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For 2H16, $PVH does not expect comp store sales trends in the US Retail business to improve. Specifically, the company is projecting its 2H16 comps to be at sustained level as 1H16 trends. For full-year 2016, non-GAAP EPS is expected to be $6.55-6.65, excluding the negative impact of FX with $1.60 EPS growth of 16-17% over 2015.
$PVH has redeemed its $700MM of its 4.5% senior notes due 2022, using the net proceeds from its offering of €600MM principal amount of 3.125% senior notes due 2027, which closed on Dec 21, 2017. $PVH had announced on Dec 6, 2017 that it had launched the offering of the 2027 Notes and delivered a Conditional Notice of Redemption for the 2022 Notes.
$PVH has commenced an offer to sell €500MM principal amount of senior notes due 2027. Net proceeds will be used to partly fund the redemption of all of its 2022 senior notes. Completion of the offering is subject to market and other conditions.
$PVH sees significant opportunities for its men’s and women’s sportswear in Europe in the coming quarters. Going forward, the company plans to make investments across the board, with special focus on e-commerce. Going by the current trend, PVH expects double digit sales growth for the Calvin Klein brand in the fourth quarter.
$PVH continues to focus on diversifying its distribution through initiatives involving business partners. Measures are afoot to strengthen the company’s own e-commerce platform and third-party channels. The heritage business is well positioned to achieve growth, and the company will be opening two international Calvin Klein stores In 3Q17.
$PVH attributed its strong 2Q17 performance to business growth in the international markets, mainly China, Europe and Japan, while the North American operations continued to face stiff competition. The company expects its enhanced brand marketing initiatives to drive market share gain in the second half of 2017, and thereafter.
$PVH expects its 3Q17 GAAP EPS to be in the range of $2.74-2.78 and non-GAAP EPS to be in the range of $2.88-2.92. Revenue is expected to be increase approx. 4%. Negatively impacting revenue in 3Q17, is the effects of the Mexico deconsolidation and the G-III license.
For FY17, $PVH boosted its earnings outlooks. The company expects its GAAP EPS to be in the range of $6.44-6.54, compared to $6.79 in FY16, and non-GAAP EPS to be in the range of $7.60-7.70, compared to $6.80 in FY16. Revenue is expected to increase approx. 6% when compared to FY16.
$PVH's revenue in the Calvin Klein business for 2Q17 rose 8% to $786MM. Revenue in the Tommy Hilfiger business rose 4% to $892MM and revenue in the Heritage Brands business rose 13% to $392MM, mainly due to shift in the timing of shipments. Comparable store sales increased 1%.
New York City-based apparel maker $PVH reported a rise in its 2Q17 profit, helped by strong performance of its brands. Net income rose to $119.7MM, or $1.52 per share, compared to $90.5MM, or $1.11 per share during the prior year period. Revenue rose 7% to $2.07Bil, up from $1.93Bil last year. Excluding items, $PVH earned $1.69 per share.
$PVH has entered into a new licensing agreement with Sports Products of America, a division of Adjmi Apparel Group, under which the Adjmi division will manufacture and sell women’s sportswear, golfwear and activewear under $PVH’s IZOD brand. Products will launch in February 2018. The initial term of the licensing agreement runs through 2020.
In 2Q17, $PVH expects revenue for the Calvin Klein business to increase about 6%, which includes the negative impact of the Mexico deconsolidation. Revenue for Tommy Hilfiger is projected to increase about 1%, which includes the negative impact of the G-III license. Revenue for the Heritage Brands business is projected to increase about 10%.
In 1Q17, $PVH’s Calvin Klein business revenues were ahead of guidance and up 6% on a constant currency basis versus 1Q16, excluding the negative impact of 1% related to FX. Revenues were negatively impacted by the deconsolidation of the Mexico business which was worth approx. $15MM. Calvin Klein International revenues grew 13% constant currency.
$PVH's Heritage business revenues declined 3% in 1Q17 principally resulting from a planned shift in timing of shipments. Comparable store sales were flat in the Heritage retail business. EBIT decreased slightly in the quarter due to the planned shift in shipments which offset the gross margin improvements in the business.