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Dive Overview:
PVH Corp. said in a press release on Tuesday that second-quarter revenue was $2.1 billion, down 6% from the same period a year ago, which was in line with the company's expectations. DTC revenue for the parent company of Calvin Klein and Tommy Hilfiger fell 5%, marking the first year-over-year decline in the channel since the fourth quarter of 2020, according to investment firm Wedbush. PVH attributed the decline to a soft consumer environment. The company's second-quarter revenue decline included a 3% decrease from the sale of its traditional intimate apparel business last year, part of a broader PVH+ plan to focus on its core brands and reach $12.5 billion in annual revenue by next year.
Dive Insights:
Following the press release, PVH shares fell 8% in the aftermarket. Wedbush's Tom Nikic attributed this to the negative DTC results and PVH's third-quarter revenue outlook being “below consensus,” with a 6% to 7% reduction.
PVH still expects revenue to fall 6% to 7% at the end of its fiscal year.
The company's international business declined 4% year-on-year, which the company attributed to a challenging consumer environment in the Asia-Pacific region, particularly China and Australia.
PVH is continuing to “strategically reduce” sales in Europe, which has been a weak spot in PVH's performance to date, as it seeks to “improve the overall quality of sales in the region.” CEO Stefan Larsson said in a press release that the company is on track with its sales plans in the region.
Strategic changes in Europe also contributed in part to a 9% decline in wholesale sales, the company said, which it said was primarily due to a 7% drop in its heritage brands business.
“With every step, we continue to strengthen the power of our products, consumer engagement and market execution, fueled by data and building a demand-driven supply chain,” Larson said in the release. “As we navigate an increasingly challenging global macroeconomic environment, we remain focused on delivering long-term growth that enhances the value of our brands.”
Tommy Hilfiger revenue fell 4 percent. The brand's international business declined 6 percent. A change in sales strategy in Europe had a greater impact on the Tommy Hilfiger brand, according to the release. Tommy Hilfiger's North American business increased 1 percent.
Meanwhile, Calvin Klein revenue fell 1%, with the brand's international business down 2%. Calvin Klein's North American business increased 1%.
PVH has launched a number of initiatives to support both of its core brands, naming a new global brand president for Tommy Hilfiger and a new president for the brand's North American operations within the past year.
Meanwhile, Calvin Klein has had some marketing success recently with a media campaign featuring “The Bear” actor Jeremy Allen White. The brand announced its second campaign with the actor on Tuesday.
The company will also relaunch Calvin Klein Collection next year after a five-year hiatus, hiring Veronica Leoni as creative director.
