PVH(US:PVH)2024-06-04 20:20Revenue Performance - First quarter revenue decreased 10% to $1.952 billion compared to the prior year period, exceeding guidance of a decrease of approximately 11%[1] - Total revenue for the quarter ended May 5, 2024, was $1,951.9 million, a decrease of 9.5% compared to $2,157.9 million for the same period in 2023[24] - Revenue for Tommy Hilfiger North America was $271.4 million, up from $266.7 million, indicating a growth of 2.8%[37] - The total revenue for Calvin Klein was $133.0 million, up from $102.6 million, marking a growth of approximately 29.6%[38] - Tommy Hilfiger International revenue decreased by 14.0% to $716.6 million, while Total Tommy Hilfiger revenue decreased by 9.9% to $1,013.3 million[43] - Calvin Klein International revenue decreased by 1.9% to $601.5 million, with Total Calvin Klein revenue remaining relatively stable, decreasing only 0.1% to $886.8 million[43] - Owned and Operated Retail Stores revenue increased by 2.9% to $697.5 million, while Owned and Operated Digital Commerce revenue decreased by 6.5% to $148.4 million[43] Earnings and Profitability - GAAP EPS for the first quarter was $2.59, exceeding guidance of approximately $2.15, while non-GAAP EPS was $2.45, also exceeding guidance[1] - Net income for the quarter was $151.4 million, up from $136.0 million in the prior year, resulting in a diluted net income per share of $2.59 compared to $2.14[24] - Earnings before interest and taxes (EBIT) for the quarter was $205.1 million, an increase from $198.8 million in the same quarter last year[24] - The company reported a non-GAAP net income of $142.9 million for the quarter, with a diluted net income per share of $2.45 after excluding a pre-tax gain of $10.0 million related to the Heritage Brands intimates transaction[28][30] - The company reported a net income of $663.6 million for the full year 2023, with diluted net income per common share of $10.76 under GAAP[48] Cost Management - Selling, general and administrative expenses decreased to $1,017.3 million from $1,064.0 million year-over-year, reflecting a cost management strategy[24] - The company is undergoing a cost savings initiative aimed at reducing personnel costs by approximately 10% by the end of 2023[48] - Interest expense is projected to decrease to approximately $75 million compared to $88 million in 2023, primarily due to debt repayment[1] - The effective tax rate is projected to be approximately 20%, down from previous guidance of approximately 21%[1] Inventory and Asset Management - Inventory decreased 22% compared to the prior year period, aligning with proactive inventory management strategies[1] - Inventory levels decreased from $1,718.1 million to $1,346.8 million, a reduction of about 21.6%[35] - Total current assets fell from $3,353.2 million to $2,911.9 million, a decrease of about 13.1% year-over-year[35] - Total assets decreased from $11,491.2 million on April 30, 2023, to $10,788.7 million on May 5, 2024, representing a decline of approximately 6.1%[35] - Accounts payable and accrued expenses decreased from $1,924.7 million to $1,561.3 million, a decline of approximately 18.9%[35] Strategic Focus and Challenges - The company is focusing on divesting non-core assets, including the recent sale of the Heritage Brands women's intimate apparel business to concentrate on Calvin Klein and Tommy Hilfiger brands[24] - The company highlighted ongoing challenges such as inflationary pressures and supply chain disruptions affecting sales and profitability[24] - Future outlook remains cautious due to potential economic uncertainties and the impact of geopolitical events, including the ongoing war in Ukraine[24] Guidance and Outlook - Full year revenue outlook reaffirms a projected decrease of 6% to 7%, with operating margin expected to remain approximately flat compared to 10.1% in 2023[1] - EPS guidance for the full year is raised to a range of $11.15 to $11.40 on a GAAP basis, compared to previous guidance of $10.75 to $11.00[1] - The company expects a GAAP revenue decrease of 6% to 7% for the full year 2024, with a similar decrease projected for the second quarter[47] - Estimated GAAP net income per common share for 2024 is projected to be between $11.15 and $11.40, with a non-GAAP basis estimate of $11.00 to $11.25[46] - The impact of foreign exchange on revenue is expected to be a negative 1% for the second quarter of 2024[47] - The company recorded a pre-tax gain of $15 million related to the sale of the Heritage Brands women's intimates business in the first quarter of 2024[44]