PVH Corp. (NYSE:PVH) Q3 2018 Earnings Conference Call Transcript

Nov 30, 2018 • 09:00 am ET


PVH Corp. (NYSE:PVH) Q3 2018 Earnings Conference Call Transcript


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Please standby. Good morning, everyone and welcome to the PVH Corp. Third Quarter 2018 Earnings Conference Call. This webcast and conference call is being recorded on behalf of PVH and consist 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 guided provided is on a non-GAAP basis and identified under SEC rules. Reconciliations to GAAP amounts are included in PVH's third quarter 2018 earnings release, which can be found on www.pvh.com and in the company's current report on Form 8-K furnished in the SEC in connection with the release.

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

Manny Chirico

Thanks, Jim. Good morning, everyone and thank you for joining me on the call. Mike Shaffer, our CFO and Dana Perlman, our Treasurer and Head of IR are also on the call. I'm pleased with our earnings performance in the third quarter, which exceeded our expectations, driven by the power of our diversified global business model. We continue to over deliver against our 2018 earnings plan and are raising our full-year earnings outlook based on our third quarter outperformance and are confidence in the opportunities for the fourth quarter despite the recent bankruptcies in the US and the UK and increasing geopolitical volatility around the world.

In the quarter, consolidated revenues grew 7% and 9% on a constant currency basis, while our earnings per share of $3.21 for the quarter was $0.08 above the top end of our guidance, despite a $0.06 unplanned charge relating to the Sears and the House of Fraser bankruptcy. This earnings beat was driven by the outperformance of our Tommy Hilfiger and Heritage brands businesses, partially offset by the underperformance of our Calvin Klein businesses. And I'll get into discussion about our three brands momentarily, but I think first let me touch on our regional performance.

Our international businesses continue to experience momentum, driven by strong growth in Europe where our performance has been outstanding. Our brands are very desirable and we are gaining share with both new and existing consumers. In Asia, our business performed well as a whole. I do want to note that while our Chinese business performed well and was ahead of plan, we have experienced some softer trends in traffic relating to a softening economy and the related trade concerns between China and the US. Despite this backdrop, we continue to see strong results out of China. I'm pleased to report that we continue to see healthy trends in our North American business, particularly in our wholesale businesses.

In our retail business, we are experiencing growth with our domestic consumers, particularly at Tommy Hilfiger, yet we continue to experience a slowdown in international tours traffic in the US relative to the strength we experienced in