PVH forecasts 2019 above estimates on Tommy Hilfiger boost

(Reuters) - Apparel maker PVH Corp on Wednesday forecast full-year adjusted profit and sales above Wall Street expectations, banking on higher demand for its Tommy Hilfiger branded apparels and accessories.

Slideshow ( 2 images )

Shares of the Calvin Klein owner, which also reported better-than-expected fourth-quarter sales and profit, rose 10 percent after the bell.

The New York-based company has been giving lesser discounts to maintain its premium brand cachet while roping in social media influencers such as Kendall Jenner, Shawn Mendes, and Zendaya to boost Tommy Hilfiger and Calvin Klein brands among millennial and Gen-Z shoppers.

PVH forecast full-year adjusted profit between $10.30 and $10.40 per share, the mid-point of which is above analysts’ estimate of $10.31.

The company also forecast full-year sales growth of 4 percent that translates to about $10.04 billion, above Wall Street estimate of $9.88 billion.

Sales at Tommy Hilfiger, the biggest contributor to PVH’s sales, rose 2.3 percent to $1.2 billion during the reported quarter. The company expects the brand’s sales to grow about 6 percent in full-year 2019.

“The quarter has been stellar. Tommy Hilfiger far outperformed our expectations,” said C.L King and Associates analyst Steven Marotta.

However, sales in Calvin Klein, its second biggest unit, fell 2 percent during the fourth quarter, dragged down by continued softness in the Calvin Klein Jeans business in North America.

The company had announced plans to restructure its Calvin Klein business and relaunch its upscale fashion business under the Calvin Klein 205W39NYC label in January after shoppers balked at higher prices and “fashion forward” products that resulted in underperformance of the brand last quarter.

PVH said it expects Calvin Klein revenue to grow about 2 percent this year.

Net income attributable to the company rose to $158.7 million, or $2.09 per share, in the fourth quarter ended February 3, from $108.5 million, or $1.39 per share, a year earlier.

Net revenue fell 0.6 percent to $2.48 billion as the year-ago quarter included an extra week.

Excluding items, PVH earned $1.84 per share.

Analysts on average had expected a profit of $1.76 on sales of $2.41 billion, according to IBES data from Refinitiv.

Reporting by Soundarya J in Bengaluru; Editing by Shailesh Kuber