Loading...
01/10 16:34
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows strong financial performance with an EPS beat and improvements in operating margins, despite challenges like tariffs. The Q&A reveals positive regional growth, effective marketing strategies, and strong cash flow management. The optimistic outlook for 2026 and ongoing brand improvements further support a positive sentiment. Although management was vague on some specifics, the overall tone was optimistic, particularly with promising regional performance and strategic marketing efforts.
Total Revenue $2.3 billion, down less than 1% in constant currency year-over-year. The decline was attributed to a decrease in direct-to-consumer revenue by 1% in constant currency, partially offset by a 1% growth in wholesale revenue.
Inventory Levels Up 3% compared to last year, including a 2% increase due to tariffs. This reflects improved inventory management and alignment with sales plans.
Gross Margin 56.3%, a decrease of 210 basis points compared to last year. The decline was due to a 110 basis point impact from tariffs, 50 basis points from North American license transitions, and 50 basis points from higher promotions and Calvin Klein product shipment delays.
SG&A Spending Down in constant currency, with SG&A as a percentage of revenue improving by 40 basis points to 47.5%. This improvement reflects cost-saving measures and timing of expenses.
Operating Margin 8.8%, showing a sequential improvement despite challenges such as tariffs and shipment delays.
Earnings Per Share (EPS) $2.83, which exceeded expectations. This included a negative impact of $0.37 related to tariffs and a positive impact of $0.14 related to exchange rates.
Regional Revenue - EMEA Up 4% on a reported basis but down 2% in constant currency. The decline was due to muted consumer activity, lower cold weather outerwear performance, and Calvin Klein product shipment delays.
Regional Revenue - Americas Up 2%, driven by mid-single-digit growth in wholesale. Direct-to-consumer revenue declined low single digits, but digital commerce delivered double-digit growth.
Regional Revenue - Asia Pacific Flat in constant currency, with direct-to-consumer revenue growing low single digits. This was driven by improvements in China, Japan, and Australia, and strong digital commerce growth.
Licensing Revenue Down 11% year-over-year, primarily due to the transition of Calvin Klein women's sportswear and jeans in-house.
Calvin Klein Icon Cotton Modal franchise: Launched with global music superstar Rosalia, driving double-digit growth in women's underwear globally.
Calvin Klein Icon Cotton Stretch: Men's underwear grew 20%, marking the third consecutive quarter of strong growth.
Calvin Klein Denim: Strong growth driven by innovation and campaigns featuring global ambassadors like Jung Kook.
Tommy Hilfiger Hilfiger Racing Club campaign: Featured global talent like Claudia Schiffer and Nicholas Hoult, driving consumer engagement.
Calvin Klein Tokyo flagship: Opened in Harajuku, strengthening premium positioning with high-quality traffic and conversion.
Calvin Klein SoHo flagship: Opening planned in New York, further advancing global retail expansion.
Tommy Hilfiger shop-in-shop concept: Opened at Galeries Lafayette in Paris, reflecting a multiyear elevation plan.
Inventory management: Inventory levels up 3% year-over-year, reflecting healthy management despite tariff impacts.
SG&A efficiencies: Freed up over 200 basis points in efficiencies over the past 18 months.
Calvin Klein global product capability: Operational challenges being addressed, with planned improvements in delivery timing and margins for Spring 2026.
PVH+ Plan: Focus on building Calvin Klein and Tommy Hilfiger into globally iconic lifestyle brands through innovation and marketing.
Leadership changes: Patricia Gabriel appointed as Chief Supply Chain Officer; CFO Zac Coughlin to depart, with Melissa Stone serving as interim CFO.
Tariffs in North America: The company is facing a significant impact from tariffs in North America, which has negatively affected gross margins and is expected to have a net negative impact on earnings in 2025. The unmitigated impact of tariffs is approximately $65 million to EBIT or $1.05 per share.
Transitory operational challenges: The company is dealing with operational challenges related to the setup of the Calvin Klein global product capability in New York. These challenges have caused delays in product shipments, impacting the full-price selling season in Europe and creating headwinds for the quarter.
Consumer backdrop in Europe: The company observed a tougher consumer backdrop in Europe, with muted activity and lower in-season replenishment. This has negatively impacted direct-to-consumer and wholesale revenues in the region.
Cold weather outerwear performance: The company faced challenges in the cold weather outerwear category, with a shorter full-price selling window and a shift in consumer preference towards lighter transitional outerwear. This has impacted sales in key regions like Europe.
Choppy macroeconomic environment in the Americas: The company is navigating a choppy macroeconomic environment in the Americas, which has led to low single-digit declines in direct-to-consumer revenue despite growth in wholesale.
Licensing revenue decline: Revenues in the licensing business were lower due to the transition of Calvin Klein women's sportswear and jeans wholesale categories in-house, impacting overall revenue.
Higher promotions and delayed shipments: Higher promotions and delayed shipments, particularly in Europe, have negatively impacted gross margins and shortened the full-price selling season.
Uneven global consumer backdrop: The company is operating in an uneven global consumer backdrop, which has created challenges in maintaining consistent revenue growth across regions.
Full Year Revenue and Operating Margin Outlook: PVH reaffirms its constant currency revenue and operating margin outlook for the full year. Reported revenue and non-GAAP EPS outlook have been narrowed to the high end of previous ranges, reflecting confidence in the brands and execution despite global consumer challenges and tariff impacts.
Fourth Quarter Revenue Projections: Revenue is projected to be up slightly to low single digits on a reported basis and down slightly in constant currency compared to the prior year. Regional expectations include mid-single-digit growth in the Americas, continued Q3 trends in EMEA, and a slight decline in Asia Pacific due to Lunar New Year timing.
Fourth Quarter Gross Margin and Operating Margin: Gross margin is expected to decline approximately 200 basis points versus the prior year, with a 150 basis point impact from tariffs. Operating margin is projected to be approximately 9%, down 100 basis points compared to last year.
Full Year EPS Guidance: EPS guidance has been narrowed to a range of $10.85 to $11, up from the previous range of $10.75 to $11.
Inventory Management: Inventory is expected to align with the sales plan by year-end, excluding tariffs. Current inventory levels are up 3% compared to last year, with a 2% increase due to tariffs.
Marketing Investments: Increased marketing investments are planned for the fourth quarter to maximize holiday impact and build momentum into 2026.
Regional Revenue Outlook: Americas revenue is planned to grow mid-single digits, Asia Pacific revenue is expected to decline mid-single digits in constant currency, and EMEA revenue is projected to decline slightly in constant currency for the full year.
Tariff Impact Mitigation: PVH expects a $65 million unmitigated EBIT impact from tariffs in 2025, down from the previous estimate of $70 million. Full mitigation of tariff impacts is expected over time.
Share Repurchase Program: During the quarter, PVH completed its previously announced accelerated share repurchase program, reducing its share count by 2.3 million additional shares. This brought the total amount of shares purchased under the agreement to 6.9 million and the year-to-date total, including open market purchases, to 7.7 million shares.
The earnings call highlighted mixed results: positive earnings per share and digital growth, but challenges in Europe and flat revenue in Asia Pacific. Marketing investments showed promise, yet gross margin declined. Q&A insights confirmed positive trends in Americas and APAC, but management was vague on some specifics. Overall, the reaffirmed guidance and operational improvements are offset by tariff impacts and regional challenges, leading to a neutral sentiment.
The earnings call summary shows strong financial performance with an EPS beat and improvements in operating margins, despite challenges like tariffs. The Q&A reveals positive regional growth, effective marketing strategies, and strong cash flow management. The optimistic outlook for 2026 and ongoing brand improvements further support a positive sentiment. Although management was vague on some specifics, the overall tone was optimistic, particularly with promising regional performance and strategic marketing efforts.
The earnings call presents a mixed outlook. While there is strong revenue growth in the Americas and strategic marketing investments, the decline in EPS and high inventory levels are concerning. The management's optimistic guidance and efforts to mitigate tariffs are positive, but the lack of specific details on tariff impacts and promotional trends introduces uncertainty. The overall sentiment is neutral, as positive elements are balanced by negative and uncertain factors.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
