PVH Corp. reported strong financial results for Q4 and full year 2023, exceeding guidance on both revenue and earnings. Key highlights:
Q4 2023:
- Revenue flat YoY, up 1% constant currency
- Gross margin expanded 440 bps to 60.3%
- EBIT increased 40% to $301M; EBIT margin expanded 350 bps to 12.1%
- EPS increased over 50% to $3.72, exceeding guidance by $0.27
FY 2023:
- Revenue up 2% as reported, 1% constant currency
- Gross margin expanded 140 bps
- EBIT increased 9%; EBIT margin expanded 60 bps to 10.1%
- Record EPS of $10.68, up 19% YoY
The strong results were driven by iconic brands Calvin Klein and Tommy Hilfiger, and disciplined execution of the PVH+ Plan. Direct-to-consumer saw high-single digit growth in Q4, while wholesale was more challenged. Inventory ended down 21% YoY.
For 2024, PVH projects:
- Revenue down 6-7% as reported and constant currency, or down 3-4% comparable excluding Heritage Intimates sale and 53rd week
- Flat operating margins vs 2023
- EPS of $10.75 to $11.00, up low-single digits
- Continued focus on quality of sales in Europe, unlocking growth in North America and Asia
- SG&A efficiencies to fund investments and improve cost structure
Over the next few years, PVH sees a path to its 15% operating margin target through gross margin expansion and SG&A savings initiatives in technology, logistics, and operating model changes.
Regionally:
- Europe faces a tougher macro but PVH is focused on quality of sales to strengthen market position
- North America is unlocking profitable growth
- Asia continues as a growth engine
PVH remains confident in its multi-year plan and continues generating strong cash flow to return to shareholders. The company increased its share repurchase authorization by $2B and plans $400M of buybacks in 2024.