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PVH Sees ‘Green Shoots’ in North America Despite Lack of Tourists

·2 min read

Stephen Larsson, chief executive officer of PVH Corp., took Wall Street analysts on a tour of the company’s global business on Thursday, pointing to market share gains in Europe, investments in China and “green shoots” at home.

PVH reported a four-fold increase in third-quarter net profits, to $279.7 million, and a 10 percent revenue bump to $2.3 billion, late Wednesday and Larsson expanded on the results on a conference call.

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The company also boosted its adjusted earnings outlook for the year, up to $9.25 per share from the $8.50 previously projected, however, investors were looking for something more. Shares of PVH traded down 4.1 percent to $100.77 for the day.

But Larsson is looking to the long term and plans to lay out his broader vision for the future at the company’s first investor day in over a decade in April.

For now, the CEO pointed to signs of strength at both Tommy Hilfiger and Calvin Klein and said PVH, which recently sold its Heritage Business to focus on its power brands, as well as progress around the world. His callouts by region included:

• North America: Despite a lack of tourism, which drove up to 40 percent of North American revenue before the pandemic, and continuing supply chain troubles, Larsson said, “There are some early green shoots.”

“I remain very encouraged about the multiyear opportunity to unlock a sustainable, increasingly profitable business for both brands,” he said. “Given the lack of tourism due to COVID-19, our teams are leaning into our accelerated recovery priorities with a much increased focus on the domestic consumer, particularly with the Gen Z and Millennials, and driving toward an increased product strength with pricing power and supercharging e-commerce while winning in the whole marketplace in a balanced and sustainable way.”

• Europe: Larsson said the company was continuing to gain market share in Europe with double-digit gains for both Tommy Hilfiger and Calvin Klein compared with before the pandemic, a boost that was accompanied by better gross margins.

“The region’s strong results highlight how we are successfully meeting the consumer through a digitally led omnichannel approach and continuously elevating the brand positioning through having the best hero products in the market for both Tommy and Calvin,” Larsson said.

• Asia: Results in the region were led by outperformance in China versus the company’s plan.

“In Asia, we continue to invest in driving growth and building awareness for our brands, focusing on key consumer moments, strengthening product storytelling for key categories and hero products and enhancing the consumer experience in our stores,” he said.

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