Group 1 - PVH Corp's stock has declined 16.3% to $67.68, marking its worst single-session drop since April 2024, primarily due to a reduction in fiscal second-quarter profit guidance attributed to higher tariffs, overshadowing better-than-expected first-quarter earnings and revenue [1] - Wells Fargo and BMO have reduced their price targets for PVH, with Wells Fargo lowering it from $93 to $84 and BMO from $100 to $80, although analysts remain generally bullish with nine out of 15 firms rating it as "buy" or better [2] - PVH has experienced a significant 36% loss year-to-date and over 44% decline in the last 12 months, with today's trading activity showing a notable increase in options volume, particularly in the June 80 call [3] Group 2 - The 12-month consensus target price for PVH is $98.23, indicating a 41.2% premium over current trading levels, suggesting potential upside despite recent declines [2] - The stock has struggled to break through the $90 level in May, which coincides with its 200-day moving average, indicating a resistance point [3] - Today's options activity reflects heightened interest, with 2,132 calls and 1,140 puts traded, significantly above typical volume, indicating potential market speculation [3]

Financial Data and Key Metrics Changes - Revenue increased by 2% above guidance, with non-GAAP EPS also exceeding expectations [5][32] - Total direct-to-consumer revenue decreased by approximately 3%, while e-commerce grew by 3% [5][36] - Wholesale revenue grew in the mid-single digits, benefiting from earlier shipments and the relaunch of Calvin Klein women's sportswear and jeans [5][6] Business Line Data and Key Metrics Changes - Calvin Klein's underwear and jeans categories saw a 25% increase in sales due to innovative product launches [8] - Fashion denim for Calvin Klein grew by 14% in Q1, indicating strong performance in innovative offerings [9] - Tommy Hilfiger also experienced growth through new seasonal collections and strategic marketing campaigns [10][11] Market Data and Key Metrics Changes - EMEA revenue increased mid-single digits, with direct-to-consumer growth turning positive [12][34] - Americas revenue rose by 7%, driven by high teens growth in wholesale [34] - Asia Pacific revenues declined low teens due to weaker consumer confidence and earlier Lunar New Year timing [16][35] Company Strategy and Development Direction - The company is focused on executing the PVH Plus plan to strengthen brand performance and consumer engagement [5][7] - Strategic initiatives include product innovation, enhanced marketing campaigns, and a focus on core strengths in Calvin Klein and Tommy Hilfiger [10][29] - The company is navigating a challenging macro environment while aiming to improve operational efficiencies and reduce costs [21][49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough macro environment but emphasized control over internal actions to drive performance [7][21] - The company is facing increased promotional levels and tariff impacts, particularly in the U.S. market [21][41] - Despite challenges, management remains optimistic about long-term growth and brand strength, particularly in key markets [22][46] Other Important Information - The company returned over $550 million to shareholders through share repurchases [32] - Inventory levels increased by 19% compared to the previous year, primarily due to strategic investments in core product categories [39] - A non-cash goodwill impairment charge of $480 million was recorded, reflecting increased discount rates [39] Q&A Session Summary Question: What gives confidence that Calvin and Tommy still have good momentum with consumers? - Management highlighted strong product innovation and marketing efforts that have driven significant growth in key categories despite macro challenges [56][57] Question: Can you elaborate on the cost-out efforts and their impact? - Management discussed ongoing operational improvements and cost-saving initiatives aimed at enhancing efficiency and profitability [65][70] Question: How are tariffs impacting the business and what mitigation strategies are in place? - Management outlined the expected $65 million impact from tariffs and discussed leveraging global sourcing relationships to mitigate costs [78][81]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 increased by 2% above guidance, with non-GAAP EPS also exceeding expectations [6][35] - Total direct-to-consumer revenue declined approximately 3%, while e-commerce revenue grew by 3% [6][39] - Gross margin decreased to 58.6%, down 280 basis points compared to the previous year [40][41] - EBIT for the quarter was $160 million, with an operating margin of 8.1% [41] Business Line Data and Key Metrics Changes - Calvin Klein's underwear and jeans categories saw a 25% increase in sales due to innovative product launches [9][60] - Tommy Hilfiger experienced a 3% revenue increase, driven by growth in EMEA and Americas [39] - Wholesale revenue increased by mid-single digits, benefiting from earlier shipments and the relaunch of Calvin Klein women's sportswear [6][15] Market Data and Key Metrics Changes - EMEA revenue grew by 4% in constant currency, with mid-single digit growth in wholesale [37] - Americas revenue increased by 7%, driven by high teens growth in wholesale [37] - Asia Pacific revenues declined by low teens on a reported basis, attributed to weaker consumer confidence [17][38] Company Strategy and Development Direction - The company is focused on executing the PVH Plus plan to strengthen brand performance and consumer engagement [6][33] - Plans to enhance product innovation and marketing efforts, particularly in Calvin Klein's underwear and denim categories [28][29] - The company is taking back licenses for Calvin Klein sportswear and jeans to improve brand control and execution [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro environment, with weakened consumer sentiment and increased promotional levels [22][47] - The company remains committed to long-term growth in China despite current challenges [23] - Full-year revenue guidance is reaffirmed as flat to slightly up, but EPS guidance has been adjusted down due to macro pressures [27][49] Other Important Information - The company returned over $550 million to shareholders through share repurchases [36] - Inventory levels increased by 19% compared to the previous year, primarily due to strategic investments in core product categories [42] Q&A Session Summary Question: What gives confidence that both brands still have good momentum with consumers? - Management highlighted strong product innovation and marketing efforts that have driven significant growth in key categories despite macro challenges [58][60] Question: Can you provide details on the cost-out efforts and their timing? - Management discussed ongoing operational improvements and cost-saving initiatives that are expected to deliver significant benefits in the second half of the year [66][75] Question: How are tariffs impacting the business and what mitigation strategies are in place? - The company identified a $65 million unmitigated impact from tariffs and is working on optimizing sourcing and production costs to mitigate this effect [78][81]

Group 1 - PVH Corp's shares have declined by approximately one-third over the past year due to weak consumer sentiment, pressures in China, and uneven performance in the US [1] - The company is facing significant challenges in the current market environment, impacting its overall performance and investor confidence [1]

Core Insights - PVH reported revenue of $1.98 billion for the quarter ended April 2025, reflecting a 1.6% increase year-over-year and surpassing the Zacks Consensus Estimate of $1.94 billion by 2.49% [1] - The company's EPS was $2.30, down from $2.45 in the same quarter last year, but exceeded the consensus estimate of $2.24 by 2.68% [1] Revenue Breakdown - Tommy Hilfiger generated revenue of $1.05 billion, exceeding the average estimate of $1.02 billion by analysts, marking a year-over-year increase of 3.4% [4] - Total revenue for Calvin Klein was $886.10 million, slightly above the estimated $876.14 million, but showed a minor decline of 0.1% compared to the previous year [4] - Heritage Brands reported revenue of $49.40 million, surpassing the average estimate of $43.23 million, although this represented a year-over-year decrease of 4.6% [4] Stock Performance - PVH shares have returned 16.5% over the past month, outperforming the Zacks S&P 500 composite, which increased by 5.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - PVH reported quarterly earnings of $2.30 per share, exceeding the Zacks Consensus Estimate of $2.24 per share, but down from $2.45 per share a year ago, representing an earnings surprise of 2.68% [1] - The company posted revenues of $1.98 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 2.49% and showing a slight increase from $1.95 billion year-over-year [2] - Over the last four quarters, PVH has consistently surpassed consensus EPS and revenue estimates [2] Stock Performance - PVH shares have declined approximately 22% since the beginning of the year, contrasting with the S&P 500's gain of 1.5% [3] - The current Zacks Rank for PVH is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $2.54 on revenues of $2.08 billion, and for the current fiscal year, it is $12.59 on revenues of $8.72 billion [7] - The outlook for the Textile - Apparel industry, where PVH operates, is currently in the bottom 27% of over 250 Zacks industries, which may impact stock performance [8]

Revenue Performance - Total revenue for 2024 was $8.7 billion, with over 70% generated outside the United States, and TOMMY HILFIGER and Calvin Klein brands together accounted for over 95% of revenue [144]. - In the first quarter of 2025, revenue was $1.984 billion, a 2% increase from $1.952 billion in the same period of 2024 [162]. - Approximately 6% of revenue and 20% of income before interest and taxes were generated in China in 2024, with ongoing investigations by China's Ministry of Commerce posing potential risks [146]. - EMEA revenue increased by $45 million, or 5%, driven by growth in wholesale and direct-to-consumer businesses [164]. - Americas revenue increased by $39 million, or 7%, with a negative impact of $5 million, or 1%, from foreign currency translation [164]. - APAC revenue decreased by $51 million, or 13%, primarily due to a challenging consumer environment and a decline related to the Lunar New Year shopping period [164]. Financial Charges and Expenses - The company recorded pre-tax noncash goodwill and other intangible impairment charges of $480 million in Q1 2025 due to increased discount rates [154]. - Selling, general and administrative expenses in Q1 2025 were $1.024 billion, representing 51.6% of revenue, a slight decrease from 52.1% in Q1 2024 [162]. - The effective tax rate for Q1 2025 was 87.2%, compared to 19.2% in Q1 2024, reflecting significant losses [162]. - Gross profit for Q1 2025 was $1.162 billion, or 58.6% of total revenue, down from $1.199 billion, or 61.4% in Q1 2024 [168]. - The company expects a gross margin decrease of approximately 250 basis points for the full year 2025 compared to 2024 [169]. - Noncash impairment charges of $480 million were recorded in Q1 2025, including $426 million related to goodwill [173]. Cash Flow and Capital Management - Cash and cash equivalents decreased by $557 million to $191 million as of May 4, 2025, primarily due to stock repurchase activities [186]. - Cash used by operating activities was $71 million in Q1 2025, relatively flat compared to $67 million in Q1 2024 [189]. - Capital expenditures in Q1 2025 were $27 million, down from $39 million in Q1 2024, with a projected total of approximately $200 million for the full year 2025 [194]. - Cash dividends paid on common stock totaled $2 million in both Q1 2025 and Q1 2024, with a projected total of approximately $8 million for 2025 [195]. - The company completed the sale of women's intimates businesses for net proceeds of $156 million in Q4 2023, with an additional $10 million earnout received in Q1 2024 [192]. - The company repurchased $500 million of common stock under an ASR agreement, receiving approximately 4.6 million shares at a price of $76.43 per share [197]. Debt and Financing - As of May 4, 2025, the company had $115 million of borrowings outstanding under the commercial paper program as of May 4, 2025, with a weighted average interest rate of 5.15% [203]. - The company entered into delayed draw term loan facilities with aggregate commitments of $700 million, maturing in April 2026 [204]. - The company maintained compliance with all applicable financial and non-financial covenants under its financing arrangements as of May 4, 2025 [218]. - The issuer credit rating was BBB- by Standard & Poor's and Baa3 by Moody's, both with a positive outlook as of May 4, 2025 [219]. Foreign Currency Impact - The company anticipates that the translational impact of foreign currency on 2025 revenue and net income will be immaterial compared to 2024 [157]. - During the thirteen weeks ended May 4, 2025, the company recognized favorable foreign currency translation adjustments of $234 million, primarily due to a 9% weakening of the United States dollar against the euro [226]. - A 10% change in foreign currency exchange rates against the United States dollar would result in a change in the fair value of foreign currency forward contracts of approximately $110 million [229]. - The company designated €1.125 billion of senior notes as net investment hedges against its investments in foreign subsidiaries using the euro as their functional currency [230]. - A 10% change in the euro against the United States dollar would result in a change in the fair value of net investment hedges of approximately $180 million [231]. Pension and Benefit Costs - A 1% change in the assumed rate of return on pension plan assets would result in a change to 2025 net benefit cost of approximately $4 million [232]. - A 0.25% change in the assumed discount rate would result in a change to 2025 net benefit cost of approximately $16 million [232]. Strategic Initiatives - The PVH+ Plan aims to enhance the desirability of Calvin Klein and TOMMY HILFIGER, positioning PVH as a top-performing brand group in the sector [145]. - The transition of previously licensed women's product categories in-house is expected to result in a less than 1% increase in revenue and a 50 basis point decline in gross margin in 2025 [156]. - The company expects equity in net income of unconsolidated affiliates for full year 2025 to be relatively flat compared to 2024 [178].

Revenue Performance - Q1 2025 revenue increased 2% to $1.984 billion, exceeding guidance of flat to a decrease of 2%[5] - The Company reported revenue of $1,983.6 million for the quarter ended May 4, 2025, compared to $1,951.9 million for the same quarter in 2024, representing a year-over-year increase of approximately 1.6%[31] - Total revenue for the quarter was $1,983.6 million, a slight increase of 1.6% compared to $1,951.9 million in the same quarter last year[43] - EMEA revenue increased 5% and Americas revenue increased 7% in Q1 2025, while APAC revenue decreased 13%[9] - Revenue by segment showed growth in EMEA at $927.7 million, up from $882.9 million, while the Asia-Pacific segment declined to $351.7 million from $402.5 million[43] - Tommy Hilfiger brand revenue increased by 3.4% to $1,048.1 million, while Calvin Klein remained relatively stable with a slight decrease of 0.1%[49] - Direct-to-Consumer revenue decreased by 3.4% to $816.5 million, driven by a 4.9% decline in owned and operated retail stores[49] Earnings and Profitability - Non-GAAP EPS for Q1 2025 was $2.30, surpassing guidance of $2.10 to $2.25[5] - Full year 2025 EPS projected to be in the range of $10.75 to $11.00, down from previous guidance of $12.40 to $12.75[5] - Gross margin for Q1 2025 was 58.6%, down from 61.4% in the prior year period[16] - Gross profit for the quarter was $1,161.7 million, down from $1,198.7 million in the prior year, indicating a decrease of about 3.1%[31] - Earnings before interest and taxes (EBIT) on a non-GAAP basis was $160.5 million, down from $195.1 million year-over-year[36] - The net loss for the quarter was $44.8 million, compared to a net income of $151.4 million in the prior year, reflecting a significant decline[31] - The diluted net loss per common share was $0.88 for the quarter, compared to diluted net income per share of $2.59 in the same quarter of the previous year[31] Financial Position and Cash Flow - Cash and cash equivalents decreased to $191.0 million from $376.2 million year-over-year, indicating liquidity challenges[41] - The company’s total assets decreased to $10,672.4 million from $10,788.7 million, reflecting a decline in overall financial position[41] - Inventory increased 19% compared to the prior year, driven by investments in core product availability[16] Costs and Expenses - Selling, general and administrative expenses were $1,023.9 million for the quarter, slightly up from $1,017.3 million in the same quarter last year[31] - SG&A expenses on a non-GAAP basis were reported at $1,010.7 million, compared to $1,023.9 million in the previous year[36] - The Company incurred pre-tax restructuring costs totaling $24 million in 2024, primarily related to severance and the sale of a warehouse and distribution center[27] - The Company recognized $28 million in actuarial losses on retirement plans and $24 million in restructuring costs related to Growth Driver 5 Actions[50] Strategic Initiatives and Outlook - Full year 2025 revenue outlook reaffirmed as flat to slightly increase, with projected operating margin around 8.5%[23] - The Company emphasizes the importance of non-GAAP financial measures to provide a clearer view of ongoing operations, excluding non-recurring and non-operational amounts[33] - The Company plans to simplify its operating model through a multi-year initiative, which includes centralizing processes and improving systems[28] - Forward-looking statements regarding future revenue and earnings are subject to risks and uncertainties, including economic conditions and changes in consumer sentiment[28] - Estimated net negative impact of tariffs on full year 2025 EBIT is approximately $65 million, or $1.05 per share[15] Impairments and Charges - The Company recorded pre-tax noncash goodwill and other intangible asset impairment charges of $480 million in the first quarter of 2025, primarily due to a significant increase in discount rates[27] - Goodwill and other intangible asset impairments amounted to $479.5 million for the quarter, significantly impacting net income[37] - Effective tax rate for Q1 2025 was 87.2% on a GAAP basis, influenced by non-deductible impairment charges[16]

Core Viewpoint - PVH Corp., owner of brands like Tommy Hilfiger and Calvin Klein, is expected to report a decline in quarterly earnings and revenue for the first quarter, with analysts projecting earnings of $2.25 per share and revenue of $1.93 billion [1] Group 1: Earnings and Revenue Expectations - Analysts anticipate PVH will report quarterly earnings of $2.25 per share, down from $2.45 per share in the same period last year [1] - The projected quarterly revenue for PVH is $1.93 billion, compared to $1.95 billion a year earlier [1] Group 2: Analyst Coverage and Price Target - Needham analyst Tom Nikic has initiated coverage on PVH with a Buy rating and set a price target of $115 [2] Group 3: Dividend Information - PVH currently offers an annual dividend yield of 0.18%, translating to a quarterly dividend of 4 cents per share [2] - To earn $500 monthly from dividends, an investment of approximately $3,301,600 or around 40,000 shares is required, while $100 monthly would need about $660,320 or 8,000 shares [2] Group 4: Stock Price and Dividend Yield Relationship - The dividend yield is calculated by dividing the annual dividend payment by the stock's current price, which can fluctuate based on changes in stock price and dividend payments [3][4] - For example, if a stock pays an annual dividend of $2 and is priced at $50, the yield is 4%, but if the price rises to $60, the yield drops to 3.33% [3]

Core Viewpoint - PVH Corporation is expected to report a decline in both revenue and earnings for the first quarter of fiscal 2025, with revenues estimated at $1.9 billion, reflecting a 0.8% decrease year-over-year, and earnings per share projected at $2.23, indicating a decline of approximately 9% year-over-year [1][2]. Financial Performance - The company had an earnings surprise of 2.5% in the last reported quarter, with an average trailing four-quarter earnings surprise of 16.4% [2]. - Management previously anticipated revenues to be flat to down 2% year-over-year, with a gross margin contraction of about 250 basis points due to increased freight costs and discounts related to product delays [4]. - Interest expenses are expected to rise to $20 million compared to $18 million in the first quarter of 2024 [4]. Segment Performance - The Heritage Brands segment has been experiencing sluggishness, particularly in the women's intimates business, which has negatively impacted sales and earnings [3]. - The wholesale channel is under pressure due to declining sales in the Heritage Brands women's intimates business and efforts to reduce sales in Europe [3][5]. Market Conditions - Higher raw material costs and currency headwinds are anticipated to have adversely affected profitability [2]. - Increased investments in direct-to-consumer and international businesses have added to costs, further impacting margins [2]. Strategic Initiatives - PVH's PVH+ Plan aims to accelerate growth by enhancing core strengths and connecting key brands with consumers, which may provide some support to quarterly performance [6]. Valuation Metrics - PVH shares are trading at a forward 12-month price-to-earnings ratio of 6.47X, below the five-year median of 8.92X and the industry average of 12.72X, indicating an attractive investment opportunity [9]. - Over the past three months, PVH's shares have gained 19.1%, contrasting with a 6.5% decline in the industry [10].