Apparel-Seller PVH Lowers 2019 Outlook

By Aisha Al-Muslim

Apparel company PVH Corp. (PVH), whose brands include Tommy Hilfiger and Calvin Klein, lowered its revenue and adjusted earnings guidance for the full year.

For 2019, the company said revenue is expected to increase 3%, compared with its previous projection of 4%. The company also guided adjusted earnings per share of $10.20 to $10.30 for the year, down from its prior outlook range of $10.30 to $10.40 a share.

The adjusted earnings guidance includes the estimated negative impact of about 32 cents a share due to foreign currency translations.

"Further volatility in foreign exchange rates is expected to pressure our full-year earnings per share by an incremental $0.10 compared to our prior expectations," Chief Executive Emanuel Chirico said in prepared remarks. "As such, we believe it is prudent to factor this into our updated full-year earnings outlook."

The company's 2019 guidance assumes that two acquisitions will close in the second quarter, PVH said.

The first acquisition is of a 78% interest in Gazal Corp. that it doesn't already own. PVH Brands Australia Pty. Ltd., which licenses and operates businesses under various PVH brands, will come under the company's full ownership as a result of the acquisition.

The second is the company's pending acquisition of the Tommy Hilfiger retail business in Hong Kong and countries in Central and Southeast Asia from the company's licensee in those markets. The pending acquisitions are expected to add about $150 million of revenue in 2019.

For the second quarter, the company guided total revenue to be flat compared to a year earlier. The company also guided adjusted earnings per share of $1.85 to $1.90, compared with analysts' estimates of $2.42 a share.

"Looking ahead, the volatile and challenging macroeconomic backdrop has continued into the second quarter, with particular softness across the U.S. and China retail landscape," Mr. Chirico said.

The stock fell 8.2% to $91.10 in after-hours trading. Shares are down 36% in the last 12 months.

Earlier this month, PVH named the former chief executive of Ralph Lauren Corp. (RL) as its president. He is scheduled to take on the newly created position effective June 3. He will manage the company's branded business and regions.

Write to Aisha Al-Muslim at [e-mail]

(END) Dow Jones Newswires

May 29, 2019 17:16 ET (21:16 GMT)

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