Following yesterday’s release of PVH Corp’s figures for the three months ending 1 August 2023; Alice Price, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “PVH’s second quarter results will come as somewhat of a relief to the business, as performance continues to improve with revenue up 3.5% to reach $2.2bn, reaffirming its full year outlook of an increase of 3% to 4%. PVH attributes its improvements to its PVH+ Plan, which focuses on strengthening brand desirability, consumer engagement and enhancing its directly-owned digital operations. The performance of its direct-to-customer business is testament to this, with revenue up 11.3% and growth reported across all regions, offsetting the continued losses of its wholesale division, which declined by 3.2%. However, PVH is not out of the woods yet, with revenue remaining 6.6% down on Q2 FY2019/20, trailing behind competitors such as Hugo Boss, which reported sales up 52.0% versus 2019 for its Q2 (ending 30th June 2023), showing that PVH still has some way to go to regain its former fashion credentials.
“Tommy Hilfiger drove growth with reported revenue rising by 5.6%, but Calvin Klein also saw a promising uplift, with sales up 3.3%. Tommy Hilfiger and Calvin Klein both continued to experience international growth, with revenue up 3.2% and 9.0% respectively in constant currency, which PVH mainly owes to strong performance in APAC, particularly China, as consumer appetite recovers following the lifting of COVID-19 restrictions. North America, however, remains a thorn in PVH’s side, with Calvin Klein tracking 9.2% down on the year, as it fails to capture consumer attention in a tough macroeconomic market, with many consumers either trading down to cheaper brands or investing in more desirable ones. Although Tommy Hilfiger performed marginally better in North America than internationally, with revenue up 3.5% owing to its renewed focus on heritage styles to better resonate with the American consumer, its sales remain 22.4% behind FY2019/20 levels, with Calvin Klein down 23.0%, showing more work must be done to regain the brands’ influence in their home market.
“In order to lay the groundwork for recovery and return to its former glory, PVH must continue to focus on improving brand relevance and engagement. Tommy Hilfiger’s shift back to its trademark styles and preppy aesthetic is a step in the right direction, with its Fall 2023 campaign again honing in on its American heritage by incorporating the brand’s patriotic colour scheme, and also helping to widen its appeal across demographics through its family focus. Calvin Klein’s star studded Fall campaign featuring the likes of Kendall Jenner and Euphoria’s Alexa Demie should help boost its brand image among Gen Z’s, and it has also begun capitalizing on the power of TikTok to better connect with this target market. However, marketing alone is not enough to turn PVH’s brands around, and it should instead focus on improving its product offering, as standing out with a desirable and aspirational offer is integral to capturing consumer spend in the current economic climate.”
