When it comes to measuring consumer engagement of Calvin Klein’s latest underwear campaign with Jeremy Allen White, PVH chief executive officer Stefan Larsson heads straight to the comments section.
“The consumer response has been incredibly positive,” said Larsson during an interview with WWD to discuss PVH’s second-quarter earnings. “Some of the comments I saw just on Instagram were ‘work should be canceled,’ ‘screaming,’ and ‘stopping the world again.’ That’s the kind of sentiment. We really struck a chord with Jeremy Allen White. It’s really, really powerful.”
The actor, best known for his Emmy Award-winning role as chef Carmen “Carmy” Berzatto in the comedy-drama series “The Bear,” this week returned for his second Calvin Klein denim and underwear campaign, with the company hoping to repeat the viral success of White’s spring 2024 one.
This, alongside Tommy Hilfiger tapping K-pop boy band Stray Kids for its fall campaign, is part of Larsson’s continuing long-term strategy to strengthen the two brands, even as the global consumer backdrop weakens.
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“What happened in Q2 was that we saw the North America, Asia consumer backdrop come down, and the consumer experiencing the pain of multiyear inflation, high interest rates,” said Larsson. “It doesn’t change anything in terms of our PVH Plus execution, because the PVH Plus plan is about building these incredible brands into their full potential in tough macro backdrops and in better macro backdrops. So our focus is on driving that consumer engagement and relevance, and continuously strengthening products.”
PVH’s net revenues fell 6 percent to $2.07 billion in its second quarter, compared to the prior year, but a touch above Wall Street forecasts, according to FactSet data. Within that, Tommy Hilfiger revenue decreased 4 percent, while Calvin Klein dipped 1 percent.
Earnings per share were $2.80, compared to $1.50 in the prior year period. Analysts had penciled in $2.29. PVH shares finished the day relatively flat at $104.46.
For the full year, PVH reaffirmed its projected revenue decrease of 6 percent to 7 percent, while its EPS forecast edged up to be in a range of $11.20 to $11.45, compared to $10.76 in 2023. Previous guidance was a range of $11.15 to $11.40.
“We drove revenue in line with guidance. We drove stronger than expected profitability and EPS,” said Larsson. “We did it in a tougher global customer backdrop, most visibly in North America and Asia, and particularly in China, where we saw the trajectory change over the course of the quarter.”
Internationally, revenue decreased 4 percent compared to the prior year period, primarily due to the challenging consumer environment in Asia Pacific, particularly in China and Australia, and the continuation of the company’s planned strategic reduction in sales in Europe to drive overall higher quality of sales in the region.
In North America, revenue in the Tommy Hilfiger and Calvin Klein businesses combined increased 1 percent compared to the prior year period, with modest growth in the wholesale business and a low single-digit decline in the direct-to-consumer business.
As for his outlook for the consumer globally, Larsson said: “We don’t speculate on the customer backdrop. We deal with the backdrop we see we are faced with, and then we just keep improving what’s within our control.”
