PVH Corp. (NYSE:PVH) Q3 2017 Earnings Conference Call Transcript

Nov 30, 2017 • 09:00 am ET


PVH Corp. (NYSE:PVH) Q3 2017 Earnings Conference Call Transcript


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Good morning, everyone. And welcome to the PVH Corp's Third Quarter 2017 Earnings Conference Call. This webcast and conference call is being recorded on behalf of PVH and consists of copyrighted material. It may not be recorded, rebroadcast or otherwise used without PVH's written permission. Your participation in the question-and-answer session constitutes your consent to having anything you say appear on any transcript or replay of this call.

(Forward-Looking Cautionary Statements) Generally, the financial information and guidance provided is on a non-GAAP basis as defined under SEC rules. Reconciliations to GAAP amounts are included in PVH's third quarter 2017 earnings release, which can be found on www.pvh.com and in the Company's current report on Form 8-K furnished to the SEC in connection with the release.

At this time, I am pleased to turn the conference over to Mr. Manny Chirico, Chairman and CEO of PVH.

Manny Chirico

Thank you, Cynthia. Good morning, everyone. Joining me on the call is Mike Shaffer, our CFO, Dana Perlman, our Treasurer and Head of IR and Ken Duane, CEO of our PVH Heritage Businesses and our North America Wholesale Businesses.

I'm quite pleased with our results for the third quarter, which exceeded our expectations. We continue to over deliver against our strategic and financial plans. Overall, we saw third quarter revenues grow 5% and EPS increase 16%. We saw a tremendous strength across all of our businesses with our international businesses demonstrating outsized performance. Europe, China and Japan continue to be our healthiest markets in the third quarter. We saw improvements in our North America business, which performed in line with our plan, despite multiple natural disasters, particularly in Puerto Rico that impacted our retail businesses. Business trends in North America have continued to significantly improve as we've moved through the fourth quarter. Across channels, we continue to see outsized growth from the digital channel, consistent with our trends all year.

From a strategies perspective, we continue to invest in driving our brand relevance and our consumer reach through our increased marketing investment. And given our strong results, we have decided to invest an additional $20 million in brand marketing in the fourth quarter. Despite this $0.20 per share incremental expense, we are significantly increasing our earnings guidance for the year.

Moving to our third quarter results, let me begin with Tommy Hilfiger. The Tommy Hilfiger brand continues to experience significant demand, and we are seeing broad-based strength across all the businesses. The Tommy brand relevancy and momentum continues, leveraging our key influences from Gigi Hadid, our women's brand ambassador, to The Chainsmokers, our brand ambassador for all Tommy Hilfiger men's categories, and Shawn Yue, our local brand ambassador for China. We believe that investing in the Tommy Hilfiger brand via these brand ambassadors will continue to drive performance in our global growth categories. And additionally, by offering limited jeans capsules and unique collaborations, we are continuing to propel the brand forward, allowing us to engage with a new and younger consumer.

From a business perspective, Tommy