By NEW YORK – PVH Corp. (NYSE:PVH), the parent company of Tommy Hilfiger and Calvin Klein, reported better-than-expected second quarter earnings and raised its full-year guidance, despite a decline in revenue.
Still, PVH stock was down nearly 5% in afterhours trading.
The apparel company posted adjusted earnings per share of $3.01 for the quarter, significantly surpassing the analyst estimate of $2.29. Revenue came in at $2.07 billion, in line with analyst expectations but down 6% YoY (5% decrease on a constant currency basis).
PVH’s strong earnings performance was driven by gross margin expansion of 250 basis points to 60.1%, reflecting benefits from a favorable shift in channel mix, reduced sales to lower margin wholesale accounts, and lower product costs. The company also reported a 12% decrease in inventory compared to the prior year period.
“We delivered on our top- and bottom-line commitments and beat our earnings guidance for the second quarter, led by our disciplined execution of the PVH+ Plan,” said Stefan Larsson, Chief Executive Officer.
For the full year 2024, PVH raised its adjusted EPS guidance to a range of $11.55 to $11.80, up from the previous forecast of $11.00 to $11.25. The company reaffirmed its projected revenue decrease of 6% to 7% compared to 2023.
The improved outlook is partly due to a tax benefit resulting from the favorable settlement of a multi-year audit in an international jurisdiction. PVH now projects an effective tax rate of approximately 16% for the full year, down from the previous guidance of about 20%.
Zac Coughlin, Chief Financial Officer, commented, “We remain relentlessly focused on driving efficiencies, maintaining cost discipline and simplifying how we work globally.”
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