Thanks to surprisingly good business in the final quarter, the US clothing group PVH Corporation was able to significantly exceed its annual forecast for 2022/23. The parent company of the Tommy Hilfiger and Calvin Klein brands had to report a decline in sales and profits compared to 2021/22 on Monday evening, but the losses were smaller than had been expected in advance. Because the company also set surprisingly optimistic goals for the current year, the share price rose by more than ten percent immediately after the current figures were published.
Group sales will fall by one percent in 2022/23
In the past fiscal year, which ended on January 29, group sales amounted to 9.02 billion US dollars (8.33 billion euros), one percent below the level of the previous year. Adjusted for exchange rate changes, revenues grew by five percent. The company had recently forecast a drop in sales of around three percent (currency-adjusted +4 percent) for the full year, but was able to achieve a surprising increase of two percent (currency-adjusted +8 percent) in the fourth quarter, so that annual sales were also higher than expected.
Revenues from the Tommy Hilfiger brand fell 1 percent to $4.66 billion, but were up 7 percent on a constant currency basis. The Calvin Klein label increased its sales by three percent (currency-adjusted +10 percent) to 3.78 billion US dollars. In the “Heritage Brands” segment, which includes the smaller group brands, revenues fell by 26 percent to 583.4 million US dollars, but this was mainly due to the fact that PVH had divested itself of some business areas in this area.
For the current year, PVH is forecasting growth in sales and earnings
The result was burdened by cost increases and negative special effects. At $470.7 million, earnings before interest and taxes (EBIT) were 56 percent below the level of the previous year. Net profit attributable to shareholders even fell by 79 percent to 200.4 million US dollars (185.1 million euros). Excluding one-off items, net income was $593.6 million, down 19 percent from 2021/22.
In the current 2023/24 financial year, however, the group now wants to grow again. Management forecast sales growth of three to four percent (currency-adjusted +2 to +3 percent). Earnings per share, which were $3.03 last year, are expected to increase to about $10.00.