Dive Brief:
- Martijn Hagman, CEO of Tommy Hilfiger Global and PVH Europe is stepping down, according to a news release Tuesday.
- Hagman had been with the company for 16 years and moving forward he will serve in an advisory role to “facilitate a smooth transition.” Newly appointed global brand president of Tommy Hilfiger Lea Rytz Goldman will lead the brand and report directly to PVH CEO Stefan Larsson. The company has launched a search for a new leader of PVH Europe, and David Savman, chief supply chain officer, will take on the role in an interim capacity.
- The Calvin Klein and Tommy Hilfiger parent company announced the leadership change on the same day as its Q1 earnings for its 2024 fiscal year. It reported a 10% year-over-year revenue decrease to $1.95 billion for the period.
Dive Insight:
When PVH last reported earnings in April, it set a 2024 outlook with a revenue decrease of between 6% and 7%, due to “tougher macroeconomic backdrop,” particularly in Europe. It reaffirmed that outlook Tuesday. It expects Q2 revenue to decrease between 6% and 7% as well.
Q1’s 10% revenue decrease included a 3% drop due to the company’s divestment of its Heritage Brands women’s intimates business last November.
The company’s international revenue decreased 9% in Q1, but it stated “solid growth in the Asia Pacific region in local currency was more than offset by revenue decline in Europe.” North America revenue for both Calvin Klein and Tommy Hilfiger was up 3%.
DTC revenue increased 1%, while its wholesale revenue fell 17% year over year.
Tom Nikic of Wedbush said in an analyst note that while the overall revenue decrease was expected, the decline “is actually healthy,” referring to the quality sales initiatives in Europe. He also noted there were several areas of growth for the business, including in North America, Asia and DTC.
“It wasn’t the prettiest quarter we’ve ever seen, but we saw enough encouraging data points in Q1 to keep us constructive on PVH Shares,” Nikic wrote. “…Notably, margins were strong, which we feel is very important to the PVH story, as the multi-year margin expansion opportunity is highly compelling to us.”
By brand, Tommy Hilfiger revenue decreased 10% year over year, with the international business decreasing 14%. The revenue decline in Europe “weighs more heavily on the Tommy Hilfiger business,” the company said. By contrast, Tommy Hilfiger North America grew 2%.
Overall Calvin Klein revenue was flat for the period. International revenue for the brand fell 2%, while the North America segment saw revenue grow 4%.
These results mark a sharp contrast to each quarter of the last fiscal year’s results at Calvin Klein, when North America experienced declines but the international business saw growth.
Both brands are the subject of the PVH+ Plan, a strategy the company announced in 2022 that is meant to boost the desirability of Calvin Klein and Tommy Hilfiger and lead the company to $12.5 billion in revenue by 2025.
“Although we are still early in our journey to build Calvin Klein and Tommy Hilfiger into the most desirable lifestyle brands in the world, we are already creating some of the highest consumer engagement in the history of our brands,” Larrson said in the release. “We also continue to gain traction in all five PVH+ Plan growth drivers, with strong growth in key product categories and hero products with significant gross margin expansion. This is fueled by the build-out of our demand-driven supply chain and targeted growth investments, complemented by cost efficiencies from simplifying how we work.”