The US clothing group PVH Corporation suffered severe losses in sales and earnings in the second quarter of the 2022/23 financial year. As a result, the parent company of the Tommy Hilfiger and Calvin Klein brands lowered its annual forecasts on Tuesday evening. The company also announced the departure of top manager Trish Donnelly.
For the most recent quarter ended July 31, PVH had consolidated revenues of $2.13 billion. The revenues fell short of the level of the same period of the previous year by eight percent. Adjusted for exchange rate changes, they remained largely unchanged. In addition to the generally difficult market conditions, the company primarily attributed the decline to the sale of significant parts of the Heritage Brands division and the effects of the war in Ukraine, which resulted in the cessation of business in Russia and Belarus, among other things.
Negative currency effects burden the results
Both main brands suffered from the negative currency effects. Tommy Hilfiger revenue fell 5 percent to $1.08 billion, but grew 4 percent on a constant currency basis. It was similar with Calvin Klein. Brand revenue fell 1% to $910.0 million (+6% at constant currency). Revenue in the Heritage Brands segment fell 44 percent to $143.5 million due to the sale of significant businesses.
As a result of the decline in sales as well as higher costs and negative special effects, the result also fell. Net income attributable to shareholders was $115.3 million, down 37 percent from the prior-year quarter. For the full first half, consolidated revenue was $4.04 billion, down four percent from the same period last year. Net income attributable to shareholders decreased 12 percent to $248.4 million.
In view of the latest development, the group announced further savings measures. The annual personnel costs are now to be reduced by more than 100 million US dollars. At the same time, the management lowered its forecasts for the current financial year: A drop in sales of three to four percent (currency-adjusted +3 to 4 percent) compared to the previous year is now expected. The earnings per share target was lowered to $7.64.
After Donnelly’s departure, PVH plans to appoint its own executives for the Americas business and the Calvin Klein brand
In addition to the current figures and forecasts, PVH also announced a personnel change. Accordingly, Trish Donnelly, who previously played a key role as CEO of PVH Americas & Calvin Klein Global, will leave the company to “pursue other career opportunities”. Until November 30, she should still be working for the group in an advisory capacity. The clothing supplier stated that it intends to separate the two positions in the future and to look for suitable candidates worldwide.
Until these are found, Group CEO Stefan Larsson will assume the relevant managerial duties on an interim basis, according to a statement. “We will greatly increase the opportunity to execute our PVH+ reform plan by separating these two roles and hiring managers with different skillsets who can focus fully on these critical positions,” Larsson said in a statement.