PVH CORP. /DE/ (PVH)·Q1 2026 Earnings Summary

Executive Summary

• PVH delivered Q1 2025 (company fiscal Q1 2026) revenue above guidance with non-GAAP EPS modestly ahead of guidance, but cut full-year EPS and operating margin outlooks on tariffs, a more promotional environment, and transitory Calvin Klein operational issues .
• Revenue grew 2% to $1.984B vs. flat to -2% guidance; non-GAAP EPS was $2.30 vs. $2.10–$2.25 guidance; GAAP EPS was $(0.88) due to a $480M non-cash impairment .
• FY2025 EPS guidance reduced to $10.75–$11.00 (from $12.40–$12.75) and operating margin to ~8.5% non-GAAP, citing an estimated unmitigated tariff impact of ~$1.05 per share and CK operational headwinds; revenue outlook reaffirmed as flat to slightly up .
• Key near-term stock catalysts: tariff trajectory/mitigation, Q2 delivery against a more promotional backdrop, Europe order book strength, and evidence of CK operational normalization into H2 and Spring ’26 .

What Went Well and What Went Wrong

What Went Well

• Revenue beat and EPS above guidance: Q1 revenue +2% to $1.984B (vs. flat to -2% guided) and non-GAAP EPS $2.30 (vs. $2.10–$2.25 guided) .
• Brand/product execution proof points: CEO cited 25% growth in CK Icon Cotton Stretch men’s underwear (Bad Bunny campaign) and +14% in CK fashion denim; Tommy drove strong lifestyle storytelling and cultural activations (e.g., Met Gala, F1 tie-ins) .
• Regional positives: EMEA revenue +5% YoY with DTC returning to growth; Americas revenue +7% with high teens wholesale strength (including CK women’s sportswear/jeans transition) and double‑digit EBIT margins in region .

What Went Wrong

• Guidance cuts and margin pressure: FY EPS reduced to $10.75–$11.00 and operating margin to 8.5% non-GAAP due to tariffs ($65M EBIT, ~$1.05/share unmitigated), a more promotional environment, and CK operational delays; Q1 gross margin fell 280 bps YoY to 58.6% .
• APAC softness: APAC revenue -13% YoY (Lunar New Year timing and weak consumer, particularly China); management remains on MOFCOM’s unreliable entity list, reinforcing uncertainty .
• Inventory and mix: Inventory +19% YoY (purposeful core build, support for Q2 growth, earlier summer receipts) and higher wholesale mix/promotions pressured gross margin; CK shipment delays required incremental freight discounts .

Financial Results

Headline results vs prior quarters and estimates

*Values retrieved from S&P Global.

Segment and brand breakdown (Q1 2026)

KPIs and cost structure (Q1 2026)

• Channel: DTC revenue -3%; owned stores -5%; owned digital +3%; wholesale +6% .
• Gross margin 58.6% (-280 bps YoY) on unfavorable channel mix, increased promotions, licensing-to-inhouse mix shift, freight/discounts from CK delivery delays .
• SG&A 50.5% of revenue (90 bps improvement YoY) on cost savings; operating margin 8.1% .
• Interest expense $17M; non-GAAP tax rate ~17.1% .
• Inventory +19% YoY on core availability, Q2 growth support, earlier summer receipts .
• Capital return: 5.4M shares repurchased; $561M paid in Q1; ASR $500M entered in April; no additional 2025 repurchases anticipated beyond ASR settlement .

Guidance Changes

Context and drivers:

• Tariffs: estimated $65M unmitigated EBIT headwind in FY2025 ($1.05/share) with mitigation actions weighted to H2; FX +$0.10/share tailwind; macro/promotional pressure persists .
• CK operational issues (first globally created product season) to lessen in H2 and normalize by Spring ’26, supporting margin exit rate .

Earnings Call Themes & Trends

Management Commentary

• “In Q1, we continued to tap into the global consumer love for Calvin Klein and TOMMY HILFIGER, delivering revenue growth versus last year and ahead of guidance... Calvin Klein saw one of its most impactful product launches in years with the Icon Cotton Stretch franchise, amplified by the viral Bad Bunny campaign.” — CEO Stefan Larsson .
• “We are reaffirming our revenue guidance for the year but are decreasing our outlook for profitability and earnings per share to reflect [macro]... investing in cut-through marketing campaigns and delivering increasing cost efficiencies through [Growth Driver 5].” — CFO Zac Coughlin .
• “We expect to exit 2025 back at double digit operating margins... with higher on time deliveries, increased product go‑in margins, and stronger commercial plans amplified by increased marketing investments.” — CFO .
• “We are on a multi‑year journey to unlock the full potential of Calvin, Tommy and PVH... step by step building them into the most desirable lifestyle brands in the world.” — CEO .

Q&A Highlights

• Demand/momentum amid promos: CK underwear Icon Cotton Stretch +25% and fashion denim +14% illustrate product+marketing flywheel despite macro; Tommy leveraging iconic lifestyle with F1 activation .
• Tariffs: ~$65M unmitigated EBIT impact; mitigation via sourcing optimization, strategic discount reductions, and selective pricing where there is pricing power; only ~30% of revenue is U.S. .
• Gross margin cadence: ~250 bps FY decline vs prior plan, with ~80 bps from tariffs and ~100 bps from increased promotions; H2 improvement expected as CK issues ease, though promotions to persist .
• Exit rate: Expect double‑digit operating margin exiting FY2025 driven by seasonality and 200 bps SG&A savings by Q4 from Growth Driver 5 .

Guidance Changes

(See “Guidance Changes” table above for specifics.)

• Added Q2 2025 guide: revenue low-single-digit increase, EPS $1.85–$2.00, tax ~20%, interest ~$25M; tariffs ~$(0.20)/share .
• FY2025 EPS cut to $10.75–$11.00 with ~$(1.05) per share unmitigated tariff headwind, partially offset by mitigation and +$0.10 FX tailwind .

Estimates Context

• Q1 2026 beat vs S&P Global consensus: Revenue $1.9836B vs $1.9346B*, EPS $2.30 vs $2.2502*; prior quarters also exceeded Street (Q3 and Q4) .
• Street models will need to converge to lowered FY EPS range ($10.75–$11.00) and ~8.5% operating margin as companies embed tariff headwinds and promotional pressure .
  *Values retrieved from S&P Global.

Other Relevant Press Releases (Q1 2026)

• PVH announced a specialized outerwear category licensing agreement with Herman Kay-Mystic LLC for CK and TOMMY in U.S./Canada wholesale, launching Spring 2026—aligned with the strategy to bring core lifestyle categories in-house while partnering on specialized categories .

Key Takeaways for Investors

• Tariffs are the primary new headwind ($65M EBIT/$1.05 per share unmitigated) layered onto an already promotional environment; mitigation and sourcing agility will be critical into H2 .
• Europe continues to inflect positively with DTC growth and order book improvement; Americas wholesale momentum aided Q1, but U.S. traffic softness and promotions weigh on margins .
• CK operational normalization is a key H2 lever; management indicates Spring ’26 is back on time with improved “go-in” margins—watch evidence of delivery timing and margin recapture .
• Growth Driver 5 SG&A savings should build through the year, targeting ~200 bps by Q4 and double‑digit exit operating margins; execution proof will matter for multiple support .
• Inventory is elevated intentionally in core (fresh/current), supporting Q2 sales and campaign activations; monitor pace of normalization and promo intensity .
• Capital returns: $500M ASR underway; share count reduction supports EPS even as operating margin resets; expect no additional repurchases beyond ASR settlement in 2025 .
• Near-term trading skew hinges on Q2 delivery vs guide under promotions/tariffs and updates on China/MOFCOM status; medium-term thesis depends on brand flywheel scaling, Europe strength, CK recovery, and cost saves .

Appendices

Non-GAAP and One-time Items (Q1 2026)

• $480M non-cash goodwill/intangible impairment (mainly discount rate increase) and $13M pre-tax restructuring (Growth Driver 5) excluded from non-GAAP results .

Conference Call Logistics

• Q1 2026 call held June 5, 2025; investor relations contacts in release .