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PVH posts Q1 profit, raises outlook

By Prachi Singh

Jun 3, 2021

Management

Image: Tommy Hilfiger, Facebook

First quarter revenue at PVH Corp. increased 55 percent to 2.079 billion dollar and increased 46 percent on a constant currency basis compared to the prior year period. Earnings per share on a GAAP basis was 1.38 dollars compared to a loss per share of 15.37 dollars in the prior year period, while earnings per share on a non-GAAP basis were 1.92 dollars compared to a loss per share of 3.03 dollars in the prior year period.

Commenting on the first quarter performance, Stefan Larsson, the company’s chief executive officer, said: “We are very pleased with our first quarter 2021 results, which significantly exceeded our expectations. Looking ahead, we are increasing our full year outlook despite continued uncertainty in the macro environment, as we navigate through the pandemic and related supply chain disruptions.”

PVH posts jump in Tommy Hilfiger and Calvin Klein revenues

The company said, revenue increase compared to the prior year period reflects a 63 percent or 52 percent increase on a constant currency basis in the Tommy Hilfiger business, including a 78 percent or 63 percent increase on a constant currency basis in Tommy Hilfiger international revenue and a 25 percent or 24 percent increase on a constant currency basis in Tommy Hilfiger North America revenue.

The company reported a 65 percent or 56 percent increase on a constant currency basis in the Calvin Klein business, including a 91 percent or 77 percent increase on a constant currency basis in Calvin Klein international revenue and a 27 percent or 26 percent increase on a constant currency basis in Calvin Klein North America revenue.

The overall results also include, a 9 percent increase in the Heritage Brands business compared to the prior year period, which includes a reduction of 14 percent resulting from the sale of the Speedo North America business in April 2020.

Review of first quarter results at PVH

The company added that direct to consumer revenue increased 66 percent, which included a 66 percent increase in digital commerce. The company’s wholesale revenue increased 53 percent, driven by strong performance in Europe, and included a significant increase in the company’s sales to the digital businesses of its traditional and pure play wholesale customers.

The company’s gross margin in the quarter was 59.1 percent compared to 49.5 percent in the prior year period.

Earnings before interest and taxes on a GAAP basis for the quarter were 197 million dollars compared to a loss before interest and taxes of 1.218 billion dollars in the prior year period and Ebit on a non-GAAP basis was 249 million dollars compared to a loss before interest and taxes of 247 million dollars in the prior year period.

PVH raises FY21 outlook

The company further said that revenue in 2021 is projected to increase 24 percent to 26 percent or increase 21 percent to 23 percent on a constant currency basis as compared to 2020.

The company currently projects earnings per share on a GAAP basis will be approximately 5.50 dollars compared to a loss per share of 15.96 dollars in 2020. The Company currently projects that 2021 earnings per share on a non-GAAP basis will be approximately 6.50 dollars compared to a loss per share of 1.97 dollars in 2020.

Revenue in the second quarter of 2021 is projected to increase 34 percent to 36 percent or increase 29 percent to 31 percent on a constant currency basis compared to the prior year period.

The company currently projects that second quarter earnings per share on a GAAP basis will be in a range of 79 cents to 82 cents compared to loss per share of 72 cents in the prior year period. Earnings per share on a non-GAAP basis are expected to be in a range of 1.15 dollars to 1.18 dollars compared to 13 cents in the prior year period.