PVH Corp, the parent of Speedo and Izod, reported fourth-quarter revenues inched 0.8 percent to $2.07 billion but grew 5 percent on currency-neutral (c-n) basis.
The revenue gain on a c-n basis was driven by a 6 percent increase at Calvin Klein to $702.7 million, and a 9 percent gain at Tommy Hilfiger, to $919.4 million. Calvin was boosted by strong momentum in its underwear business and overall strength in North America. Hilfiger’s North America business benefited from a shift in timing of shipments into the fourth quarter from the third quarter, combined with square footage expansion in company-operated retail stores.
The Heritage Brands segment (Van Heusen, Izod, Arrow, Speedo, Warner's and Olga) declined 3 percent to $96.1 million due to a poor performance in dress shirts. It owns the Speedo license for the North America and Caribbean regions.
Earnings in the quarter rose 23.6 percent on an adjusted basis to $147.1 million, or $1.76 a share, matching the top end of its earnings guidance. Net earnings reached $51.5 million, or 62 cents a share, against a loss of $37.5 million, or 46 cents, a year ago.
“Overall we were quite pleased with our fourth-quarter results which match the top end of our earnings guidance despite the highly challenging market environment and foreign currency headwinds,” said Manny Chirico, chairman and CEO, on a conference call with analysts.
Looking ahead, PVH expects EPS for this year to range between $6.75 to $6.90 on a non-GAAP basis, which reflects an expected $1.30 negative impact related to foreign currency exchange rates and pressures on the company’s Russia businesses. Excluding this negative impact, EPS on a non-GAAP basis is expected to increase 10 percent to 12 percent versus the prior year’s non-GAAP earnings per share of $7.30.
Revenue in 2015 is currently projected to increase approximately 3 percent on a c-n basis and slid 4 percent on a reported basis. On a c-n basis, sales are expected to expand 5 percent at Calvin and 3 percent at Hilfiger while sliding 4 percent at Heritage Brands.
Chirico said, “The strength of the U.S. dollar relative to other major currencies in which we conduct business and the volatile global macroeconomic environment is expected to have a significant negative impact on our 2015 results. Nonetheless, we expect that our global lifestyle brands, Calvin Klein and Tommy Hilfiger, will continue to demonstrate strong underlying performance globally.”
