Yahoo Finance Strong Calvin Klein Performance Boosted PVH’s Fiscal 4Q15 Results
Calvin Klein Helped PVH Close Fiscal 2015 in Style
Snapshot of PVH’s performance in fiscal 4Q15
Total revenue for Phillips-Van Heusen’s (PVH) fiscal 4Q15 ending January 31, 2016, stood at $2.1 billion, registering a rise of 2.1% compared to fiscal 4Q14.
The rise in PVH’s top line in 4Q15 was driven by a ~15% rise in Calvin Klein’s revenue, offset by ~2% fall in Tommy Hilfiger’s revenue and a ~10% fall in Heritage Brands’ revenue.
A look at profitability and margins
PVH recorded an improvement in its earnings and profitability during fiscal 4Q15. Earnings before interest and taxes (EBIT) for the quarter rose 7% on a constant currency basis compared to $203 million in 4Q14, driven by the following:
a 31% rise in the Calvin Klein business’s earnings, driven by higher operating margins in Europe and the strong performance of the underwear business
an 11% rise in the Heritage Brands business’s earnings, mainly on account of its shutting down the Izod retail business, which was operating at a loss
an 11% earnings fall in the Tommy Hilfiger business on a constant currency basis, due to the weakness in North American business
After including the impact of foreign currency exchange rates, PVH’s EBIT fell 10% year-over-year to $182 million in fiscal 4Q15.
Comparing profitabilities
After including the negative impact of exchange rates, the company’s EBIT margin stood at 8.3% for the quarter. PVH’s fiscal 4Q15 EBIT margin is lower than those of most of its peers.
Hanesbrands (HBI) and VF Corporation (VFC) reported operating margins of 11.2% and 11.6%, respectively, while Michael Kors (KORS) and Coach (COH) displayed even higher margins of 29% and 20%, respectively, during their last-reported quarters.
Investors wanting to get exposure to PVH can consider pooled investment vehicles such as the First Trust Large Cap Value AlphaDEX ETF (FTA), which invests 0.74% of its portfolio in PVH.
Read the next article to learn about PVH’s performance in fiscal 2015.
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