Dive Brief:
- PVH Corp. promoted Donald Kohler to CEO of PVH Americas, the company’s CEO Stefan Larsson said in an earnings call Thursday.
- Kohler was previously president of Calvin Klein North America. In the call, Larsson said now all three of the company’s key regions have a regional CEO. In September, the company hired Fredrik Olsson as its new CEO of EMEA, the region consisting of Europe, the Middle East and Asia.
- The Calvin Klein and Tommy Hilfiger parent company announced the hire on the same day it reported revenue of $2.3 billion for the third quarter, representing a 5% year-over-year decrease, according to a press release Wednesday.
Dive Insight:
PVH’s revenue in North America for Q3 decreased 6% year over year. International business was flat, with growth in the Asia Pacific region offset by Europe, where PVH is reducing its sales.
DTC was flat year over year, and wholesale fell 8%, which PVH also attributed in part to strategic reduction of sales in Europe.
The Europe region had previously been a pain point for the apparel conglomerate, and its strategic reduction of sales in Europe is a move to boost the quality of sales in the region.
In the Q3 results release, CEO Stefan Larsson said the company was “gaining great traction” through the Europe sales initiative, which led to “increased sell-throughs and sequentially improved wholesale orders.”
PVH’s overall revenue decrease includes a 2% dip from last year’s sale of its heritage brands women’s intimates business. That sale was part of PVH’s years-long initiative to boost the value of its core brands, Calvin Klein and Tommy Hilfiger. It is also expected to help lead the company to $12.5 billion in annual sales by next year.
Tommy Hilfiger revenue fell 1% for Q3, with its international business remaining flat and North America sales dropping 3%. This marked the first time the Tommy Hilfiger North America business fell since the fourth quarter of 2020, according to BMO Capital Markets.
Meanwhile, Calvin Klein revenue decreased 3% year over year, with international revenue increasing 1% and North America revenue down 9%.
Zac Coughlin, CFO, said in the release that the company drove “solid profitability” in the third quarter by focusing on the execution of the company’s PVH+ plan.
“We continue to manage our business prudently by remaining agile and maintaining strong expense discipline,” Coughlin said. “Across the Company, we are focused on driving sustainable, profitable growth long-term by unlocking the full potential of our iconic brands, increasing quality of sales and generating cost efficiencies to deliver significant cash flow and attractive returns for our shareholders.”
For the fourth quarter, PVH expects revenue to decrease between 6% and 7% year over year.
The Q4 guidance was materially below consensus, said Simeon Siegel of BMO Capital Markets, who added that it was the lowest Q4 reduction ever seen from PVH.
“We expect this new bar will prove conservative, but this was lower than we’d have expected,” Siegel said in an analyst note.
PVH also reaffirmed its full-year revenue expectations, and projected a revenue decline of between 6% and 7%.
