PVH Corp (PVH) reported a 155% jump in earnings for the first quarter helped by broad-based strength across its businesses globally as well as strong momentum in its Tommy Hilfiger and Calvin Klein businesses. Revenue and EPS exceeded Street’s expectations. The apparel maker raised its earnings guidance for fiscal 2018.
With revenue increasing 16% to $2.31 billion, earnings climbed 155% to $179.4 million or $2.29 per share. On a non-GAAP basis, EPS grew 43% to $2.36. Both GAAP and non-GAAP EPS included a $0.20 positive impact related to foreign currency translation.
Revenue benefited from continued momentum in its Tommy Hilfiger and Calvin Klein businesses. Calvin Klein business revenue grew 18% helped by outstanding performance in Europe and Asia as well as strong wholesale performance across all categories. Comparable store sales rose 5% at Calvin Klein North America and 9% at Calvin Klein International.
Tommy Hilfiger and Calvin Klein businesses’ strength drove PVH earnings higher.
Revenue in the Tommy Hilfiger business surged 21% on continued strong performance across all International regions and channels as well as strong performance in the North American wholesale business. Comparable store sales rose 9% both in Tommy Hilfiger North America and Tommy Hilfiger International.
Revenue in the Heritage Brands business rose 5% principally due to a shift in the timing of shipments into the first quarter from the second quarter as compared to the prior year periods. Comparable store sales increased 1%.
Looking ahead into fiscal 2018, PVH lifted its EPS guidance to a range of $8.81-$8.91 from the previous estimate of $8.76-$8.86, and its non-GAAP EPS outlook to a range of $9.05-$9.15 from the prior forecast of $9.00-$9.10. Both the estimates included a reduced positive impact of $0.12 related to foreign currency translation compared to $0.35 previously expected. The company now expects revenue to increase about 6% compared to the prior forecast of about 7%.
For the second quarter, the company sees EPS of $1.98-$2.03, non-GAAP EPS of $2.05-$2.10 and revenue growth of about 10%.
“We are pleased to increase our earnings guidance for the year, despite the continuing volatility in the macroeconomic and geopolitical environments, which is resulting in a significantly lower foreign currency benefit than previously planned for the year,” executive chief Emanuel Chirico said.
During the first quarter, PVH repurchased 400,000 shares of its common stock for $54 million under the $1.250 billion stock repurchase program authorized by the board through June 3, 2020.
Shares of PVH ended Wednesday’s regular trading session up 0.25% at $155.50 on the Nasdaq. The stock had been trading between $102.05 and $163.78 for the past 52 weeks. Despite the strong results, the stock dipped about 1% after the bell.
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