Part of Bezos net worth boost is linked to Amazon's stock, as Bezos owns close to 17 percent of Amazon.com
CEO at Amazon sees net worth grow 27.6 billion dollars
Over the past year Amazon's stock price grew 67 percent over the last year due to its successful cloud-computing unit, Amazon Web Services, ongoing investments in fashion as well as the ecommerce platform's push into new markets, like India. Seen as the leading ecommerce business, Amazon is said to be the fastest company in history to hit 100 billion dollars in annual sales, which it hit in 2015. Offering everything from fashion to books and homeware, the US online giant holds the largest market in its home town, accounting for 43 percent of all US online retail sales in 2016 according to Slice Intelligence.
As Amazon continues to grow its online market share in the US and overseas, the e-commerce company set its sights on dominating another market - fashion. The online company is expected to surpass Macy's as the biggest apparel seller in the US sometime this year, as Amazon continues to invest in developing its own private-label apparel brands and expanding its fashion offering to include higher end brands such as Stuart Weitzman and Zac Posen. The online company previously opened its own state of the art photography studio dedicated to fashion in Shoreditch London and is said to be developing its own private-label athleisure and plus-size offering as well.
In addition, Amazon recently launched a new tool on its app "Outfit Compare" which is designed to help Amazon Prime Members select what outfit they should wear for the day. The tool includes advice on fit, colour, styling and trends and is part of Amazon bid to boost its fashion offering.
- Prachi Singh |
Total revenue for the fourth quarter of fiscal 2017 was 204 million dollars, a 4.7 percent or 3.3 percent decrease on constant currency compared to 214 million dollars reported in the fourth quarter of fiscal 2016. Fiscal 2017 revenues were 861 million dollars as compared to 900 million dollars in fiscal 2016. As reported under GAAP, fourth quarter net income was 9 million dollars or 0.59 dollar per diluted share, compared to a loss of 17.7 million dollars or 1.18 dollars per diluted share, in the fourth quarter of fiscal 2016.
"Fiscal 2017 saw solid progress on our strategic plan, which led to sales growth in our core global brands, expansion in gross margin and earnings in line with guidance. While 12 million dollars in revenues were held back in the fourth quarter as certain retail partners lowered shipments in a challenging retail environment, the strength of our sell through rates enabled us to recapture the majority of these sales shipments at the start of fiscal 2018,” said Oscar Feldenkreis, CEO and President of the company in a statement.
Q4 comparable sales down 6.2 percent
The company said its fourth quarter reflected a 1.4 percent or 3.2 percent on constant currency increase in men's business including Perry Ellis, Original Penguin, Golf Lifestyle Apparel and Nike, offset by a comparable sales decline of 6.2 percent within the direct-to-consumer business as store traffic dropped by 15 percent and industry softness, which impacted wholesale shipments and replenishment deliveries during the second half of January.
The company said, it managed the assortments and inventory well, which led to the expansion of adjusted gross margin by 150 basis points to 38.7percent from 37.2 percent in fourth quarter of fiscal 2016. Strength in the company's Perry Ellis, Golf Lifestyle Apparel and Nike business led to the margin increase. Adjusted EBITDA margins also expanded to 8.4 percent as compared to 6 percent in the fourth quarter of fiscal 2016.
Adjusted net income totalled 10.1 million dollars or 0.66 dollar per diluted share as compared to 5.4 million dollars or 0.35 dollar per fully diluted share in the fourth quarter of fiscal 2016.
Core brands revenue grows 1.6 percent in FY17
The company's core brands saw revenue growth of 1.6 percent or 3.2 percent on constant currency in the year. This, the company said was offset by planned reductions of 20 million dollars in exited brands and an 11 million dollars reduction in special market programs. The 2017 fiscal year also saw an 11 million dollars negative impact from unfavourable foreign exchange rates, a decline of 15 million dollars in women’s shipments as well wholesale shipments totalling 12 million dollars which shifted to the first quarter of fiscal 2018.
Adjusted earnings per diluted share for fiscal 2017 were 2.04 dollars compared to 1.81 dollars in fiscal 2016. On a GAAP basis, net income was 14.5 million dollars or 0.95 dollar per diluted share, compared to a GAAP net loss of 7.3 million dollars or 0.49 dollar per diluted share, for fiscal 2016. Adjusted EBITDA totalled 57.2 million dollars or 6.6 percent of total revenues compared to 55.3 million dollars or 6.1 percent of total revenues, in fiscal 2016. Adjusted gross margin was 37.2 percent compared to adjusted gross margin of 35.8 percent in fiscal 2016.
"While the global retail landscape continues to be rapidly changing with major foreign currencies largely weakening against the US dollar and unpredictable and volatile global consumer spending, we believe that we have successfully navigated this environment having delivered a year of enhanced margins and profitability,” added George Feldenkreis, Executive Chairman, Perry Ellis International.
For fiscal 2018, the company expects total revenues in the range of 870 to 880 million dollars, taking a conservative view as retail store closures across the industry continue to be a consistent theme. Adjusted diluted earnings per share are expected in a range of 2.07 dollars to 2.17 dollars.
- Prachi Singh |
Net profit at the French luxury goods player Hermes reached 1.1 billion euros (1.2 billion dollars) in 2016, a 13 percent increase over the year ago period, AFP reports. The company said that this jump in net profit can be attributed a 14 percent increase in its leather goods and saddlery segment. The company’s revenues surpassed a 5 billion euro mark (5.3 billion dollars).
"Development was supported by the sustained pace of deliveries and production, gaining from the capacities of the three new sites in France,” the company stated in a statement announcing the annual results, added the report.
Hermes posts like-for-like sales rise of 7.5 percent
Like-for-like sales increased 7.5 percent to 5.2 billion euros (5.6 billion dollars), while operating income grew 10 percent to 1.7 billion euros (1.8 billion dollars). The group said, it reached an operating margin of 32.6 percent, due to a favourable impact of foreign exchange hedges.
Product segment-wise, while perfume sales rose nine percent, apparel sales were flat on last year and and watch sales slowed by 3 percent. However, the company reported rise in sales in all geographical regions.
The company has announced a dividend payment of 3.75 euros (4.04 dollars) per share, up from 3.35 euros (3.61 dollars) last year.
- Prachi Singh |
Revenues in the fourth quarter at J.Crew Group decreased 2 percent to 695 million dollars, while comparable company sales decreased 5 percent following a decrease of 4 percent in the fourth quarter last year. Total revenues for the whole year decreased 3 percent to 2,425.5 million dollars and comparable company sales decreased 7 percent following a decrease of 8 percent last year.
Commenting on the company’s performance, Millard Drexler, Chairman and CEO said in a press release, "While the overall retail environment remains challenging, we continue our disciplined management of expenses and inventory and remain focused on delivering the very best, iconic J.Crew and Madewell products our customers love across all channels. As a team, we are taking important steps to drive improved operational excellence across the company."
Fourth quarter results review
J.Crew sales decreased 5 percent to 572.6 million dollars and comparable sales decreased 7 percent following a decrease of 5 percent in the fourth quarter last year. Madewell sales increased 11 percent to 102.9 million dollars, while comparable sales increased 6 percent following an increase of 12 percent in the fourth quarter last year.
Gross margin was 34.7 percent compared to 33.3 percent in the fourth quarter last year. Operating income reached 15 million dollars compared to 6.3 million dollars in the fourth quarter last year and net income was 1.1 million dollars compared with a net loss of 7 million dollars in the fourth quarter last year. Adjusted EBITDA was 51.5 million dollars compared to 44 million dollars, same quarter last year.
J.Crew sales decline 6 percent in fiscal 2016
J.Crew sales decreased 6 percent to 2,018.1 million dollars, while comparable sales decreased 8 percent following a decrease of 10 percent last year. Madewell sales increased 14 percent to 341.6 million dollars, and comparable sales increased 5 percent following an increase of 8 percent last year.
Gross margin was 36.1 percent compared to 35.7 percent last year. Operating income was 49 million dollars compared with an operating loss of 1,320.2 million dollars last year. Net loss was 23.5 million dollars compared to 1,242.7 million dollars last year. Adjusted EBITDA was 188.5 million dollars compared to 203.4 million dollars last year.
For fiscal 2017, J.Crew Group expects total revenues to range from a decline at lower single digits to increase at lower single digits, comparable company sales are expected to decline between mid-single digits to lower single digit and adjusted EBITDA to range between 190 to 210 million dollars.
- Prachi Singh |
Lands' End net revenue for fourth quarter was 458.8 million dollars compared to 473.5 million dollars in the fourth quarter last year. Net loss was 94.8 million dollars or 2.96 dollars per share, compared to 39.5 million dollars or 1.23 dollars per share in the fourth quarter of fiscal 2015. Net revenue for fiscal 2016 was 1.34 billion dollars as compared to 1.42 billion dollars in fiscal 2015, while net loss was 109.8 million dollars or 3.43 dollars per share compared to 19.5 million dollars or 0.61 dollars per share, for the same period last year.
Commenting on the company’s results, Jerome Griffith, Chief Executive Officer, said in a statement, "We saw sequential improvement in our fourth quarter results, attributable to recent initiatives across merchandising, marketing and e-commerce. Overall, we will be focused on enhancing the business in ways that will drive growth, profitability and shareholder value over the long-term."
Fourth quarter financial highlights
Direct segment net revenue decreased 2.6 percent to 398.5 million dollars and retail segment net revenue decreased 6.3 percent to 60.3 million dollars, which the company said were primarily due to fewer Lands' End Shops at Sears and a 1.7 percent decrease in same store sales.
Gross margin was 38.6 percent compared to 42 percent in the fourth quarter last year. Adjusted net income, excluding a 173 million dollars or 107.8 million dollars after-tax non-cash impairment charge related to the write-down of the Lands' End trade name, was 13 million dollars or 0.41 dollar per share. Adjusted EBITDA was 30.7 million dollars compared to 48.1 million dollars for fourth quarter fiscal 2015.
Full year results review
Direct segment net revenue for the full year decreased 5.4 percent to 1.15 billion dollars, while retail segment net revenue decreased 8.9 percent to 186.4 million dollars due to a 6 percent decrease in same store sales and a reduction in the number of Lands' End Shops at Sears.
Gross margin was 43.2 percent this year compared to 46 percent last year. The company said, net loss for fiscal 2016 also included 1.2 million dollars in non-recurring personnel costs, net of reversals, primarily related to the departure of the company's former Chief Executive Officer. Adjusted net loss, excluding a 173 million dollats or 107.8 million dollars after-tax non-cash impairment charge related to the Lands' End trade name and the final reversal of the product recall accrual, was 2.1 million dollars or 0.06 dollar per share.
Adjusted net income, excluding a 98.3 million dollars or 62 million dollars after-tax non-cash impairment charge related to the write-down of the Lands' End trade name and the 3.4 million dollars benefit from the reversal of a product recall accrual, was 40.4 million dollars or 1.26 dollars per share for fiscal 2015. Adjusted EBITDA was 39.8 million dollars compared to 107.3 million dollars in fiscal 2015.
Picture:Land's End website
- Vivian Hendriksz |
London - While most established fashion houses would never dream of packing their bags and relocating to another city, for leading Parisian design collective Vetements moving their business to Zürich and starting off with a "clean slate" was much welcomed decision - and not solely for any tax reasons.
Chief Executive of Vetements, Guram Gvaslia said to BoF that his brother, Demna Gvasalia, Creative director at Vetements and Artistic Director at Balenciaga, sees the city as a "clean slate", which the brand was looking for. "We could not grow in Paris," explained Guram Gvasalia, CEO of Vetements to Swiss newspaper Tages-Anzeiger (TA) last month. “Paris kills creativity. Its environment with the ‘bling bling’ is destructive. I’m done with the whole showing-off in fashion and the superficial glamour.” In addition, the purity of the city (in terms of fashion) appealed to him, as well as the city's location, making it an ideal travel hub for Gvasalia.
Why Vetements relocated its head office to Zürich
Vetements has successfully relocated its head office from Paris and Dusseldorf to Zürich's Binz quarter and relocated 40 of its employees, according to TA. The rest of the team is set to follow on and make the move by the end of the summer. In addition, Demna Gvasalia has already moved into his new home by Lake Zürich.
Of course there are also a few monetary links tied to the relocation of Vetements as well. Switzerland has established itself as a tax haven for multinational companies over the years due to its advantageous tax regime which sees companies with foreign businesses receive favoured treatment. Leading fashion companies such as the Gucci Group have established their headquarters in the country, where also other companies such as Philipp Plein, Guess and Hugo Boss all have set up supply chain hubs in the country's southern region.
"Taxes are obviously another reason for the move,” said Guram Gvasalia to TA. “But not the most important one — otherwise we would have moved to Zug.” Zug, a neighbouring municipality to Zürich, is considered to be a long-time rival of Zürich in terms of offering special tax agreements. The move sees Vetements paying less taxes in Zürich than in Paris, although Gvasalia maintains there are other motives behind the move as well.
For example, Switzerland is also much more open to immigrants than France. For a company which employs people from all over the world, being able to bring in new designers is vital. "It takes 9 months to transfer a new employee to France,” pointed out Gvasalia. In addition the city home to its own small, yet vibrant fashion scene, one which Gvaslia hopes to expand on. "My goal is to put Zürich on the world map as a fashion city," he said to TA. "And my dream is that Switzerland will be linked to fashion in the future."
Homepage photo: By chensiyuan (chensiyuan) [GFDL ( http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 4.0-3.0-2.5-2.0-1.0 ( http://creativecommons.org/licenses/by-sa/4.0-3.0-2.5-2.0-1.0)], via Wikimedia Commons
Other photos: Vetements Fall 2017, by Gio Staiano
- Angela Gonzalez-Rodriguez |
ANALYSIS Canada Goose started trading on both the New York Stock Exchange and the Toronto Stock Exchange (TSX) o March,16 after launching the biggest IPO to date this year.
The maker of Arctic luxury apparel began trading on TSX last Thursday under the symbol TSX:GOOS, materialising the IPO year-to-date 2017 on the Canadian stocks exchange. The Toronto-based business went public with its shares opening at 18 US dollars on the New York Stock Exchange.
Shares closed the day up more than 25 percent, slightly above 16 US dollars, marking the second biggest IPO debut of 2017. Portfolio Management Corp Managing Director Norman Levine said the surge in Canada Goose shares did not surprise him, but he wondered whether they would remain at that level. "The history of new issues is not good in Canada," he said in a note to market echoed by NASDAQ.
It’s worth recalling that Canada Goose priced its initial public offering of 20 million shares at 17 Canadian dollars apiece (circa 12.78 US dollars), according to a source familiar with the matter quoted by the CNBC. That price was above an initial expected range of between 14 – 16 Canadian dollars.
Canada Goose stock closes first day of trading up by over 25 percent
The IPO raised 340 million Canadian dollars, or about 255 million US dollars.
"TSX is extremely proud to welcome Canada Goose to the market. Made in Canada and an iconic global brand, TSX is pleased to support the company as they enter their next phase of growth," said Ungad Chadda, President, Capital Formation, Equity Capital Markets, TMX Group.
"At TMX, we love seeing great Canadian companies create global consumer brands - and our role is to help them access the capital and liquidity they require to execute their strategies and drive their future success. We congratulate Canada Goose on their IPO and global leadership position."
According to market experts, investors in Canada Goose have the confidence that the retailer can grow international sales of its flagship coats, and that it can expand into new products, said Bruce Winder, partner and co-founder of Toronto-based consultancy Retail Advisors Group.
“Investors have to be careful because there’s always that first day of trading halo,” Winder said. “The jackets across the world will work. It’s more about the other things and how much they are banking on that,” said Winder.
Looking ahead, the company plans to expand into markets including knitwear, footwear, hats and gloves as well as travel gear and bedding in the coming years, according to the deal prospectus. Canada Goose’s CEO Dani Reiss said in an interview with Bloomberg that it will do so thoughtfully, to avoid the brand dilution seen at other retailers that expanded too quickly.
Picture:Corey Joseph for Canada Goose, Canada Goose Web