Why PVH Stock Tumbled Today

Core Viewpoint - PVH reported solid first-quarter earnings but lowered its full-year outlook, leading to a significant drop in its stock price by 17.7% [1][8] Financial Performance - Revenue increased by 2% to $1.98 billion, surpassing guidance which anticipated flat to a 2% decline, and exceeding estimates of $1.93 billion [3] - Revenue growth was 5% in the EMEA region and 7% in the Americas, while it fell by 13% in Asia-Pacific due to a challenging consumer environment in China [3] - Gross margin decreased from 61.4% to 58.6% due to a shift from direct-to-consumer to wholesale and a more promotional environment [4] - Adjusted earnings per share (EPS) fell from $2.45 to $2.30, beating the company's guidance of $2.10-$2.25 and consensus estimates of $2.25 [4] Impairments and Inventory - PVH recorded a $480 million goodwill impairment charge attributed to a significant increase in discount rates [5] - Inventory rose by 19%, as the company invested in core product inventory to enhance availability and support projected sales growth for the second quarter [5] Management Insights - CEO Stefan Larsson noted that the company capitalized on global consumer interest in Calvin Klein and Tommy Hilfiger, achieving revenue growth compared to the previous year and exceeding guidance [6] Future Outlook - Management acknowledged macroeconomic uncertainties impacting the business, leading to a second-quarter guidance that fell short of expectations [7] - For the current period, management anticipates low single-digit revenue growth but adjusted EPS to decline to $1.85-$2.00 from $3.01 in the same quarter last year [7] - Estimated tariffs are expected to negatively impact operating profit by $65 million, equating to a $1.05 per share reduction [7] Valuation - Despite the challenges, PVH is considered to offer attractive value with a price-to-earnings ratio of less than 7 [8]