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Key Takeaways
- Shares of PVH sank in premarket trading Wednesday, a day after the parent of Calvin Klein and Tommy Hilfiger reported a 6% year-over-year second-quarter revenue decline amid a “challenging consumer environment.”
- PVH’s sales were in line with estimates and it posted better-than expected profit.
- Struggling international sales in China and Australia led the company to affirm its full-year projections of a revenue drop between 6% and 7%.
Shares of PVH (PVH) sank in premarket trading Wednesday, a day after the parent of Calvin Klein and Tommy Hilfiger reported a 6% year-over-year second-quarter sales drop amid a “challenging consumer environment.”
PVH reported revenue of $2.07 billion, in line with analysts’ consensus estimate compiled by Visible Alpha, while its $158 million in net income was above expectation.
Weak International Sales Impacting PVH’s Revenue
PVH Chief Executive Officer (CEO) Stefan Larsson said the company faces an “increasingly challenging global macroeconomic backdrop,” leading PVH to affirm its full-year expectations of a 6% to 7% revenue decline from fiscal 2023.
The company said the Tommy Hilfiger and Calvin Klein brands saw a combined 1% rise in Q2 revenue in North America, but international sales slipped 4% as it faces a “challenging consumer environment” in its Asia Pacific operations, especially in China and Australia.
Still, PVH believes its plan to cut costs and improve its profitability is on track, lifting its full-year earnings per share (EPS) guidance to a range of $11.20 to $11.45 from $11.15 to $11.40. Third-quarter sales are projected to decline 6% to 7%, with EPS expected to slip to $2.30 from $2.66 last year.
PVH shares, which had slipped nearly 15% for the year through Tuesday’s close, were down a further 9% to $95.07 about 90 minutes before the opening bell Wednesday.