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PVH posts sales decline in Q4, projects positive outlook

By Prachi Singh

31 Mar 2021

Fourth quarter revenue at PVH Corp. decreased 20 percent or decreased 23 percent on a constant currency basis to 2.090 billion dollars compared to the prior year period. Loss per share on a GAAP basis was 81 cents compared to 93 cents in the prior year period and loss per share on a non-GAAP basis was 38 cents compared to earnings per share of 1.88 dollars in the prior year period.

Commenting on the results, Stefan Larsson, the company’s Chief Executive Officer, said: “We delivered fourth quarter revenue in line with expectations despite more extensive lockdowns in Europe, as we successfully navigated the uncertainty and unprecedented impacts caused by the pandemic to drive towards an accelerated recovery. We executed disciplined expense management, significantly improved our inventory position, and ended the year with over 3 billion dollars in liquidity.”

Review of PVH’s fourth quarter results

The company said in a release that the revenue decrease was due to a 16 percent or 20 percent decrease on a constant currency basis in the Tommy Hilfiger business, including a 28 percent decrease in Tommy Hilfiger North America revenue and a 10 percent or 17 percent decrease on a constant currency basis in Tommy Hilfiger International revenue.

Consolidated revenue decrease was also driven by a 17 percent or 20 percent decrease on a constant currency basis in the Calvin Klein business including a 25 percent decrease in Calvin Klein North America revenue and a 10 percent or 16 percent decrease on a constant currency in Calvin Klein International revenue.

The company witnessed a 41 percent decrease in the Heritage Brands business compared to the prior year period, which included a 17 percent decline resulting from the sale of the company’s Speedo North America business.

The company added that earnings before interest and taxes on a GAAP basis for the quarter were 26 million dollars compared to a loss before interest and taxes of 96 million dollars in the prior year period, while earnings before interest and taxes on a non-GAAP basis decreased to 28 million dollars compared to 150 million dollars in the prior year period.

Highlights of FY20 results of PVH Corp.

The company said, revenue for 2020 decreased 28 percent to 7.133 billion dollars or decreased 29 percent on a constant currency basis compared to 2019. Loss per share on a GAAP basis was 15.96 dollars for 2020 compared to earnings per share of 5.60 dollars in 2019, while loss per share on a non-GAAP basis was 1.97 dollars compared to earnings per share of 9.54 dollars in 2019.

The revenue decrease was due to a 23 percent decrease in the Tommy Hilfiger business, including a 41 percent decrease in Tommy Hilfiger North America revenue and a 13 percent decrease in Tommy Hilfiger International revenue.

There was a 28 percent decrease in the Calvin Klein business, including a 43 percent decrease in Calvin Klein North America revenue and a 16 percent decrease in Calvin Klein International revenue. The company also reported a 44 percent decrease in the Heritage Brands business compared to 2019, which included a 12 percent decline resulting from the sale of the company’s Speedo North America business.

Revenue for 2020 included a 69 percent increase in sales through the Company’s directly operated digital commerce businesses, driven by strong growth in all regions and brand businesses, which partially offset the decline in revenue through its other distribution channels.

Loss before interest and taxes on a GAAP basis for 2020 was 1.072 billion dollars compared to earnings before interest and taxes of 559 million dollars in 2019 and loss before interest and taxes on a non-GAAP basis was 37 million dollars compared to earnings before interest and taxes of 931 million dollars in 2019.

PVH expects 2021 revenue to increase by 22 to 24 percent

The company further said that revenue in 2021 is projected to increase 22 percent to 24 percent or increase 19 percent to 21 percent on a constant currency basis as compared to 2020. The company currently projects that 2021 earnings per share on a GAAP basis will be approximately 5 dollars compared to a loss per share of 15.96 dollars in 2020 and earnings per share on a non-GAAP basis will be approximately 6 dollars compared to a loss per share of 1.97 dollars in 2020.

Revenue in the first quarter of 2021 is projected to increase 42 percent to 44 percent or increase 34 percent to 36 percent on a constant currency basis compared to the prior year period. First quarter earnings per share on a GAAP basis are expected to be in a range of 28 cents to 31 cents compared to loss per share of 15.37 dollars in the prior year period. The company currently projects that first quarter 2021 earnings per share on a non-GAAP basis will be in a range of 80 cents to 83 cents compared to loss per share of 3.03 dollars in the prior year period.

Image: Tommy Hilfiger, Facebook