CK Is Not High Enough To Sell In China.

According to the trend that Calvin Klein tends to be stable in the three quarter and Tommy Hilfiger continues to be strong, the US clothing giant PVH Corp. (NYSE:PVH) has raised its annual profit target.
Thanks to the steady double-digit growth in Europe, Calvin Klein's three quarter revenue stopped the two quarter's decline, a slight increase of 0.5% to 968 million 900 thousand US dollars, a fixed exchange rate increase of 3%, an increase of 10% in Europe and additional income after the acquisition of Australian business together to offset the decline in the Greater China region and the North American market. International and North American same store sales decreased by 2% and 4% respectively.
Tommy Hilfiger revenue rose by 9.8% to $1 billion 243 million 900 thousand per year, excluding the increase in the exchange rate, which was 12%. In the European market, international net sales and same store sales rose 20% and 8% respectively. North American net sales were only offset by wholesale sales being offset by the same store sales.
The total revenue of PVH Corp. in the three quarter was US $2 billion 587 million 700 thousand, an increase of 2.5% over the same period last year of 2 billion 524 million 500 thousand, and the market was expected to be US $2 billion 540 million. Net profit fell from $243 million 100 thousand last year or EPS 3.15 US dollars to 209 million 200 thousand US dollars or EPS 2.82 US dollars; adjusted EPS was US $3.10, slightly better than the 3 US dollars expected.
The chairman and CEO Emanuel Chirico said in the earnings report that the current holiday season needs to continue to face a competitive environment and a widely promoted retail environment. It is expected that the global macroeconomic and geopolitical turmoil will continue to bring against the wind. He pointed out that the same store sales and profit margins were disappointing in the three quarter, and the trend is expected to continue.
Emanuel Chirico also revealed that the Hongkong market, which accounted for more than 1% of the group's revenue and lucrative, slumped 40% in the three quarter, and was particularly vulnerable to the penetration of Hongkong's Calvin Klein business. During the period, the group made additional brand work for Sino US tensions in the mainland, and about one thousand small shoppers surveyed showed that their brand acceptance of Calvin Klein and Tommy Hilfiger remained unchanged. "We do not see any potential negative reaction from Chinese consumers to the US brand," he said in response to analysts' questions.
As for the decline of Calvin Klein in the mainland, Emanuel Chirico explains that as the first batch of high-end brands in the region, the positioning of Calvin Klein's non luxury brands and the huge sales network have reduced passenger flow, and the same store sales have not been able to reverse the downtrend. Even if the digital platform shows strong growth, it is not enough to offset the decline of the entity.
Emanuel Chirico also pointed out that double eleven China has strong sales and Tommy Hilfiger performance exceeds expectations. Thanks to the promotion of digital business, the Chinese mainland market has continued to improve.
PVH Corp. raised the target of adjusted EPS from US $0.20 to US $9.43-9.45, and the negative impact of tariffs is still $0.20 per share.
The world's largest luxury group LVMH Mo t Hennessy Louis Vuitton SE (LVMH.PA) Lu Wei Ming Xuan's acquisition of Tiffany & Co. (NYSE:TIF) Tiffany's $16 billion 200 million transaction has made the market focus once again on the fashion and luxury industry's M & A activities. Emanuel Chirico said that the current good financing environment and the group's sound balance sheet support their merger and acquisition in 2020, but the potential acquisition target may persist in valuing adherence.
PVH Corp. (NYSE:PVH) shares were volatile on Tuesday, rising 3.5 percentage points on the top and 2.4% in the morning. Ike Boruchow, an analyst at Wells Fargo, maintained a "win win" rating, and raised the target price from $95 to $115.