PVH Group reports revenues down 8% year-over-year to $2.1 billion.
PVH, formerly Phillips-Van Heusen, is an American fashion company that owns the Calvin Klein and Tommy Hilfiger brands. The general manager, Trish Donnelly is leaving her position “to pursue other opportunities”, after less than two years with the group. But she is not the only one who will have to leave the group. Indeed, the company will also reduce its global workforce by 10% by the end of next year, explained CFO Zac Coughlin in a statement released Tuesday. The layoffs will be used to achieve annual savings of more than $100 million, the company said.
The conglomerate lowered its outlook for the year amid declining sales and profits in the second quarter. Revenue fell 8 percent from a year earlier to $2.1 billion, with wholesale down 11 percent, Tommy Hilfiger down 5 percent, Calvin Klein down 1 percent and Heritage Brands down 44 percent. Gross margin contracted slightly to 57.2% from 57.7% last year, and net income fell 36.6% to $115.3 million.
In the face of adversity
PVH beat earnings expectations in the second quarter, which Wells Fargo analysts attributed to its expense control. “A key part of our PVH+ plan is to increase productivity and invest for growth,” comments Coughlin before adding, “We are addressing this work by streamlining our organization, implementing new ways of working and leveraging our scale.”
PVH executives recognize that macroeconomic obstacles exist, noting in particular weak consumer demand due to inflationary pressures in both the United States and Europe. This is what the “PVH+ Plan” is supposed to address: it is a five-year strategy, focused on Calvin Klein and Tommy Hilfiger and relies on e-commerce sales growth and company-run physical stores.
“(…) This year’s performance will reflect consumers’ return to in-store shopping in most regions after an absence of several years, including closures at the height of the covid,” notes CEO Stefan Larsson. “However, we still expect the digital channel to have the strongest long-term growth trajectory over the next few years, across owned and operated and third-party e-commerce channels, and digital continues to account for about 25% of our revenue.”
PVH now expects its 2022 revenue to decline 4% to 3% year-over-year and operating margin to be around 9%.
Read also > PVH Fashion Group Reports Lower than Expected Quarterly Results
Featured photo : © Calvin Klein
