PVH(US:PVH)2023-12-06 16:00Revenue and Earnings - The company reported revenue of $9.0 billion in 2022, with over 65% generated outside the United States, and over 90% of revenue coming from TOMMY HILFIGER and Calvin Klein brands [155]. - Total revenue for the third quarter of 2023 was $2.363 billion, a 4% increase from $2.281 billion in the same quarter of the previous year, with a 3% positive impact from foreign currency translation [177]. - For the thirty-nine weeks ended October 29, 2023, total revenue was $6.728 billion, a 3% increase from $6.536 billion in the prior year, including a 1% positive impact from foreign currency translation [187]. - The company expects full-year 2023 revenue to increase approximately 1% compared to 2022, with a projected decrease of 3% to 4% in the fourth quarter [189]. - The company anticipates a revenue increase of approximately $45 million in 2023 due to favorable foreign currency translation [172]. Cost and Expenses - Inflationary pressures negatively impacted revenue and earnings in 2022 and continued through the first nine months of 2023, with increased labor and product costs leading to a slowdown in consumer demand [162]. - The company expects to incur approximately $7 million in the fourth quarter of 2023 related to its 2022 cost savings initiative, which aims to reduce people costs by approximately 10% by the end of 2023, resulting in annual savings of over $100 million [171]. - SG&A expenses for the third quarter of 2023 were $1.124 billion, maintaining 47.6% of total revenue, with increases attributed to a change in revenue mix and higher marketing investments [180]. - SG&A expenses for the thirty-nine weeks ended October 29, 2023 were $3.326 billion, or 49.4% of total revenue, up from 48.9% in the prior year, due to a change in revenue mix and increased strategic investments [192]. - SG&A expenses as a percentage of revenue for Q4 2023 are expected to increase by approximately 100 basis points compared to Q4 2022, driven by changes in revenue mix and higher expenses in direct-to-consumer channels [194]. Impairments and Charges - The company recorded a pre-tax noncash goodwill impairment charge of $417 million in the third quarter of 2022 due to increased discount rates from economic conditions [171]. - The company recorded a pre-tax noncash goodwill impairment charge of $417 million in the third quarter of 2022, driven by increased discount rates due to economic conditions [182]. Foreign Currency Impact - The company expects 2023 revenue and net income to increase by approximately $45 million and $7 million, respectively, due to foreign currency translation [238]. - Unfavorable foreign currency translation adjustments recognized during the thirty-nine weeks ended October 29, 2023, amounted to $150 million, primarily due to a 3% strengthening of the U.S. dollar against the euro [239]. - The company anticipates a decrease in 2023 net income by approximately $75 million compared to 2022 due to the transactional impact of foreign currency, with an expected negative impact on gross margin of approximately 100 basis points [241]. Cash and Debt Management - Cash and cash equivalents decreased to $358 million as of October 29, 2023, down from $551 million at January 29, 2023, impacted by $266 million in stock repurchases [205]. - The company expects long-term debt repayments of approximately $112 million during 2023, including $100 million of debentures repaid on November 15, 2023 [222]. - As of October 29, 2023, loans outstanding under the Euro TLA facility amounted to $455 million, net of debt issuance costs [229]. - Approximately 80% of the company's long-term debt was at a fixed interest rate as of October 29, 2023 [235]. Ratings and Outlook - As of October 29, 2023, the issuer credit rating was BBB- with a positive outlook from Standard & Poor's [232].