The US clothing group PVH Corporation had to accept a slight decline in sales and a three-digit million loss in the third quarter of the 2022/23 financial year. Even so, the latest numbers the company released on Wednesday night beat market expectations. The share price of the parent company of Calvin Klein and Tommy Hilfiger then rose by more than eight percent in after-hours trading.
For the third quarter ended October 30, consolidated revenue was $2.28 billion, down 2 percent from the same period last year. Adjusted for exchange rate changes, however, revenues increased by seven percent.
At the Tommy Hilfiger label, sales shrank by four percent to 1.17 billion US dollars, currency-adjusted it grew by seven percent. The Calvin Klein brand was able to increase by one percent (currency-adjusted +4 percent) to 966.5 million US dollars, in the Heritage Brands division sales were 147.4 million US dollars and thus four percent below the corresponding previous year’s level.
Negative special effects burden the result
The development of earnings was shaped by numerous one-off factors. The group had to make an unexpected value adjustment of 417 million US dollars in the past quarter. The bottom line was therefore a reported net loss of 186.7 million US dollars (179.0 million euros), after a surplus of 279.7 million US dollars had been achieved in the same quarter last year. Adjusted for all special items, net income was $169.5 million. It missed the corresponding level of the previous year by almost twelve percent, but was well above the expectations of the analysts.
CEO Stefan Larsson was satisfied with the figures presented: “We achieved a currency-adjusted increase in sales in the high single-digit percentage range. This was above our expectations despite ongoing macroeconomic headwinds,” he said in a statement. The company now only expects a drop in sales of three percent for the current financial year, which corresponds to the “upper end” of the previous forecast.
The group extends its license partnerships with G-III
At the same time, the group announced that it was terminating its licensing partnership with textile manufacturer G-III Apparel Group Ltd. extended again. The corresponding licenses, which include in particular the wholesale business with women’s fashion of the two main brands Calvin Klein and Tommy Hilfiger in North America, would now gradually expire between 2025 and 2027 under the new agreement, PVH explained. After that, the group intends to take over the relevant business areas on its own. This solution is in line with the long-term strategic goal of realizing the “full potential” of the two labels in North America, explained CEO Larsson in a statement.