PVH Corp., formerly known as the Phillips-Van Huesen Corporation, has announced income and revenue gains. Benefitting from robust international operations, the company’s outlook for the fiscal year 2021 anticipates higher freight and other logistics costs in the second half, attempting to mitigate delays of approximately four to six weeks for certain orders. However, no greater supply chain disruptions have been predicted afterwards.
An upgraded outlook is being provided despite continued uncertainties due to the COVID-19 pandemic, without taking in regard any new temporary closures of significant stores and new or existing lockdowns.
While the revenue levels for the international businesses have exceeded and continue to exceed 2019 pre-pandemic values for the remainder of 2021, the businesses in North America are expected to remain challenged, as international tourism – a significant contributor of the regional revenue – is not predicted to significantly bounce back this year.
Gross margins shall continue to reflect improvements in 2021, as compared to last year, due to less promotional sales and a favourable shift in the regional sales mix.
Increment projections for revenue in 2021 are from 26 to 28 per cent, compared to 2020. Sales revenue for the second quarter ending on 1 August – increased by 46 per cent, amounting to US $ 2.31 billion, compared to 2020.
Primarily driven by Europe, the company incurred strong performance gains within its international businesses in 2021, despite extensive temporary store closures in the prior-year period which resulted in significantly reduced capacities for the remainder quarters.
DTC (Direct-to-consumer) revenue for the second quarter increased 19 per cent on Y-o-Y basis. However, digital commerce revenues remained flat despite exceptionally strong growth in 2020 due to store closures and occupancy restrictions. 77 per cent increment was observed in wholesale revenue, driven by strong performance in Europe.
For the second quarter, wholesale revenue increased 77 per cent, driven by Europe as well. Additionally, the company experienced a significant increment in its sales to the digital businesses of its traditional and (pure-play) wholesale customers.
The overall sales gain reports 41 per cent Y-o-Y increase in the TH (Tommy Hilfiger) Business, including 40 and 45 per cent increment in the Tommy Hilfiger International revenue and the Tommy Hilfiger North America revenue, respectively.
Revenue for the Calvin Klein business rose to 56 per cent, as compared to the prior-year quarter – including 47 and 75 per cent rise in the Calvin Klein International revenue and the Calvin Klein North America revenue, respectively.
Heritage Brands also rose in revenue by 37 per cent in the same period.
Net quarterly income was US $ 181.8 million, with a comparative net loss of US $ 51.7 million, for the year 2020. Earnings before interest and taxes (EBIT) for the quarter was US $ 279 million, compared to an interest and taxes loss of US $ 2 million, for 2020.
Overall gross margin in the second quarter was 57.7 per cent as compared to 55.9 per cent in the prior-year period, with substantial improvements across all regions, primarily due to less promotional sales.
Additionally, inventory levels also remained lean, coming down to 13 per cent on Y-o-Y basis.
Stefan Larsson, Chief Executive Officer at PVH Corp., said, “We delivered another quarter of high-quality growth and strong performance above our guidance. This was driven by disciplined execution of our key strategic priorities, led by Calvin Klein and Tommy Hilfiger, and our international markets, focused on product strength and winning in the marketplace, supercharged by e-commerce. Our international performance was particularly strong, which performed above 2019 pre-pandemic levels. Based on our strong first half results, along with strong underlying trends, we are raising our full-year outlook, which continues to reflect gross margins above 2019 pre-pandemic levels and further improvement in our operating margin.”