PVH sales drop by 33 percent, expects 25 percent decline in H2 revenues

For the second quarter, PVH Corp said that the results exceeded the company’s expectations despite continued disruption from the Covid-19 pandemic with revenue decrease of 33 percent to 1.581 billion dollars compared to the prior year period. The company’s revenue through its digital channels grew over 50 percent, with sales through its directly operated digital commerce businesses up 87 percent compared to the prior year period. The company anticipates its second half revenue to decline approximately 25 percent.

Commenting on the results, Emanuel Chirico, the company’s Chairman and Chief Executive Officer, said in a statement: “Our second quarter revenue exceeded our expectations, reflecting better than expected performance in all our markets and channels. We continue to see outperformance in our digital businesses and across our comfort and casual assortments. As we head into the third quarter, trends in China and Europe continue to be very encouraging. However, our North America business continues to experience pressure due to the resurgence of Covid-19 cases and the lack of international tourist traffic coming to the U.S.”

Review of PVH’s second quarter results

The company said that total direct to consumer revenue declined 24 percent in the second quarter, which includes an 87 percent increase in digital commerce. In the third quarter to date period, direct to consumer trends have improved compared to the second quarter, with sales running down 15 percent compared to the prior year period, including continued strong growth in digital commerce.

The company added that the majority of wholesale customers’ stores globally were closed temporarily during the first month of the second quarter, resulting in a sharp reduction in shipments to these customers and an overall decline of 40 percent in its wholesale revenue. The company expects the revenue decline in its North America wholesale business will be significantly more pronounced than in Europe and Asia due, in part, to recent bankruptcies.

The company further said that the overall revenue decrease was due to a 28 percent decrease in the Tommy Hilfiger business, including a 51 percent decrease in Tommy Hilfiger North America and a 14 percent decrease in Tommy Hilfiger International, with China showing positive year over year results, a 32 percent decrease in the Calvin Klein business, including a 51 percent decrease in Calvin Klein North America and a 16 percent decrease in Calvin Klein International, with China showing positive year over year results and a 51 percent decrease in the Heritage Brands business compared to the prior year period.

Loss per share on a GAAP basis was 72 cents for the second quarter compared to earnings per share of 2.58 dollars in the prior year period, while earnings per share on a non-GAAP basis was 13 cents compared to 2.10 dollars in the prior year period. Loss before interest and taxes on a GAAP basis for the quarter was 2 million dollars compared to earnings before interest and taxes of 250 million dollars in the prior year period and earnings before interest and taxes on a non-GAAP basis for the quarter decreased to 49 million dollars compared to 232 million dollars in the prior year period.

PVH says Covid-19 disruptions impacted H1 sales and earnings

The company’s revenue for the first six months of 2020 decreased 38 percent to 2.925 billion dollars compared to the prior year period. The company said, revenue decrease was due to a 33 percent decrease in the Tommy Hilfiger business compared to the prior year period, including a 51 percent decrease in Tommy Hilfiger North America and a 23 percent decrease in Tommy Hilfiger International, a 39 percent decrease in the Calvin Klein business compared to the prior year period, including a 52 percent decrease in Calvin Klein North America and a 28 percent decrease in Calvin Klein International and a 49 percent decrease in the Heritage Brands business compared to the prior year period.

Revenue for the first six months reflected a 70 percent increase in sales through the Company’s directly operated digital commerce businesses driven by strong growth in all regions and brands, which partially offset the decline in revenue through its other distribution channels.

Loss per share on a GAAP basis was 16.12 dollars compared to earnings per share of 3.65 dollars in the prior year period, while loss per share on a non-GAAP basis was 2.90 dollars compared to earnings per share of 4.56 dollars in the prior year period. Loss before interest and taxes on a GAAP basis was 1.220 billion dollars compared to earnings before interest and taxes of 385 million dollars in the prior year period and loss before interest and taxes on a non-GAAP basis was 198 million dollars compared to earnings before interest and taxes of 499 million dollars in the prior year period.

Picture:Facebook/Tommy Hilfiger