PVH(US:PVH)2024-08-27 20:19Revenue Performance - Second quarter revenue decreased 6% to $2.074 billion compared to $2.207 billion in the prior year period, in line with guidance[1] - Full year revenue outlook reaffirms a projected decrease of 6% to 7%, including a 2% reduction from the sale of the Heritage Brands women's intimates business[13] - Third quarter revenue is projected to decrease 6% to 7% compared to the third quarter of 2023, with GAAP EPS expected to be approximately $2.30[16] - Net sales for the quarter ended August 4, 2024, were $1,965.1 million, a decrease of 6.7% compared to $2,105.2 million for the same quarter last year[27] - Total revenue for the six months ended August 4, 2024, was $4,026.2 million, down from $4,364.9 million in the prior year, reflecting a decline of 7.7%[27] - Total revenue for the quarter ended August 4, 2024, was $2,074.3 million, a decrease of 5.9% compared to $2,207.0 million for the quarter ended July 30, 2023[41] - Total revenue for Tommy Hilfiger International was $770.0 million, reflecting a 6.0% decrease compared to $818.8 million for the same period last year[49] - Total revenue for Calvin Klein International was $611.9 million, down 2.2% from $625.4 million year-over-year[49] Earnings and Profitability - GAAP EPS for the second quarter was $2.80, exceeding guidance of approximately $2.25, while non-GAAP EPS was $3.01, also above guidance[1] - Net income for the quarter was $158.0 million, significantly higher than $94.2 million in the same quarter last year, representing a year-over-year increase of 67.8%[27] - Diluted net income per share for the quarter was $2.80, compared to $1.50 for the same quarter last year, marking an increase of 86.7%[27] - Non-GAAP net income for the quarter was $170.2 million, compared to $124.4 million in the same quarter last year, marking a 36.8% increase[32] - Earnings before interest and taxes for the quarter increased to $173.9 million, up from $143.3 million in the same quarter last year, reflecting a growth of 21.0%[27] - The company reported a pre-tax income of $154.8 million for the quarter, compared to $119.7 million in the same quarter last year, an increase of 29.3%[27] - Total earnings before interest and taxes for the company reached $379.0 million, with a decrease of $5.3 million due to adjustments[46] Cost Management and Expenses - Selling, general and administrative expenses for the quarter were $1,083.3 million, down from $1,138.5 million in the prior year, a decrease of 4.8%[27] - The company is focusing on a multi-year initiative to simplify its operating model, which includes a cost reduction strategy aimed at reducing headcount costs by approximately 10% by the end of 2023[25] - The company plans to bring in-house most of the product categories that are or had been licensed to G-III Apparel Group, Ltd., which is expected to enhance operational efficiency[25] - SG&A expenses for the quarter were $1,083.3 million, down from $1,138.5 million in the previous year, a decrease of 4.8%[33] Debt and Cash Flow - The company has significant levels of outstanding debt, which may impact its ability to operate as intended, highlighting the importance of managing cash flows effectively[25] - Interest expense is projected to decrease to approximately $70 million compared to $88 million in 2023, primarily due to prior debt repayment[15] - Cash and cash equivalents increased to $610.0 million from $372.8 million year-over-year, showing a 63.7% rise[39] - Total liabilities decreased to $11,237.7 million from $11,542.4 million, reflecting a reduction of 2.6%[39] Future Outlook - The company expects a GAAP net income per common share of $11.20 to $11.45 for the full year 2024, with non-GAAP earnings guidance of $11.55 to $11.80[54] - The estimated revenue decrease for 2024 is projected to be between 6% to 7% on a GAAP basis, with a similar decrease expected on a constant currency basis[56] - The operating margin on a non-GAAP basis is estimated to be approximately 10.1% for 2024[55] - The company emphasizes the importance of constant currency revenue information to assess business performance excluding foreign exchange impacts[48] Segment Performance - Tommy Hilfiger North America net sales were $296.2 million, down from $297.6 million in the previous quarter, representing a decline of 0.5%[41] - Calvin Klein North America net sales increased slightly to $269.7 million from $269.9 million, showing a marginal decrease of 0.1%[41] - Tommy Hilfiger International net sales decreased to $750.8 million from $800.2 million, a decline of 6.2%[41] - Calvin Klein International net sales decreased to $597.9 million from $610.3 million, a decline of 2.0%[45] - Total Calvin Klein revenue for the quarter was $1,817.1 million, down from $1,827.9 million, a decrease of 0.7%[45] - Heritage Brands Wholesale net sales significantly dropped to $50.5 million from $127.2 million, a decline of 60.3%[45] - Royalty revenue for the total company increased to $87.7 million from $80.1 million, an increase of 9.9%[45] - Advertising and other revenue for the total company was $21.5 million, slightly down from $21.7 million, a decrease of 0.9%[45]