American clothing group PVH Corp., Calvin Klein and Tommy Hilfiger's parent company, has published better quarterly results than expected as turnover grew 3 % excluding exchange rate fluctuations.
Expensive dollar impacts group twice
PVH Corp.'s total turnover dropped 4 % from 1.871 billion dollars to 1.785 billion dollars (1.629 billion euro) in its first quarter. The expensive dollar is the biggest culprit for the drop, a culprit which has impacted the company twice: on the one hand, there is the exchange into dollar from the international turnover and on the other hand there has been a "negative impact on the spending of international tourists in the United States", CEO Emanuel Chirico said. Excluding these exchange rate fluctuations, there is a decent 3 % turnover increase.
Especially Calvin Klein's performance was excellent: a 5 % underlying growth gives the brand a 653.9 million dollar (596.9 million euro) turnover, which is 4 % lower than in the same period last year when it reached 665.3 million dollars. Its American growth was limited to 2 % (and worth 338.8 million dollars), its international business went up 8 % to 315.1 million dollars - considering level exchange rates. The like-for-like turnover in its own retail channels grew even more, 10 %.
Affiliate brand Tommy Hilfiger struggled a it: its total quarterly turnover dropped 2 % from 862.4 million dollars to 767.1 million dollars (700.25 million euro). Its underlying growth was a mere 1 %. Split up, its American revenue reached 353.9 million dollars, while the rest of the world brought in 413.2 million dollars.
Heritage Brands, which is only active in the United States and mainly the wholesale branch, had a 5 % turnover growth, from 436 million dollars to 458.3 million dollars (418.36 million euro).
Forecast adjusted upward
"We are very pleased with our first quarter results, which exceeded our first quarter guidance, driven by the strength of our Calvin Klein business. [...] A strong U.S. dollar negatively impacted that excellent result", CEO Emanuel Chirico said.
The CEO is moderately optimistic about the remainder of the year: "Looking ahead to the remainder of 2015, we are increasing our earnings guidance for the year, while continuing to take a prudent approach to planning our business, as foreign currency and global consumer spending remain unpredictable and volatile."