PVH Corp. reported revenue in the third quarter decreased 18 percent to $2.118 billion or 21 percent on a constant-currency basis, a sequential improvement compared to the percentage revenue decreases in the prior two quarters.
The sales performance reflected a 12 percent decrease (16 percent decrease on a constant-currency basis) in the Tommy Hilfiger business compared to the prior-year period, with Tommy Hilfiger North America revenue down 37 percent and Tommy Hilfiger International revenue flat (down 6 percent on a constant-currency basis) compared to the prior-year period. The business in China continued to achieve positive year-over-year results.
An 18 percent decrease (21 percent decrease on a constant-currency basis) was seen in its Calvin Klein business compared to the prior-year period, with Calvin Klein North America revenue down 39 percent and Calvin Klein International revenue flat (down 4 percent on a constant-currency basis) compared to the prior-year period. The business in China continued to achieve positive year-over-year results.
The Heritage Brands business saw a 36 percent decrease compared to the prior-year period. Heritage Brands include Van Heusen, Izod, Arrow, Warner’s, Olga, and Geoffrey Beene.
Earnings per share on a GAAP basis were $0.98 for the third quarter of 2020 compared to $2.82 in the prior-year period. These results include the amounts for the applicable period that are excluded from earnings per share on a non-GAAP basis for these periods. Earnings per share on a non-GAAP basis were $1.32 for the third quarter of 2020 compared to $3.10 in the prior-year period.
PVH said third-quarter revenue and earnings exceeded the company’s expectations, driven by strong performance in Europe and China. The company’s revenue through digital channels grew 36 percent, with sales through its directly operated digital commerce businesses up 70 percent compared to the prior-year period
The company had over $2.7 billion of liquidity as of quarter-end, consisting of $1.5 billion of cash on hand and over $1.2 billion of available borrowings under revolving credit facilities
The company anticipates its fourth-quarter revenue and earnings will continue to be negatively impacted by COVID-19, although there is uncertainty due to resurgences throughout Europe and North America, the company currently expects revenue in the fourth quarter to decline approximately 20 percent compared to the prior year.
Commenting on these results, Emanuel Chirico, chairman and CEO, noted, “Our third-quarter results exceeded expectations across all markets and channels with a very strong recovery in Europe and China, considering the ongoing COVID-19 pandemic. It is clear where we are winning with the consumer — in our international businesses, across our digital channels and with casual assortments — and we increasingly are shifting our business toward these channels and categories.”
Chirico continued, “We have outperformed our Holiday season expectations in the fourth quarter to date, including Singles’ Day in Asia and our Black Friday promotions in North America and Europe, with particular strength across the digital channels. Although we are dealing with virus resurgences, including temporary store closures in parts of Europe, as well as brick & mortar traffic declines in North America, we are pivoting our businesses to capture where, and how, the consumer is shopping during this critically important holiday period. We believe that the accelerated investments we are making, from advancing our digital and omnichannel agendas and introducing new ways to engage our consumers, will benefit our businesses now and over the long-term.”
Stefan Larsson, president, added, “In a moment where we are experiencing unprecedented changes taking shape across the retail industry, our teams have continued to successfully navigate the pandemic and drive towards an accelerated recovery. Our focus remains to follow where the consumer is going, by supercharging our e-commerce, improving our product offering, and driving cost efficiencies across the company. As we lean into these priorities, we are also positioning PVH to drive sustainable profitable growth in the new normal coming out of the pandemic and beyond.”
Photo courtesy Tommy Hilfiger