Strong performances by Calvin Klein and Tommy Hilfiger in China helped propel solid half-year and second-quarter sales and profit growth for parent PVH Corporation.
Chairman and CEO Emanuel Chirico said “better than expected” second-quarter results reflect the continued momentum and ongoing operating efficiencies across the company’s diversified business model.
“Our results reflect a planned increase of approximately $25 million of marketing compared to the prior year related to Calvin Klein and Tommy Hilfiger, which we believe will continue to drive market share gains and allow us to capitalise on the brands’ significant international expansion opportunities over the next several years.”
Global revenue from the Calvin Klein business for the second quarter increased 8 per cent year-on-year to $786 million. But Calvin Klein’s non-US sales soared 20 per cent thanks to an “outstanding performance” in the wholesale business in Europe and China, and solid growth in the retail business, the latter due to a 6 per cent increase in international comparable-store sales and square footage expansion in company-operated stores.
Calvin Klein North America revenue decreased 1 per cent.
Tommy Hilfiger revenue rose 4 per cent to $892 million, with international revenue up 9 per cent to $492 million, again driven by strong performances in Europe and Asia. But Tommy Hilfiger North America revenue was down 2 per cent to $400 million compared to the prior year period.
Consolidated group revenue was $2.1 billion, up 7 per cent year-on-year.
For the first half year, Calvin Klein sales rose 6 per cent, Tommy Hilfiger by 5 per cent and total group revenue by 5 per cent to $4.1 billion.
Earnings before interest and taxes for the first six months of 2017 was $392 million, inclusive of a $17 million negative impact due to foreign currency exchange rates, compared to $371 million in the prior year period.