Solid growth for Calvin Klein and Tommy Hilfiger in China
PVH Corporation has reported positive sales growth for Calvin Klein and Tommy Hilfiger China, its two largest brands.
Calvin Klein sales globally increased 5 per cent in the first quarter to US$756 million
But international sales (ie: outside North America) rose 11 per cent to $380 million, largely down to strong sales in China and Europe, the company reported.
Calvin Klein International same-store sales increased 3 per cent, while Calvin Klein North America revenue decreased 1 per cent. Pre-tax profit rose to $93 million, up $3 million quarter-on-quarter.
Tommy Hilfiger sales globally rose 6 per cent to $842 million, again aided by Europe, and the inclusion for the first time of a full quarter of revenue from the Tommy Hilfiger China operation of which PVH bought back a 55 per cent controlling interest in from its Chinese JV partner in April last year. International revenue increased 15 per cent to $524 million.
Tommy Hilfiger North America revenue decreased 5 per cent, principally due to a reduction of approximately $20 million resulting from the discontinuation of the company’s womenswear wholesale business in the US and Canada, which is now licensed to G-III Apparel Group. Pre-tax profit decreased from $206 million to $33 million, mainly due to the impact of a $153 million gain recorded the prior year to write-up the company’s equity investment in Tommy Hilfiger China and $54 million of costs incurred relating to a restructure of the company’s supply chain relationship with Li & Fung. There was also a $23 million decrease in costs incurred in connection with the China acquisition.
Heritage Brands business
Revenue in the Heritage Brands business for the quarter decreased 3 per cent to $391 million compared to the prior year period, principally resulting from a planned shift in the timing of shipments from the first quarter into the second quarter as compared to the prior year period. Same-store sales were flat. Pre-tax profit increased by $2 million to $32 million.
The Heritage Brands business encompasses the design, sourcing and marketing of apparel and accessories under the Van Heusen, Izod, Arrow, Speedo, Warner’s, Olga and True & Co brands.
PVH chairman and CEO Emanuel Chirico said the company continued to experience strong momentum in its Calvin Klein and Tommy Hilfiger businesses, which allowed it to exceed sales and earnings guidance for the first quarter despite a “volatile macroeconomic environment and the highly promotional retail market in the US”.