Calvin Klein Owner PVH Tumbles 20% on Warning of Europe Weakness

PVH Corp. shares plunged 20% in late trading after the company gave full-year sales guidance that fell short of expectations.

The clothier, which owns the Tommy Hilfiger and Calvin Klein brands, said it expects revenue this year to decrease 6% to 7%, compared with a 2% increase last year. While some of the expected decrease stems from the sale of Heritage Brands, its women’s intimates business, the company also noted a difficult macroeconomic backdrop, particularly in Europe.

PVH has been working to execute a transformation plan focused on strengthening Calvin Klein and Tommy Hilfiger, which have lost momentum among shoppers in recent years. In the fourth quarter, which includes the crucial holiday season, profitability exceeded the average analyst estimate, thanks in part to better inventory management.

That said, revenue growth hasn’t held up in some regions. Calvin Klein sales in North America fell 8% in the fourth quarter, driven by a decline in the wholesale business, while Tommy Hilfiger international revenue was down 1%.