PVH Corp (NYSE: PVH), the owners of the Calvin Klein and Tommy Hilfiger brands, stock fell 11.56% % on June 11th, 2020 (Source: Google finance) and continued the weak momentum falling over 7.9% on 12th June, 2020 (As of 11:57 am GMT-4; Source: Google finance)
The company posted lower than expected results for the first quarter of FY 20. The company has reported a first-quarter loss of $1.1 billion compared to net income of $82 million, in the year-ago period. The company’s majority of its stores and wholesale customer stores were closed for an average of six weeks worldwide in the first quarter because of the COVID-19 pandemic, and intends to have more than 85% of its stores open by mid-June. The sales for reopened stores for the second quarter-to-date are running down about 25% globally compared to the prior year period. The pandemic is expected to continue to have a significant impact on the second quarter and full year 2020 results while the Company expects that its revenue decline in the second quarter will be more pronounced than in the first quarter. The company did not provide more detailed guidance at this time due to the dynamic nature of the situation.
Moreover, the sales for reopened stores for the second quarter-to-date are running down about 20% in Europe, 25% in North America, and 25% for total Asia, with China approximately flat, compared to the prior year period. While sales have fall down across all regions, the traffic and sales trends are improving each week. The Company has ended the first quarter with cash of about $800 million and approximately $1 billion of available borrowings under its revolving credit facilities.
PVH in the first quarter of FY 20 has reported the adjusted loss per share of $3.03, missing the analysts’ estimates for the adjusted loss per share of $1.56, according to analysts surveyed by FactSet. The company had reported 43 percent fall in the adjusted revenue to $1.34 billion in the first quarter of FY 20, missing the analysts’ estimates for revenue of $1.36 billion.
Additionally, the company due to pandemic has suspended share repurchases under the stock repurchase program in mid-March, after approximately $110 million in repurchases completed in the first quarter. The company has suspended its cash dividend beginning with the second quarter. The Company’s first quarter cash dividend of $0.0375 per common share paid on March 31, 2020 was not affected by this suspension. The company has signed a new $275 million 364-day revolving credit facility. The company has also reduced planned capital expenditures to approximately $190 million in 2020 from $345 million in 2019