Talking about 2020 first quarter, PVH commented: “We have gone through an unprecedented downturn in revenues and profits”. Not to mention that the second quarter is going to get even worse, as estimated by the group. “In our history, over nearly 140 years – remarked Emanuel Chirico, President and Chief Executive Officer – we have been successfully facing several economic and geopolitical challenges. That is why I am confident we will manage to overcome the current crisis”.
An unprecedented downfall
At the end of the period, from February 1 until May 3, the overall revenues of PVH, which control, among others, Tommy Hilfiger and Calvin Klein, amounted to 1.334 billion dollars, that is, -43% at current rates of exchange and -42% at fixed rates of exchange, on annual basis. Focusing more specifically on the group’s brands, Tommy Hilfiger earnings decreased by 39% at current rates of exchange, while Calvin Klein revenues slumped by 46%; Heritage Brands went down by 47%. As regards earnings coming from selling stores, they decreased by around 50 to 65%, depending on the different areas.
As emphasized by PVH, the online channel positive trend (+47%) offset, to some extent, the retail loss. Looking at the overall results, the company’s quarterly loss reached 3.03 dollars per stock: for the records, last year PVH profits amounted to 2.46 dollars per stock.
As pointed out by the group in a press release, “In the stores we have reopened, sales have been dropping by around 25%, on a worldwide scale, throughout the second quarter of the year”. Considering such result, besides a number of shop closures, especially in North America, the group estimates that “downturn in revenues, in the period, will expectedly be even more remarkable, compared to the first quarter”.
Emanuel Chirico, President and Chief Executive Officer of PVH, stressed the fact that “resilience has been traditionally one of the company’s strong points. We have made a few proactive decisions to augment our cash assets and consequently enhance the financial standing of our businesses. More specifically, we have resolutely tackled operating costs and pinpointed the main efficiencies in the whole of the company; furthermore, we have reduced stocktaking levels and reconsidered capital allocation priorities. We are going to stand out thanks to an even stronger organization”.