PVH Corp. CEO Stefan Larsson said that the company finished 2024 strong and well-positioned for 2025, supported  by the strength of the company’s Calvin Klein and Tommy Hilfiger brands, and disciplined execution of the company’s PVH+ Plan. The company beat expectations for revenues and better-than-expected earning for the fourth quarter while its 2025 outlook revealed expectations for flat to positive growth in 2025.

Wall Street appears to agree with the CEO’s sentiment as PVH shares jumped more than 18 percent in early trading on the NYSE on Tuesday, April 1. No fooling.

Evercore analyst Michael Binetti said in a note to investors that some of the company’s initiatives are starting to stabilize the business, but he also cautioned that there are some new pressure points to watch, including slowing sales in China.

A supplemental announcement on Monday, March 31 may also have had an effect on the share gain as the company plans to enter into accelerated share repurchase (ASR) agreements with one or more dealers to repurchase $500 million of the company’s common stock. The agreements are being entered into under the company’s existing $5.0 billion stock repurchase authorization, of which $1.8 billion was available for share repurchases as of February 2, 2025, the end of its most recent fiscal year. PVH said it intends to enter into the agreements in the coming days.

This ASR equates to a repurchase of approximately 7.7 million shares of the company’s common stock based on the closing stock price on March 31, 2025, which represents approximately 14 percent of the company’s weighted average diluted shares outstanding during the fourth quarter of its 2024 fiscal year. The total number of shares ultimately repurchased through the ASR will be determined upon final settlement and will be based on the volume-weighted average price of PVH’s common stock during the term of the ASR agreements, less a discount, and subject to customary adjustments pursuant to the terms and conditions of the ASR agreements.

“Over the course of the last several years we have continuously strengthened our balance sheet, driven by our robust cash flow generation,” said company CFO Zac Coughlin in a media release regarding the ASR plan. “We have demonstrated a prudent and balanced approach to capital allocation, including first and foremost investing in our growth initiatives – all while reinforcing our strong commitment to our investment grade credit ratings.

Coughlin hinted that the current valuation of PVH stock relative to its long-term growth potential to unlock the power of its brands through the PVH+ Plan offers “a unique opportunity to return significant capital to shareholders.”

Fourth Quarter Summary
Fourth quarter revenue decreased 5 percent, or -2 percent in constant-currency (cc) terms to $2.37 billion, compared to $2.49 billion in the prior-year Q4 period , including a 3 percent decline versus the 53rd week in 2023 and a 1 percent decline resulting from the sale of the Heritage Brands women’s intimates business in November 2023.

  • Tommy Hilfiger revenue decreased 5 percent (- 3 percent cc) compared to the prior year period.
    • Tommy Hilfiger International revenue decreased 7 percent (decreased 4 percent on a constant currency basis).
    • Tommy Hilfiger North America revenue was flat.
  • Calvin Klein revenue decreased 2 percent (+1 percent cc) compared to the prior year period.
    • Calvin Klein International revenue decreased 4 percent (-1 percent cc) year-over-year.
    • Calvin Klein North America revenue increased 3 percent in Q4, primarily driven by the timing of wholesale shipments.
  • Heritage Brands revenue decreased 41 percent compared to the prior year period, which included a 28 percent decrease resulting from the sale of the Heritage Brands women’s intimates business.

International revenue decreased 6 percent (-3 percent cc) compared to the prior-year Q4 period, including a 3 percent decline from the 53rd week in 2023.

North America revenue in the Tommy Hilfiger and Calvin Klein businesses combined increased 1 percent compared to the prior-year period, as the benefit from a shift in the timing of wholesale shipments from the third quarter into the fourth quarter was largely offset by a decline from the 53rd week in 2023.

DTC (Direct-to-Consumer) revenue decreased 5 percent (-2 percent cc) compared to the prior-year Q4 period, including a 4 percent decline from the impact of the 53rd week in 2023.

  • Revenue in the company’s owned and operated stores decreased 4 percent (-1 percent cc) compared to the prior-year Q4 period.
  • Revenue in the company’s owned and operated digital commerce business decreased 10 percent (-8 percent cc), compared to the prior-year Q4 period, as growth in North America was more than offset by the continuation of the company’s planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region.

Wholesale revenue decreased 5 percent compared to the prior year period (decreased 2 percent on a constant currency basis), including a 2 percent reduction resulting from the sale of the Heritage Brands women’s intimates business. The decline also reflects the continued strategic reduction of sales in Europe to drive overall higher quality of sales in the region, partially offset by the impact of the timing of wholesale shipments in North America.

Profitability
Gross margin was 58.2 percent of revenue in the fourth quarter, compared to 60.3 percent in the prior-year Q4 period. The decrease reportedly reflects impacts from an increased promotional environment, an unfavorable shift in channel mix, and higher freight costs.

Earnings Before Interest and Taxes (EBIT) on a GAAP basis was $210 million, including an $8 million negative impact attributable to foreign currency translation, compared to $357 million in the prior year period. Included in the fourth quarter was a recognized actuarial loss on retirement plans of $28 million and included in the prior year period was a recognized actuarial gain on retirement plans of $46 million.

  • EBIT on a GAAP basis for these periods also included the other amounts for the applicable period described under the heading “Non-GAAP Exclusions” later in this release. EBIT on a non-GAAP basis for these periods excluded these amounts.
  • EBIT on a non-GAAP basis was $244 million, including the $8 million negative impact attributable to foreign currency translation, compared to $301 million in the prior year period. The decrease was primarily driven by the revenue and gross margin declines discussed above. The company continues to take a disciplined approach to managing expenses, driving cost efficiencies while making targeted investments to drive its strategic initiatives.

Earnings Per Share (EPS) on both GAAP and non-GAAP basis for the fourth quarter of 2024 includes the negative impact of 12 cents per share related to foreign currency translation.

  • GAAP Basis: $2.83 per share in Q4, compared to $4.55 in the prior-year Q4 period.
  • Non-GAAP Basis: $3.27 per share in Q4, compared to $3.72 in the prior year period.

Interest expense decreased to $14 million from $20 million in the prior year period.

Effective tax rate was 20.0 percent on a GAAP basis compared to 19.3 percent in the prior-year Q4 period. The effective tax rate was 21.4 percent on a non-GAAP basis in Q4 compared to 21.1 percent in the prior-year period.

2025 Full Year Summary

Revenue decreased 6 percent to $8.653 billion compared to 2023 (decreased 5 percent on a constant currency basis), including a 2 percent decline resulting from the sale of the Heritage Brands women’s intimates business and a 1 percent decline from the 53rd week in 2023.

  • Tommy Hilfiger revenue decreased 5 percent (-4 percent cc) compared to 2023.
    • Tommy Hilfiger International revenue decreased 7 percent (-6 percent cc) as the planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region weighed more heavily on the Tommy Hilfiger business.
    • Tommy Hilfiger North America revenue was flat year-over-year.
  • Calvin Klein revenue decreased 1 percent compared to 2023.
    • Calvin Klein International revenue decreased 2 percent (flat cc).
    • Calvin Klein North America revenue decreased 1 percent.
  • Heritage Brands revenue decreased 57 percent compared to 2023, including a 45 percent decrease resulting from the sale of the Heritage Brands women’s intimates business.

EBIT on a GAAP basis was $772 million, including a $12 million negative impact due to foreign currency translation, compared to $929 million in 2023. These results included the amounts for the applicable period described under the heading “Non-GAAP Exclusions” later in this release. EBIT on a non-GAAP basis for these periods excluded these amounts.

EBIT on a non-GAAP basis was $865 million, including the $12 million negative impact due to foreign currency translation, compared to $931 million in 2023. The impact of the revenue decline discussed above was partly offset by a 120 basis point improvement in gross margin primarily driven by a favorable shift in channel mix and lower product costs. The company continues to take a disciplined approach to managing expenses, driving cost efficiencies while making targeted investments to drive its strategic initiatives.

EPS on GAAP basis was $10.56 per share in 2024 compared to $10.76 in 2023. On a Non-GAAP basis, EPS was $11.74 per share in 2024 compared to $10.68 in 2023. EPS on both a GAAP and a non-GAAP basis for 2024 includes the negative impact of 18 cents per share related to foreign currency translation.

Interest expense decreased to $67 million from $88 million in 2023 primarily due to the repayment in 2023 of the $100 million 7.75 percent debentures and an increase in interest income.

Effective tax rate for the year was 15.2 percent on a GAAP basis, compared to 21.1 percent in 2023. The effective tax rate was 16.7 percent on a non-GAAP basis compared to 21.9 percent in 2023. The decline in the tax rates on a GAAP and non-GAAP basis compared to 2023 is primarily due to a tax benefit in the second quarter of 2024 related to the favorable settlement of a multi-year audit in an international jurisdiction.

“In 2024, we beat our EPS guidance on a non-GAAP basis and delivered better-than-expected revenue in constant currency, with record gross margins and double-digit non-GAAP EBIT margin,” added company CEO Larsson. “In a challenging macro, we delivered another year of strong profitability in North America, drove sequential improvements in our wholesale order books in Europe while improving our quality of sales, and we achieved our third consecutive year of growth in Asia Pacific on a constant currency basis.

Balance Sheet Summary
Inventory at year-end increased 6 percent compared to the prior year-end period, said to be primarily due to “a purposeful investment in core inventory to improve overall availability and lean inventory levels in the prior-year period.”

“For the full year 2024, we delivered on the commitments we set out at the beginning of the year, despite a tougher-than-expected macroeconomic backdrop,” offered Coughlin. “We leaned into the next level of PVH+ Plan execution across the company to create value by increasing the quality of sales and driving gross margin improvements and cost efficiencies to deliver significant cash flow from operations. Reflecting our conviction in our long-term growth potential and our strong balance sheet, we repurchased $500 million in stock during 2024, and we will be separately announcing our intent to repurchase $500 million in additional shares through ASR agreements in 2025 to opportunistically capture our attractive valuation and deliver returns for shareholders.”

Stock Repurchase Program
Delivering on its commitment under the PVH+ Plan to return excess cash to stockholders, the company repurchased 2.4 million shares of its common stock for $247 million during the fourth quarter of 2024, bringing total share repurchases for the full year 2024 to 4.7 million shares for approximately $500 million.

2025 Outlook
CFO Coughlin offered his thoughts on the road ahead, adding, “Looking ahead, we are positioning the company for long-term, sustainable growth and remain relentlessly focused on fueling our brand-building consumer flywheel to unlock our full potential around the world. In North America, we will continue to drive a double-digit EBIT margin; in Europe, our Fall 2025 order books are back to growth; and in the Asia Pacific, we will continue to focus on driving strong consumer engagement across our diversified business in the region. I want to thank our teams globally for all their hard work as we take this major step toward delivering on our vision.”

2025 Full Year Guidance

  • Revenue is projected to be flat to increase slightly compared to 2024 (flat to increase slightly on a constant currency basis).
  • Operating margin is projected to be flat to increase slightly on a non-GAAP basis compared to 10.0 percent on a non-GAAP basis in 2024. Operating margin on a GAAP basis was 8.9 percent in 2024.
  • EPS is projected to be in a range of $12.40 to $12.75 on a non-GAAP basis compared to $10.56 on a GAAP basis and $11.74 on a non-GAAP basis in 2024. The 2025 EPS projection includes the estimated negative impact of approximately $0.20 per share related to foreign currency translation. EPS on a GAAP basis for 2024 included the amounts described under the heading “Non-GAAP Exclusions” later in this release. EPS on a non-GAAP basis for 2024 excluded these amounts.
  • Interest expense is projected to increase to approximately $85 million compared to $67 million in 2024 primarily due to the impact of funding the accelerated share repurchase program discussed above.
  • Effective tax rate is projected to be approximately 22 percent.

First Quarter 2025 Guidance

  • Revenue is projected to be flat to decrease 2 percent compared to the first quarter of 2024 (flat to decrease 1 percent on a constant currency basis).
  • EPS is projected to be in a range of $2.10 to $2.25 on a non-GAAP basis compared to $2.59 on a GAAP basis and $2.45 on a non-GAAP basis in the first quarter of 2024. The first quarter 2025 EPS projection includes the estimated negative impact of approximately $0.05 per share related to foreign currency translation. EPS on a GAAP basis for the first quarter of 2024 included the amount described under the heading “Non-GAAP Exclusions” later in this release. EPS on a non-GAAP basis excluded this amount.
  • Interest expense is projected to increase to approximately $20 million compared to $18 million in the first quarter of 2024.
  • Effective tax rate is projected to be approximately 18 percent.

The company said it is unable to project full-year 2025 operating margin and full-year and first-quarter 2025 EPS on a GAAP basis without unreasonable efforts as there are significant uncertainties concerning the amount and timing of the restructuring costs to be incurred during 2025 in connection with the Growth Driver 5 Actions. As such, the company is unable to provide a full reconciliation of its full-year 2025 operating margin and full-year and first-quarter 2025 EPS guidance on a non-GAAP basis to the corresponding measures on a GAAP basis.

Non-GAAP Exclusions
The discussions in the company’s release that refer to non-GAAP amounts exclude the following:

  • Pre-tax loss of $28 million recorded in the fourth quarter of 2024 related to the recognized actuarial loss on retirement plans.
  • Pre-tax net restructuring costs totaling $24 million incurred in 2024 consisting principally of severance and the gain on the sale of a warehouse and distribution center in the third quarter in connection with the company’s multi-year initiative announced in 2024 to simplify its operating model by centralizing processes and improving systems and automation to drive more efficient, cost-effective ways of working across the organization (“Growth Driver 5 Actions”), of which $15 million was incurred in the second quarter, $3 million incurred in the third quarter and $6 million incurred in the fourth quarter.
  • Pre-tax costs of $51 million, incurred in the third quarter of 2024 in connection with an amendment to Mr. Tommy Hilfiger’s employment agreement, pursuant to which the company made a cash buyout of a portion of future payments to Mr. Hilfiger.
  • Pre-tax gain of $10 million recorded in the first quarter of 2024 in connection with the company’s sale of the Heritage Brands women’s intimates business.
  • Pre-tax gain of $46 million recorded in the fourth quarter of 2023 related to the recognized actuarial gain on retirement plans.
  • Pre-tax net gain of $13 million recorded in the fourth quarter of 2023 in connection with the sale of the company’s Heritage Brands women’s intimates business, which includes a gain on the sale, less costs to sell, and severance and other termination benefits associated with the transaction.
  • Pre-tax restructuring costs of $61 million incurred in 2023 consisting principally of severance related to actions taken in the second and third quarters of 2023 under the plans announced in August 2022 to reduce people costs in the company’s global offices by approximately 10 percent by the end of 2023, of which $39 million was incurred in the second quarter, $19 million was incurred in the third quarter and $4 million was incurred in the fourth quarter.
  • Estimated tax effects associated with the above pre-tax items, which are based on the company’s assessment of deductibility. In making this assessment, the company evaluated each item that it had identified above as a non-GAAP exclusion to determine if such item was taxable or tax deductible, in which case the tax effect was taken at the applicable income tax rate in the local jurisdiction, or non-taxable or non-deductible, in which case the company assumed no tax effect.

Image courtesy Tommy Hilfiger