Pvh Corp. · NYSE:PVH
Pvh — Shareholder Meeting (June 2011)
59 slides from Pvh's shareholder meeting presentation, Jun 23, 2011
Slide 1: We Grow Powerful Global Lifestyle Brands
We are PVH, One of the World’s Largest Branded Lifestyle and Apparel Companies. We Grow Powerful Global Lifestyle Brands June 23, 2011
Slide 2: Safe Harbor
SAFE HARBOR We obtained or created the market and competitive position data used throughout this presentation from research, surveys or studies conducted by third parties, information provided by customers and industry or general publications. Industry publications and surveys generally state that t
Slide 3: A Global Leader in the Apparel Industry
A GLOBAL LEADER IN THE APPAREL INDUSTRY $9.0 2010 REVENUES $8.0 $7.7 (in billions) $7.0 $6.0 $5.6 $5.3 $5.0 $4.4 $4.3 $4.0 $4.0 $3.6 $3.0 $3.0 $2.7 $2.6 $2.5 $2.5 $2.5 $2.5 $2.3 $2.0 $1.0 $0.0 VFC RL 2010 ESP HBI COH JNY BEN PVH 2010 LIZ GES BOS BRBY WRC PF PF PVH TH 3
Slide 4: A Diversified Global Leader with Powerful Brands
A DIVERSIFIED GLOBAL LEADER WITH POWERFUL BRANDS Expanding Our Global Reach Consolidated PVH PF Combined Global Retail Sales: $14.6 BN TOMMY CALVIN HERITAGE Total Revenue: Operating Profits: HILFIGER KLEIN BRANDS $4.6 $6.7 $3.3 25% 33% 25% 35% 44% 49% 51% 86% 40% 36% 18% 20% 24% 12% by Business by B
Slide 5: A World Class Portfolio of Brands
A WORLD CLASS PORTFOLIO OF BRANDS GLOBAL GROWTH BRANDS IZOD • ARROW • BASS • VAN HEUSEN Owned* Licensed* CHAPS MICHAEL Michael Kors DKNY Nautica Geoffrey Beene Sean John Hart Schaffner Marx Ike Behar JOE Joseph Abboud Kenneth Cole Reaction Kenneth Cole New York *Reflects a partial list. 5
Slide 6: IZOD • Arrow • Bass • Van Heusen
IZOD • ARROW • BASS • VAN HEUSEN 6
Slide 7: Heritage Brands: Overview and Financial Summary
HERITAGE BRANDS: OVERVIEW AND FINANCIAL SUMMARY LTM 1Q11 Summary Financials Revenues $1,757 MM Operating Income* $165 MM Operating Margin* 9.4% Heritage Brands Dress Furnishings Sportswear Retail LTM 1Q11 Revenues $535 MM $581 MM $641 MM % of TTL 30% 33% 37% 7 *Excludes certain items. Reconciled on
Slide 8: Heritage Brands: Overview
HERITAGE BRANDS: OVERVIEW Dress Shirts • 1 in 3 dress shirts sold in U.S. is a PVH shirt • 47% share in U.S. department and chain stores • Top 3 dress shirt brands: Van Heusen, ARROW & Geoffrey Beene; 9 of the top 10 brands Neckwear • World’s largest neckwear company – over 50% market share in the U
Slide 9: Calvin Klein
Calvin Klein
Slide 10: Calvin Klein: Brand Overview
CALVIN KLEIN: BRAND OVERVIEW • 2010 worldwide retail revenue: ~$6.7 BN • Calvin Klein Collection acts as halo and offers inspiration to the ck Calvin Klein (bridge) and Calvin Klein (better) labels • Over 40 domestic and international licensing partners • Business model leverages brand across multip
Slide 11: Calvin Klein: Significant Growth Opportunities
CALVIN KLEIN: SIGNIFICANT GROWTH OPPORTUNITIES • Broaden distribution globally and grow global market share • Enhance and extend product through: – Continually improve product and assortment – Brand appropriate extensions – Complementary new product lines >$9.0 BN Collection= $200 MM $6.7 BN +2.5 BN
Slide 12: Calvin Klein: Business Overview and Financials
CALVIN KLEIN: BUSINESS OVERVIEW AND FINANCIALS LTM 1Q11 Summary Financials Revenues $969 MM Operating Income $250 MM Operating Margin 26% Calvin Klein Calvin Klein Licensing & Calvin Klein Apparel: Wholesale Collection Wholesale & Retail Dedicated In-House Dedicated In-House Advertising Agency Desig
Slide 13: Calvin Klein: Top Licensees
CALVIN KLEIN: TOP LICENSEES • 2010 retail sales: ~$2.7 BN (underwear, jeans and apparel) • Stated “Calvin Klein business projected to double by 2014” • Launch of ck one lifestyle brand (jeans, underwear & swim) • 2010 retail sales: ~$1.3 BN • Second largest fragrance brand • Multiple successful laun
Slide 14: Calvin Klein: International Full-Priced Freestanding Stores by Concept
CALVIN KLEIN: INTERNATIONAL FULL-PRICED FREESTANDING STORES BY CONCEPT Our licensees continue to open new international stores 2009A 2010A 2011E Calvin Klein Collection 4 6 8 ck Calvin Klein 67 75 116 Calvin Klein Jeans 331 367 411 ck Watch & Jewelry 3 3 3 Calvin Klein Underwear 182 188 250 Total 58
Slide 15: Calvin Klein: Calvin Klein Collection, NYC
CALVIN KLEIN: CALVIN KLEIN COLLECTION, NYC 15
Slide 16: Calvin Klein: ck Calvin Klein / Hong Kong
CALVIN KLEIN: ck CALVIN KLEIN / HONG KONG 16
Slide 17: Calvin Klein: Jeans & Underwear / Elements, Hong Kong
CALVIN KLEIN: CALVIN KLEIN JEANS & UNDERWEAR/ ELEMENTS, HONG KONG 17
Slide 18: Calvin Klein: North America Wholesale & Retail
CALVIN KLEIN: NORTH AMERICA WHOLESALE & RETAIL LTM 1Q11 Revenue: $580MM Wholesale • LTM 1Q11 men’s better sportswear revenue: >$150MM – Potential growth opportunity: $250MM • Includes Calvin Klein dress shirts and neckwear sold primarily to department stores Retail • Approximately 115 stores, princi
Slide 19: Calvin Klein: Global Marketing
CALVIN KLEIN: GLOBAL MARKETING Global Advertising • Over $300 million of Spend By Region global marketing spend surrounding brand across multiple media Asia 30% • Dedicated in-house North America advertising agency for 44% brand Europe 26% 19
Slide 20: Calvin Klein Collection – Fall 2011
CALVIN KLEIN: CALVIN KLEIN COLLECTION – FALL 2011 20
Slide 21: Calvin Klein Collection – Fall 2011
CALVIN KLEIN: CALVIN KLEIN COLLECTION – FALL 2011 21
Slide 22: ck Calvin Klein – Fall 2011
CALVIN KLEIN: ck CALVIN KLEIN – FALL 2011 22
Slide 23: Calvin Klein – Fall 2011
CALVIN KLEIN: CALVIN KLEIN – FALL 2011 23
Slide 24: Calvin Klein: ck one – Fall 2011
CALVIN KLEIN: ck one – FALL 2011 24
Slide 25: Calvin Klein Public Relations
CALVIN KLEIN PUBLIC RELATIONS 25
Slide 26: Calvin Klein: Global Public Relations Coverage
CALVIN KLEIN: GLOBAL PUBLIC RELATIONS COVERAGE 2010 Global print & digital editorial coverage = 5,800+ fashion editorials globally = 60+ magazine covers globally = 4.2+ billion impressions = $132+ million approx global advertising value = $400+ million approx global ACE value U.S. television coverag
Slide 27: Tommy Hilfiger
TOMMY <8 HILFIGER
Slide 28: Tommy Hilfiger Brand Highlights
TOMMY HILFIGER BRAND HIGHLIGHTS
Slide 29: Tommy Hilfiger: Brand Overview
TOMMY HILFIGER: BRAND OVERVIEW Global Retail PF 2010 Revenues: ~$4.6 BN 10% 10% N. America 36% Asia Rest of the World 44% Europe Classic American Cool With A Preppy Twist Strong Global Brand Awareness Proven Affordable Designer Lifestyle Brand 29
Slide 30: Tommy Hilfiger: Brand Awareness
TOMMY HILFIGER: BRAND AWARENESS One of the world’s most recognized premium lifestyle brands CA 5% 22% 59% 87% GE 5% 21% 65% 91% SP 3% 18% 65% 85% NE 3% 12% 73% 88% US 2% 13% 73% 87% IN 3% 10% 40% 54% IT 4% 66% 71% 1% UK 4% 86% 90% Top of Mind FR 3% 63% 66% Other Unaided JP 3% 58% 61% Aided RU 2% 38%
Slide 31: Tommy Hilfiger: Global Marketing
TOMMY HILFIGER: GLOBAL MARKETING Global Advertising • Over $175 million of global Spend By Region marketing spend Asia 10% • Additional $25 million of incremental marketing spent North America in last twelve months 36% • First ever national advertising and cinema campaign in Europe in 2010 • Two nat
Slide 32: Tommy Hilfiger: Global Brand Transformation
TOMMY HILFIGER: GLOBAL BRAND TRANSFORMATION “Meet The Hilfigers” Campaign • Reclaimed ownership of Classic American Cool with a preppy point of view • Consistent brand message executed seamlessly across all brand touch points • Clear 360O communication platform reiterates core position • Prep World
Slide 33: Tommy Hilfiger: Universal Brand Appeal
TOMMY HILFIGER: UNIVERSAL BRAND APPEAL “Post-Hilfigers” Brand Perception: Substantial Growth Of Key Brand Values Casual Fashionable Youthful Stylish American Appealing Suitable for All Occasions Cool Before Viewing Ad Fun Innovative Aspirational Classic Discrete More Suited for Men than For… 0 10 20
Slide 34: Tommy Hilfiger: Universal Brand Appeal
TOMMY HILFIGER: UNIVERSAL BRAND APPEAL “Post-Hilfigers” Brand Perception: Substantial Growth Of Key Brand Values Casual Fashionable Youthful Stylish American Appealing Suitable for All Occasions Cool Before Viewing Ad Fun After Viewing Ad Innovative Aspirational Classic Discrete More Suited for Men
Slide 35: Tommy Hilfiger: Extensive & Growing Distribution Footprint
TOMMY HILFIGER: EXTENSIVE & GROWING DISTRIBUTION FOOTPRINT Over 1,050 Stores Globally in 90 countries as of April 30, 2011 Approximately 500 Company Operated Asia (excl. Japan) North America (1) Licensees’ Stores: 104 Total Stores: 231 Japan Total Stores: 187 Europe Total Stores: 433 Rest of World (
Slide 36: Tommy Hilfiger: Extensive & Growing Distribution Footprint
TOMMY HILFIGER: EXTENSIVE & GROWING DISTRIBUTION FOOTPRINT Over 10,000 Doors Globally in 90 countries as of April 30, 2011 North Asia (excl. America (1) Japan) ~670 doors (Macy’s) ~300 doors Rest of Europe World (2) ~9,000 doors ~400 doors 1. Includes the U.S. and Canada. Distribution No Distributio
Slide 37: Tommy Hilfiger: Retail Presence Where Fashion Matters
TOMMY HILFIGER: RETAIL PRESENCE WHERE FASHION MATTERS 37
Slide 38: Tommy Hilfiger: Retail Presence Where Fashion Matters
TOMMY HILFIGER: RETAIL PRESENCE WHERE FASHION MATTERS 38
Slide 39: Tommy Hilfiger: Business Overview and Financials
TOMMY HILFIGER: BUSINESS OVERVIEW AND FINANCIALS LTM 1Q11 Tommy Hilfiger Business Reported Revenues: ~ $2.7 billion International Revenues: ~ $1.5 billion North America Revenues: ~ $1.2 billion Operating Income*: ~ $295 million Operating Margins*: ~ 11.1% *Excludes certain items. Reconciled on Forms
Slide 40: Tommy Hilfiger: Overview of Europe
TOMMY HILFIGER: OVERVIEW OF EUROPE LTM 1Q11 Revenues ~$1.2 billion • Since 2000, revenues have grown at a 24% CAGR Premium brand positioning Revenues by Distribution Model Strong Europe wholesale bookings • Spring and Fall 2011: up >15% 29% Continued momentum in retail comps: 71% • 2H10: + mid-teens
Slide 41: Tommy Hilfiger: Overview of North America
TOMMY HILFIGER: OVERVIEW OF NORTH AMERICA • LTM 1Q11 Revenues of ~$1.2 billion in U.S. & Canada • Wholesale: – Macy’s exclusive – opportunity to double business across store through further penetration of owned & licensed products – Canada: recent expansion to The Bay Revenues by • Strong retail pre
Slide 42: Tommy Hilfiger: Overview of Central and South America
TOMMY HILFIGER: OVERVIEW OF CENTRAL AND SOUTH AMERICA Mexico: 17 stores • Retail sales of ~$320 million Caribbean: 14 stores • Entire region licensed exhibiting significant momentum • Brazil remains largest Central America: 28 stores underpenetrated opportunity Andeans Region: 58 stores South Americ
Slide 43: Tommy Hilfiger: Overview of Asia
TOMMY HILFIGER: OVERVIEW OF ASIA Geographic expansion continues in Asia: K`orea: 19 stores Most regions experiencing double digit growth • Japan – Retail Sales: >$230 MM Japan: 127 stores – Retail only model • China China & HK: 35 stores – Retail Sales: ~$60 MM India: 36 stores Others: 13 stores – C
Slide 44: Tommy Hilfiger: Significant Growth Opportunities
TOMMY HILFIGER: SIGNIFICANT GROWTH OPPORTUNITIES Significant Growth Opportunities Remain Across The Business Globally >$6.5 BN $4.6 BN +2.0 BN Global $2.5 BN Growth Opportunity 2005A 2010A 2013-2014 44
Slide 45: Financial Highlights
F I N A N C I A L H I G H L I G H T S 45
Slide 46: PVH Consolidated Results
PVH CONSOLIDATED RESULTS ($ in millions, except % and EPS) Full Year 1st Quarter 2009 2010 2010 2011 Revenue $ 2,398.7 $ 4,636.8 $ 619.0 $ 1,369.2 % Growth ----- 93.3% ----- 121.2% Gross Profit $ 1,184.2 $ 2,469.0 $ 317.0 $ 728.6 % Margin 49.4% 53.2% 51.2% 53.2% EBITDA* $ 319.6 $ 658.1 $ 93.5 $ 200.
Slide 47: Continued Momentum Across the Business
CONTINUED MOMENTUM ACROSS THE BUSINESS Revenue & EPS Growth (2003 – 2011) $6,000 $6.00 $4.90 $5,500 $5.00 $5,000 $4.26 $4,500 $4.00 $4,000 $3.21 $2.95 $2.83 $ Millions $3,500 $2.62 $3.00 $5,725 $3,000 $1.88 $4,637 $2.00 $2,500 $1.37 $0.98 $2,000 $1.00 $2,425 $2,397 $2,399 $1,500 $1,909 $2,091 $1,569
Slide 48: PVH: Future
PVH: FUTURE Multiple growth opportunities driving retail sales of close to $20 billion Tommy Hilfiger Calvin Klein Heritage Brands >$9.0 BN >$6.5 BN $6.7 BN $4.6 BN $4.0 BN $3.3BN 2010A 2013-2014 2010A 2013-2014 2010A 2013-2014 1. Reflects planned annual top line growth. 49
Slide 49: Strong Credit Profile
STRONG CREDIT PROFILE • Strong and improving free cash flow in 2011 • Significant debt paydown since close of TH acquisition of ~$400 million • Plans to repay an additional $300 million by end of FY 2011 66% • Improving Female returns driven by healthy earnings and debt paydown 50
Slide 50: Corporate Social Responsibility
C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y To read our 2010 CSR Report please visit www.pvhcsr.com 51
Slide 51: Human Rights
HUMAN RIGHTS Ethical sourcing, based on the core values of respect for human rights, fair labor conditions and protection of the environment, drives how we conduct our business. Human Rights Priorities • Drive the highest standards of ethics and human rights toward achievement of a sustainable suppl
Slide 52: Workplace
WORKPLACE We place a high priority on making a genuine contribution to the quality of life of our associates and their families and recognize our responsibility to provide a work environment that fosters respect, dignity and opportunity. Workplace Priorities • Maintain consistently high levels of as
Slide 53: Environment
ENVIRONMENT We are committed to incorporating sustainability into all aspects of our operations and understand our fundamental responsibility to minimize our impact on the environment. Environment Priorities • Promote sustainable operating and manufacturing practices for PVH, our suppliers and licen
Slide 54: Community
Ethical sourcing based on the core values of respect for human rights, COMMUNITY protection of the environment drive how we conduct our business. Commitment to community service has long been integral to our corporate identity and culture. We strive to make a positive impact through our involvement
Slide 55: Community: Charitable Giving
COMMUNITY Charitable Giving 2009 2010 PVH Product Contributions (1) $9,098 $9,380 PVH Cash Contributions 1,962 3,388 Retail Customer Contributions 676 689 PVH Cares: Associate Pledges $180 164 Fundraising 313 224 Total $12,229 $13,845 % of Net Income (2) ~5% 1. Product donations are at retail value.
Slide 56: Recognitions
RECOGNITIONS • PVH was ranked 28th in Corporate Responsibility Magazine’s “100 Best Corporate Citizens List,” (up from 100th last year) • Recognized by Institutional Investor as part of their “All-American Executive Team” – Best CEO, Buy Side and Sell Side – Best IR Professional, Sell Side – Best IR
Slide 57: Questions & Answers
PVH Questions&AnNnSwers
Slide 58: Appendix: GAAP to Non-GAAP Reconciliations
APPENDIX GAAP to Non-GAAP Reconciliations Earnings Before Interest and Taxes, Depreciation and Amortization (EBITDA) (Dollar amounts in millions) 1st Qtr 1st Qtr Full Year Full Year 2010 2011 2009 2010 GAAP net (loss) income $ (27.6) $ 57.7 $ 161.9 $ 53.8 Non-recurring and one-time items (1) 104.0 4
Slide 59: Appendix: Non-GAAP EBIT by Segment
APPENDIX Non-GAAP Earnings Before Interest and Taxes by Segment LTM 1Q 2011 (Dollar amounts in millions) Full Year Quarter LTM 2010 Q1 2011 Q1 2010 Q1 2011 Heritage Brand Wholesale Dress Furnishings $ 72.5 $ 20.4 $ 18.5 $ 74.5 Heritage Brand Wholesale Sportswear 56.5 13.7 20.9 49.3 Heritage Brand Re