On March 31, 2025, PVH Corp (PVH, Financial) released its 8-K filing detailing its financial results for the fourth quarter and full year of 2024. PVH Corp, a global apparel company known for its iconic brands Calvin Klein and Tommy Hilfiger, operates in over 40 countries, offering a wide range of fashion categories including men's dress shirts, ties, sportswear, underwear, and jeans. The company also manages e-commerce sites and approximately 1,500 stores worldwide.
Performance Overview and Challenges
PVH Corp reported a 5% decrease in fourth-quarter revenue to $2.372 billion, surpassing its guidance of a 6% to 7% decline. On a constant currency basis, the revenue decreased by 2%. The full-year revenue also saw a 6% decline to $8.653 billion, aligning with the company's guidance. Despite these declines, the company exceeded its revenue guidance, showcasing resilience in a challenging macroeconomic environment.
The company faced challenges such as an increased promotional environment, unfavorable channel mix shifts, and higher freight costs, which impacted its gross margin, reducing it to 58.2% from 60.3% in the prior year period. Inventory levels increased by 6% due to strategic investments in core inventory.
Financial Achievements and Industry Significance
PVH Corp's non-GAAP earnings per share (EPS) for the fourth quarter was $3.27, exceeding the estimate of $3.11. For the full year, the non-GAAP EPS was $11.74, surpassing the estimate of $10.84. These achievements highlight the company's ability to manage costs and drive profitability despite revenue challenges.
The company's operating margin on a non-GAAP basis was 10.0%, slightly below the guidance of approximately flat to 10.1%. This performance is significant in the apparel and accessories manufacturing industry, where maintaining profitability amidst fluctuating consumer demand and cost pressures is crucial.
Income Statement and Key Metrics
PVH Corp's fourth-quarter earnings before interest and taxes (EBIT) on a GAAP basis was $210 million, compared to $357 million in the prior year period. On a non-GAAP basis, EBIT was $244 million, down from $301 million in the previous year. The decrease was primarily driven by revenue and gross margin declines.
The company's effective tax rate was 20.0% on a GAAP basis and 21.4% on a non-GAAP basis. Interest expense decreased to $14 million from $20 million in the prior year period, reflecting improved financial management.
Commentary and Strategic Outlook
Stefan Larsson, Chief Executive Officer, commented, “Driven by the strength of our two iconic global brands, Calvin Klein and TOMMY HILFIGER, and our disciplined execution of our PVH+ Plan, we finished the year strong and are well-positioned for 2025. 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.”
Looking ahead, PVH Corp projects its 2025 revenue to be flat to slightly increase compared to 2024, with a non-GAAP EPS range of $12.40 to $12.75. The company plans to repurchase $500 million in shares through accelerated share repurchase agreements in 2025, reflecting confidence in its long-term growth potential.
Conclusion
PVH Corp's ability to exceed revenue guidance and achieve strong non-GAAP EPS results in a challenging environment underscores its strategic execution and brand strength. As the company navigates macroeconomic challenges, its focus on operational efficiency and strategic investments positions it for sustainable growth in the coming year.
Explore the complete 8-K earnings release (here) from PVH Corp for further details.
