PVH Corp. Experiences Biggest Decline Since 1987 Market Crash Due to Europe Economic Concerns.

PVH Corp. Experiences Biggest Decline Since 1987 Market Crash Due to Europe Economic Concerns.

(Bloomberg) — Shares of PVH Corp. plunged the most since the Black Monday crash of 1987 after the company gave full-year sales forecasts that fell short of expectations.

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The clothing retailer, which owns the Tommy Hilfiger and Calvin Klein brands, said it expects a 6 to 7 percent drop in revenue this year, compared with a 2 percent increase last year. . While part of the expected decline comes from the sale of Heritage Brands, its women’s lingerie business, the company also noted a difficult macroeconomic context, particularly in Europe.

The 23% drop at 9:35 a.m. in New York marks the largest drop for PVH since October 19, 1987.

PVH is working to execute a transformation plan focused on strengthening Calvin Klein and Tommy Hilfiger, which have lost momentum with shoppers in recent years. In the fourth quarter, which includes the crucial holiday season, profitability exceeded analysts’ average estimate, partly due to better inventory management.

Yet income growth has not held up in some regions. Calvin Klein’s North American sales fell 8% in the fourth quarter, due to a decline in wholesale, while Tommy Hilfiger’s international sales fell 1%.

“PVH deserves a lot of credit for what it has accomplished with Calvin Klein and Tommy Hilfiger, making them two of the biggest brands in history,” BMO analyst Simeon Siegel said in a note. “That said, we believe CK has reached a revenue peak and could benefit from a greater focus on profits versus sales.”

(Updates with stock details in first and third paragraphs, analyst commentary in last paragraph.)

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