PVH Corporation, a global apparel company, released its first quarter financial results for 2024 on 4 June 2024, showcasing a notable performance that exceeded market expectations despite a challenging economic environment. This article delves into the key financial metrics, geographical performance, sales channels, and distribution insights, alongside the company’s achievements in environmental, social, and governance (ESG) efforts.

Financial Performance Overview

PVH Corporation. reported a first-quarter revenue of €1.952 billion, a decrease of 10% compared to the previous year, but a 9% decline on a constant currency basis. Despite this drop, the revenue exceeded the guidance of an 11% decrease. The company’s earnings per share (EPS) on a GAAP basis were €2,59, surpassing the guidance of approximately €2,15. On a non-GAAP basis, the EPS was €2,45.
The gross margin improved significantly, increasing by 350 basis points to 61,4%, up from 57,9% in the prior year. This improvement was attributed to a favourable shift in channel mix, a reduction in sales to lower-margin wholesale accounts, and lower product costs. Additionally, the company’s inventory decreased by 22% year-over-year, reflecting proactive inventory management.

Geographical Performance

Regionally, PVH Corp. experienced varied performance across its markets. In North America, the combined revenue for Tommy Hilfiger and Calvin Klein saw a 3% increase compared to the previous year, driven by growth in both direct-to-consumer and wholesale businesses. Conversely, in Europe, a strategic reduction in revenue aimed at improving the overall quality of sales led to a decline. However, the Asia Pacific region recorded solid growth in local currency terms.

Sales by Channel and Distribution

PVH Corp.’s direct-to-consumer revenue increased by 1% year-over-year (3% on a constant currency basis), with owned and operated stores growing by 3% (5% on a constant currency basis). In contrast, the company’s digital commerce business faced a 6% decline (5% on a constant currency basis), primarily due to planned reductions in Europe. Wholesale revenue dropped by 17%, reflecting a cautious approach from wholesalers, especially in Europe, and the impact of the sale of the Heritage Brands women’s intimates business.

Brand Performance

Tommy Hilfiger and Calvin Klein remain the cornerstone brands for PVH Corp. Tommy Hilfiger’s revenue decreased by 10% (9% on a constant currency basis), with international revenue down by 14% (13% on a constant currency basis) and North America up by 2%. Calvin Klein’s revenue was flat year-over-year, with a slight increase of 1% on a constant currency basis. Notably, Calvin Klein North America grew by 4%, while international revenue was down by 2% (flat on a constant currency basis).

Summary and Future Outlook

Looking ahead, PVH Corp. reaffirmed its full-year revenue outlook, projecting a decrease of 6% to 7%, consistent with its strategic adjustments and market conditions. The company also raised its full-year EPS guidance, reflecting confidence in its PVH+ Plan and operational efficiencies. The focus remains on driving significant cash flow and delivering shareholder returns, as evidenced by the €200 million allocated for share repurchases in the first quarter alone.

ESG Achievements and Future Goals

PVH Corp. continues to prioritise sustainability and social responsibility, aligning with its long-term vision. The company’s ESG initiatives are structured around several key areas:

• Environmental Sustainability: PVH Corp. has committed to reducing its environmental footprint through responsible sourcing, sustainable product innovation, and operational efficiencies. The company aims to achieve significant reductions in greenhouse gas emissions, water usage, and waste generation across its supply chain.

• Social Responsibility: PVH Corp. places a strong emphasis on ethical labour practices, diversity, and inclusion. The company actively supports fair wages, safe working conditions, and empowerment programs for workers in its supply chain. Additionally, initiatives to foster diversity and inclusion within its workforce are integral to its corporate culture.

• Governance and Transparency: The company maintains robust governance structures to ensure accountability and transparency. This includes comprehensive reporting on ESG metrics, stakeholder engagement, and adherence to ethical business practices.

• Future Goals: PVH Corp. aims to further integrate circular economy principles into its business model. This involves designing products for longevity, promoting recycling and reuse, and advancing innovative solutions to minimise environmental impact.

PVH Corp.’s first quarter results for 2024 show its resilient performance and strategic focus. The company’s commitment to sustainable growth, operational efficiency, and shareholder value positions it well for future success. Further analysis could involve deeper insights into the impact of currency fluctuations, competitive positioning in key markets, and the long-term benefits of its ESG initiatives.

Read the full PVH Corporation report Here.

Cover Image Courtesy: Tommy Hilfiger, Facebook Page