Hilfiger Owner Jumps After Saying Profit Goal to Withstand Virus
Tommy Hilfiger Owner Says Coronavirus Stifling Business in China
(Bloomberg) -- PVH Corp., owner of the Tommy Hilfiger and Calvin Klein brands, jumped the most in three months after maintaining its earnings outlook even as the virus outbreak in China led it to close most of its stores there.
Excluding some items, profit will be at least $1.79 a share in its fourth quarter and at least $9.45 a share for the year, PVH said Wednesday, reaffirming its Jan. 9 forecast. It likely would have exceeded expectations “had the coronavirus outbreak not occurred during the last two weeks of its fiscal year,” the company said.
The majority of Calvin Klein and Tommy Hilfiger stores in China are temporarily closed, according to the company. It said shopper traffic will be much lower than normal at the stores that remain open, some of which are operating with limited hours.
PVH shares rose as much as 6.7% in New York, the biggest intraday gain since Nov. 7. They had slid 18% this year through Tuesday’s close, after gaining 13% last year.
Greater China will account for about 7% of PVH’s revenue in 2019. About 20% of the company’s goods are made in China. Chief Executive Officer Manny Chirico said he still sees China as a growth driver going forward, once things clear up.
“While the coronavirus will impact our businesses in the near-term, our long-term growth opportunities across the Asia Pacific region are significant,” Chirico said.
Luxury goods sellers around the world are trying to cope with repeated disruptions in the crucial China market. The U.S.-China trade war has already forced companies to tweak their supply chains. Many months of protests in Hong Kong have impacted sales among both local shoppers and tourists.
Chirico said he would provide updates on the company’s full-year earnings call in March.
PVH said it does expect net income per share this quarter and for the full year to be lower than its previous forecast because of an actuarial loss that will be recognized on its retirement plans.
To contact the reporter on this story: Kim Bhasin in New York at kbhasin4@bloomberg.net
To contact the editors responsible for this story: Sally Bakewell at sbakewell1@bloomberg.net, Lisa Wolfson
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