On June 4, 2024, PVH Corp (PVH, Financial) released its 8-K filing reporting its first quarter results for 2024. PVH Corp, a global apparel company known for its Calvin Klein and Tommy Hilfiger brands, designs and markets branded apparel in over 40 countries. The company operates e-commerce sites, about 1,500 stores, licenses its brands to third parties, and distributes its merchandise through department stores and other wholesale accounts.
Performance Overview
PVH Corp reported a 10% decrease in revenue to $1.952 billion compared to the prior year period, which exceeded the guidance of an 11% decrease. On a constant currency basis, revenue decreased by 9%. The company's earnings per share (EPS) on a GAAP basis were $2.59, surpassing the guidance of $2.15. On a non-GAAP basis, EPS was $2.45, also exceeding the guidance of $2.15.
Key Financial Achievements
PVH Corp's gross margin increased by 350 basis points to 61.4%, reflecting benefits from a favorable shift in channel mix, a reduction in sales to lower-margin wholesale accounts, and lower product costs. The company also reported a 22% decrease in inventory compared to the prior year period, aligning with expectations and proactive inventory management.
Income Statement Highlights
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Total Revenue | $1.952 billion | $2.158 billion |
| Gross Profit | $1.198 billion | $1.250 billion |
| EBIT (GAAP) | $205 million | $199 million |
| EBIT (Non-GAAP) | $195 million | $199 million |
| Net Income | $151 million | $136 million |
| EPS (GAAP) | $2.59 | $2.14 |
| EPS (Non-GAAP) | $2.45 | $2.14 |
CEO Commentary
Stefan Larsson, Chief Executive Officer, commented, “We delivered on our revenue expectations, led by growth in our direct-to-consumer business, and beat our earnings guidance for the first quarter. We further strengthened our brand positioning and pricing power in the marketplace, and as planned we generated growth for Calvin Klein and Tommy Hilfiger combined in both North America and Asia Pacific in constant currency, while successfully driving strategic quality of sales initiatives in Europe.”
Financial Outlook
For the full year 2024, PVH Corp reaffirmed its projected revenue decrease of 6% to 7% and operating margin outlook of approximately flat compared to 10.1% in 2023. The company raised its full-year EPS guidance to a range of $11.15 to $11.40 on a GAAP basis and $11.00 to $11.25 on a non-GAAP basis, reflecting confidence in its execution of the PVH+ Plan despite a challenging macroeconomic environment.
Analysis
PVH Corp's performance in the first quarter of 2024 demonstrates its resilience and strategic focus on strengthening its core brands, Calvin Klein and Tommy Hilfiger. The company's ability to exceed earnings guidance and improve gross margins highlights effective cost management and a favorable shift in sales channels. However, the 10% decline in revenue indicates ongoing challenges in the global retail environment, particularly in Europe. The raised EPS outlook for the full year suggests confidence in continued operational efficiency and strategic initiatives.
For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from PVH Corp for further details.
