PVH Corp. wants to buy a third brand to rival its Calvin Klein and Tommy Hilfiger labels in sales and licensing revenue, CEO Emanuel Cherico told analysts. The new label also would “complement” PVH’s heritage business (Izod, Van Heusen, Arrow), says Cherico.

Calvin Klein generated about $9.1 billion in global retail sales in 2017, while Tommy Hilfiger had $7.4 billion.

The brands also have sizeable licensing businesses. Calvin Klein has about 50 licensing agreements across categories including fragrances, watches, footwear and optical frames and sunglasses. Tommy Hilfiger has about 30 licensees in areas such as women’s apparel, fragrance, men’s women’s and children’s sportswear and tailored clothing.

“The opportunities are there and we have a track record of bringing in brands through acquisition and being able to integrate them relatively quickly and get all the benefits,” says Cherico.

PVH’s net income rose 37.5% to $164.7 million in Q2 ended Aug. 5 as net sales increased 13% to $2.3 billion and licensing revenue edged up to $81.5 million. Licensing revenue for Tommy Hilfiger inched up to $27.5 million while total revenue increased 12.1% to $1 billion. Net sales jumped 15.1% to $990.1 million.

In the Calvin Klein business, licensing revenue slipped slightly to $48 million as total revenue rose 17% to $925 million. Net sales increased 19.7% to $860.3 million.

Contact:

PVH Corp, Mike Shaffer, CFO, 212-381-3500.