PVH Corp, parent of Calvin Klein and Tommy Hilfiger, recorded lower sales in the second quarter as the conflict in the Middle East and its macroeconomic impacts weighed down performance.

The company’s revenue decreased 3 per cent on both a reported and constant currency basis to $2.167 billion during the quarter ended August 2. Management said the results were at the high end of guidance.

Sales in EMEA saw the steepest drop of 6 per cent during the period, as consumer demand remained soft due to the prolonged conflict in the Middle East and its broader macroeconomic impacts.  

Sales in the Americas were down 1 per cent, with a slight increase in direct-to-consumer revenue more than offset by a decline in the wholesale business. 

Apac revenue rose 3 per cent. Licensing revenue dropped 13 per cent due to the planned license transitions in North America.

Tommy Hilfiger revenue was approximately flat, while Calvin Klein revenue decreased 7 per cent amid the impact of wholesale shipment timing in the Americas.

“E-commerce grew across both brands, including strong increases in online traffic,” said Stefan Larsson, CEO of PVH.

“In both brands we are seeing early momentum for the new fall season in product and marketing, with a very positive consumer response to our recently-launched campaigns featuring Tate McRae for Calvin Klein and Travis Kelce for Tommy Hilfiger.” 

On the bottom line, the company swung to a loss before interest and tax of $191 million from last year’s income of $133 million, due to a noncash goodwill impairment charge of $439 million.

For the full year, PVH continues to expect approximately flat revenue growth.

“We remain intensely focused on executing the PVH+ Plan, further strengthening product, consumer engagement and the marketplace experience. 

“At the same time, we are stepping up our cost actions, and we continue to invest behind strategic priorities and brands,” Larsson added.