The US clothing group PVH Corporation presented unexpectedly good figures for the 2021/22 financial year on Tuesday evening. However, given the current uncertainties, the parent company of the Calvin Klein and Tommy Hilfiger brands was cautious about the prospects for the current year.
In the past fiscal year, which ended on January 30, the group’s sales amounted to 9.15 billion US dollars (8.21 billion euros). Compared to the previous year, it rose by 28 percent (currency-adjusted +26 percent). Thanks to a strong fourth quarter, the company was able to slightly exceed market expectations.
Both key brands contributed to the strong growth: Tommy Hilfiger sales increased 29 percent (up 27 percent at constant currency) to $4.70 billion, while Calvin Klein improved 39 percent (up 36 percent at constant currency) to 3.66 billion dollars.
Thanks to the significant increase in sales, PVH was again able to achieve a high surplus. Net income attributable to shareholders reached US$952.3 million (EUR854.1 million). For the year 2020/21, the group had reported a loss of 1.14 billion US dollars, not least due to high value adjustments. Diluted earnings per share last year were $13.25, or $10.15 after adjusting for special items.
However, the forecasts for the current year were cautious. The group expressly warned of the “considerable uncertainties due to the war in Ukraine and its broader macroeconomic effects, global inflationary pressure and the ongoing uncertainty due to the Covid 19 pandemic”.
Specifically, the management expects an increase in sales of two to three percent (currency-adjusted six to seven percent) compared to the previous year. The consequences of the separation from the Heritage Brands division and the temporary cessation of business activities in Russia are taken into account. Overall, the group expects the effects of the war in Ukraine to reduce sales growth by two percentage points.
Earnings are also likely to be significantly impacted by the situation in Russia and Ukraine. PVH expects diluted earnings per share to be just $9.00 for the current year. The company put the negative consequences of the Ukraine war at around 0.65 US dollars. However, unfavorable changes in exchange rates weigh even more heavily. The company said these would probably reduce annual earnings per share by about $0.70.