The US PVH Corp., which owns the brands Tommy Hilfiger, Calvin Klein and the lingerie brands Warner’s, Olga and True & Co, was able to increase sales in the second quarter of 2023 by four percent to EUR 2.03 billion (EUR 2.21 billion). US dollars) – currency-adjusted by two percent. The previously released forecast was in the low single digits.
Earnings were different: Earnings before interest and taxes (EBIT) on a GAAP basis were 131.6 million euros (143 million US dollars) compared to 163 million euros (177 million US dollars) in the same period last year. The company completed €184 million (US$200 million) in share repurchases in the second quarter, doubling full-year buyback plans to up to €368 million (US$400 million).
The sales growth is due to the positive development of the two divisions Tommy Hilfiger and Calvin Klein. There was growth in international business, particularly in the Asia-Pacific region. In China, for example, by more than 20 percent in local currency, as a continued recovery after the lifting of the COVID restrictions in the fourth quarter of 2022. Sales also grew in Europe, as well as in the North American home market, especially direct sales there. The losses were primarily attributable to the wholesale business, because retailers are still acting cautiously.
Tommy Hilfiger is growing, Calvin Klein is declining in its home market
With a total of six percentage points, Tommy Hilfiger in particular was able to increase sales compared to the previous year to 1.05 billion euros (1.14 billion US dollars) – currency-adjusted by three percent. International growth, at six percent, exceeded growth in North America, where four percent was achieved.
Calvin Klein sales increased 3 percent to 865 million euros ($940.2 million), or 2 percent at constant currency, compared to the same period last year. In contrast, the brand’s international business grew by 11 percent, while Calvin Klein North America posted a 9 percent drop in sales, mainly due to a decline in the wholesale business.
Warehouses could be dismantled
In terms of warehousing, the situation at PVH has eased. Inventory levels rose by six percent compared to the same period last year. However, this increase is in line with the projected revenue growth and reflects an improvement compared to the 24 percent increase in the first quarter of 2023.
Stefan Larsson, Chief Executive Officer, commented on the results: “We have another strong quarter at Calvin Klein and Tommy Hilfiger, driven by the disciplined execution of our long-term growth plan, the PVH+ plan. We have achieved double-digit revenue growth in our direct-to-consumer business – both in-store and in e-commerce – by relentlessly focusing on driving brand desirability through product, consumer engagement and market execution.”