Updated 4:30 p.m ET April 1
It’s Travis at Tommy and Carolyn at Calvin in the spotlight at PVH Corp.
The company turned in fourth-quarter results late Tuesday, revealing better-than-expected sales and operating margins that had chief executive officer Stefan Larsson singing the virtues of his PVH+ strategic plan.
But on his quarterly call with analysts, it was the company’s ability to affix its brands to pop culture and keep them there that was driving the conversation.
Larsson has been increasing marketing spending and pushing for PVH to have more breakthrough moments with its brands. And he had some results to show.
Three-time Super Bowl champ Travis Kelce became global brand ambassador and creative collaborator for Tommy Hilfiger. And Calvin Klein was thrust into the center of the cultural conversation with the Hulu show “Love Story: John F. Kennedy Jr. & Carolyn Bessette,” a focus the brand has worked to capitalize on.
As ever, fashion is about making a moment or capitalizing on it when one comes.
“It’s almost impossible to have a conversation about Calvin right now without ‘Love Story,’” Larsson said on the call, when asked about what the company has learned from the show’s success.
“I don’t believe anyone could have anticipated the magnitude of the hit it has become globally and across generations,” the CEO said. “We just got the data yesterday that over 40 million people have watched ‘Love Story,’ Hulu’s most streamed show ever.
“When the show launched, we could see the search increase for Calvin Klein, e-commerce traffic, DTC is positive,” he said. “The consumer is looking for iconic Calvin, starting with iconic underwear and iconic denim, the most sold denim style right now is the ’90s fit.”
All of that plays into the company’s efforts to get Calvin Klein back to its roots, he said.
“When something like ‘Love Story’ hits, it’s just a really nice sync up with where we are with the brand,” he said. “So it also shows the power of the brand. So we are talking about, since we started the PVH+ [strategic] journey, that there is something special in Calvin and Tommy because they are one of a handful of brands that have…become globally iconic. This is a good example of this because the interest we see spans generations.”
Tom Nikic, an analyst at Needham, argued in a research note that PVH’s valuation is still too low, even with a stock bump that sent shares up 9.8 percent to $76.56 in trading on Wednesday, leaving the company with a market cap of $3.68 billion.
Nikic described fourth-quarter results as “generally fine” and said PVH could benefit if the show sparks interest in the brand.
“If Calvin Klein goes viral thanks to the attention it’s getting from the ‘Love Story’ TV show, it could drive upside to guidance,” the analyst said.
Without a 170-basis-point hit from tariffs, the company’s operating margins stood at a very healthy 11.7 percent in the quarter. And revenues for the three months ended Feb. 1 rose 6 percent to $2.5 billion a year earlier, a performance that was flat in constant currencies.
And Tommy Hilfiger is having its own love story.
“There is a lot of love for Travis Kelce out there, a lot of love for Tommy and then combining those really creates energy and interest,” Larsson said. “The way we build that collaboration is, again, going back to the DNA of Tommy’s classic American Cool.”
That means pumping more “innovation and newness” into the key categories like outerwear, sweaters, shirts and knits, bringing the marketing and product ever closer.
