PVH Corp., the parent of Speedo and Izod, reported first-quarter earnings that topped internal expectations, primarily driven by its Calvin Klein business.
Net earnings reached $114.1 million, or $1.37 a share, up from $35.3 million, or 42 cents, a year ago. Adjusted to exclude non-recurring items, earnings reached $1.50 a share against $1.47. The company's projected range has been $1.35 to $1.40. Revenues slid 4.3 percent to $1.88 billion.
By segment, Calvin Klein sales eased 1.7 percent to $653.9 million but increased 5 percent on a currency-neutral basis. The North America wholesale business saw modest growth, as an increase in sales to department stores more than offset a planned decline in sales to the off-price channel. The strong U.S. dollar negatively impacted international tourist spending. Calvin Klein’s International revenue increased 8 percent on a currency-neutral basis, driven by strength in Asia.
Tommy Hilfiger's revenue dropped 11.1 percent to $767.1 million and increased 1 percent on a currency-neutral basis. The U.S. gains were likewise impacted by the strong U.S. dollar.
In its Heritage Brands segment, which includes Van Heusen, Izod, Arrow, Speedo, Warner's, Olga and its licensed brands, revenues rose 5.1 percent to $458.3 million. The increase was principally driven by a shift in the timing of wholesale comp increase of 14 percent at Van Heusen.
“Looking ahead to the remainder of 2015, we are increasing our earnings guidance for the year, while continuing to take a prudent approach to planning our business, as foreign currency and global consumer spending remain unpredictable and volatile,” said Emanuel Chirico, chairman and CEO, on a conference call with analysts.
Excluding the negative impact of about 30 cents per share from foreign currency headwinds, EPS on a non-GAAP adjusted basis in the second quarter is expected to increase 3 percent to 6 percent versus the prior year’s quarter. Revenues are projected to be relatively flat on a currency-neutral basis and decline approximately 8 percent on a GAAP basis.