Following today’s release of PVH Corp.’s figures for the full year to 29 January 2023; Louise Deglise-Favre, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Q4 FY2022 saw PVH’s return to growth after two disappointing quarters, with sales rising $59.0m to $2.5bn, allowing the group to exceed its guidance with full year sales declining only 1.4% on FY2021, compared to the 3% decrease it previously expected. This was due in part to consumer spending in Europe and the US holding up better than had been anticipated in the second half of 2022 despite high inflation rates. The strength of the dollar against foreign currencies continued to have a considerable impact on the group’s reported topline figures, as on a constant currency basis, FY2022 total revenue grew 5% and Q4 revenue rose 8%. While these results are positive, they pale in comparison to competitor Hugo Boss’ impressive constant currency sales growth of 27% for its FY2022 (ending 31 December 2022), due in part to Tommy Hilfiger’s stale brand image and lacklustre ranges.
“While North America continued to fuel PVH’s performance in FY2022, this was to be expected given that consumer confidence and spending has generally held up better in the US than in Europe. However, PVH has yet to regain its former glory in its home market, with Tommy Hilfiger and Calvin Klein’s sales remaining far behind FY2019 levels at -22.6% and -20.2% respectively.
“Tommy Hilfiger’s efforts to reach a younger shopper base have fallen flat so far, diluting its brand image and confusing consumers by releasing products which are geared towards Gen Z shoppers while it continues to be perceived as a brand catering to older Millennials. The brand should fully commit to refreshing its ranges towards a more casual offering and invest in a major marketing push, similar to that launched by Hugo Boss in early 2022 to effectively communicate its new direction to its target Gen Z shoppers. Calvin Klein’s focus on more essential categories such as underwear will continue to offer it some protection from the current macroeconomic climate, but it will have to emphasize its quality credentials and strong brand image to prevent consumers from trading down to cheaper alternatives as they continue to feel the pinch of high inflation. Looking forward to FY2023, PVH expects revenue to grow by a muted 3-4%, recognising the continued difficult trading environment as shoppers’ budgets continue to be squeezed by high inflation and the threat of recessions in European markets dampens consumer confidence.”
