The US clothing group PVH Corporation suffered losses in sales and earnings in the third quarter of the 2024/25 financial year. Although results released Wednesday evening exceeded management expectations, the parent company of Calvin Klein and Tommy Hilfiger brands cut its full-year profit forecast.
In the most recent quarter, which ended on November 3rd, group sales amounted to 2.26 billion US dollars (2.14 billion euros). This meant that it missed the previous year’s level by five percent (-6 percent adjusted for currency effects), but did not shrink as sharply as had been forecast in advance. According to the company, two percentage points of the decline resulted from the sale of the three lingerie brands Warners, True & Co. and Olga in autumn 2023.
Both core brands are suffering sales losses in North America
Otherwise, losses in the two core brands in North America were responsible for the minus. Tommy Hilfiger’s quarterly sales fell by one percent (-2 percent in constant currency) to $1.20 billion. In North America it shrank by three percent to 349.8 million US dollars; in international business it remained almost unchanged at 851.1 million US dollars (-2 percent adjusted for currency effects).
At Calvin Klein, sales fell by three percent (-4 percent adjusted for currency effects) to $993.9 million. The increase of one percent (-1 percent adjusted for currency effects) to $652.1 million in international business was not enough to offset the nine percent decline to $341.8 million in North America.
In the Heritage Brand segment, revenue slipped 54 percent to $60.3 million, largely due to the sale of the lingerie division.
The group lowers its earnings forecast
Although the group was able to increase its gross margin, earnings before interest and taxes (EBIT) fell by 20.3 percent to $183.1 million due to the decline in sales and higher one-time charges. Adjusted for special items, it shrank by 4.9 percent to $236.5 million. Reported net profit amounted to 131.9 million US dollars (125.3 million euros), 18.4 percent below the level of the previous year’s quarter.
Although the current results were above expectations, management lowered its earnings forecast for the current financial year. It now expects earnings per share in the range of $10.55 to $10.70, up from previously forecasting $11.20 to $11.45. The group continues to expect a decline of six to seven percent in sales compared to the previous year.