PVH tops Q3 estimates with 18% decrease in revenues

By

Robin Driver

Published
Dec 3, 2020

As it continues to recover from the economic effects of the Covid-19 pandemic, PVH Corp., the New York-based owner of Tommy Hilfiger and Calvin Klein, announced an 18% decline in its third-quarter revenue on Wednesday, a significant sequential improvement compared to decreases in the last two quarters, which were heavily impacted by the health crisis.
 

For the third quarter ended November 1, 2020, total revenues at the company came to $2.12 billion, down from $2.59 billion in the prior-year period. In constant currencies, the year-over-year decrease was 21%.
 
Direct-to-consumer revenue fell 11%, a figure which included a 70% increase in e-commerce, fueled by strong digital growth across all of the company’s regions and brands. Although both Europe and China saw strong recovery in the quarter, reduced numbers of international tourists in the U.S. meant that this market – where the group runs a number of brick-and-mortar stores in tourist hotspots – continued to struggle.

Wholesale revenues for the quarter fell 22%, a decline which was driven by issues in the company’s North America wholesale business, some of which were related to the bankruptcies of several of its customers.
 
The Tommy Hilfiger brand posted a 12% decrease in its revenues, reflecting a 37% decline in North America and flat international sales. At Calvin Klein, the year-over-year decrease was 18%, with the brand’s North American revenues falling 39%, while international sales remained flat.
 
PVH’s quarterly earnings totaled $69.8 million, or $0.98 per share, down from $209.2 million, or $2.82 per share, in the prior-year period.
 
“Our third quarter results exceeded our expectations across all markets and channels, with a very strong recovery in Europe and China, considering the ongoing Covid-19 pandemic,” said PVH chairman and CEO Emanuel Chirico in a release. “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 towards these channels and categories.”
 
Year to date, PVH’s revenues totaled $5.04 billion, decreasing 31% from $7.31 billion in the same period in the previous year. Net loss was $1.08 billion, or $15.15 per share, compared to a net profit of $484.7 million, or $6.46 per share, in the prior-year period.
 
To date, the company’s Q4 revenue is running down approximately 20%, and PVH currently expects this to be the total percentage decrease for the whole quarter.