PVH Corp. beats expectations with strong Q3 driven by Calvin Klein and Tommy Hilfiger

PVH Corp., the parent company of iconic brands Calvin Klein and Tommy Hilfiger, has reported a strong performance in its third quarter, with overall revenue increasing by 2% to reach $2.294 billion. This positive momentum was largely attributed to the robust performance of its flagship brands, Calvin Klein and Tommy Hilfiger, both of which contributed significantly to the company's growth.

Delving into brand-specific results, Tommy Hilfiger saw a 1% rise in revenue, while Calvin Klein posted a 2% increase. However, it's worth noting that both brands experienced slight declines when analyzed on a constant-currency basis, indicating the impact of foreign exchange fluctuations on reported figures.

Regionally, PVH Corp. observed varied outcomes. Revenue in EMEA (Europe, Middle East, and Africa) grew by 4% year-over-year but faced a 2% decline on a constant-currency basis, primarily due to softer trends in both direct-to-consumer and wholesale channels. The Americas region demonstrated strength with a 2% revenue increase, primarily fueled by strong wholesale performance. Conversely, APAC (Asia-Pacific) revenue decreased by 1% but remained flat when adjusted for constant currency, suggesting underlying stability in the region.

Regarding sales channels, direct-to-consumer revenue remained flat compared to the previous year. Digital commerce revenue showed a modest increase of 1%. Wholesale revenue emerged as a significant growth driver, expanding by 4%, or 1% on a constant-currency basis, underscoring the importance of this channel to PVH's overall strategy.

One area that saw a decline was licensing revenue, which fell by 11%. This reduction was largely attributed to the strategic decision to transition certain women’s categories in-house, reflecting a shift in the company's operational approach for these product lines.

Stefan Larsson, Chief Executive Officer of PVH Corp., expressed satisfaction with the quarter's results, stating, “In the third quarter, we exceeded our guidance across reported revenue, operating margin and EPS, and delivered constant-currency revenue in line with expectations.” He further highlighted the success of the company's "PVH+ Plan," emphasizing how disciplined execution allowed them to leverage the iconic strength of Calvin Klein and Tommy Hilfiger. Larsson noted Calvin Klein's growth in key categories such as underwear and fashion denim, and Tommy Hilfiger's success in core lifestyle categories, particularly through its "Hilfiger Racing Club" campaign which elevated style icons.

Looking ahead, PVH Corp. has updated its full-year outlook, now anticipating revenue to increase in the low single digits. This narrows their previous guidance, which ranged from flat to low-single-digit growth. The company also reaffirmed its expectation for flat to slightly positive constant-currency revenue for the full year, indicating confidence in their underlying business performance.