PVH(PVH) - 2026 Q1 - Quarterly Report

Revenue Performance - Total revenue for 2024 was $8.7 billion, with over 70% generated outside the United States, and TOMMY HILFIGER and Calvin Klein brands together accounted for over 95% of revenue [144]. - In the first quarter of 2025, revenue was$ 1.984 billion, a 2% increase from $1.952 billion in the same period of 2024 [162]. - Approximately 6% of revenue and 20% of income before interest and taxes were generated in China in 2024, with ongoing investigations by China's Ministry of Commerce posing potential risks [146]. - EMEA revenue increased by$ 45 million, or 5%, driven by growth in wholesale and direct-to-consumer businesses [164]. - Americas revenue increased by $39 million, or 7%, with a negative impact of$ 5 million, or 1%, from foreign currency translation [164]. - APAC revenue decreased by $51 million, or 13%, primarily due to a challenging consumer environment and a decline related to the Lunar New Year shopping period [164]. Financial Charges and Expenses - The company recorded pre-tax noncash goodwill and other intangible impairment charges of$ 480 million in Q1 2025 due to increased discount rates [154]. - Selling, general and administrative expenses in Q1 2025 were $1.024 billion, representing 51.6% of revenue, a slight decrease from 52.1% in Q1 2024 [162]. - The effective tax rate for Q1 2025 was 87.2%, compared to 19.2% in Q1 2024, reflecting significant losses [162]. - Gross profit for Q1 2025 was$ 1.162 billion, or 58.6% of total revenue, down from $1.199 billion, or 61.4% in Q1 2024 [168]. - The company expects a gross margin decrease of approximately 250 basis points for the full year 2025 compared to 2024 [169]. - Noncash impairment charges of$ 480 million were recorded in Q1 2025, including $426 million related to goodwill [173]. Cash Flow and Capital Management - Cash and cash equivalents decreased by$ 557 million to $191 million as of May 4, 2025, primarily due to stock repurchase activities [186]. - Cash used by operating activities was$ 71 million in Q1 2025, relatively flat compared to $67 million in Q1 2024 [189]. - Capital expenditures in Q1 2025 were$ 27 million, down from $39 million in Q1 2024, with a projected total of approximately$ 200 million for the full year 2025 [194]. - Cash dividends paid on common stock totaled $2 million in both Q1 2025 and Q1 2024, with a projected total of approximately$ 8 million for 2025 [195]. - The company completed the sale of women's intimates businesses for net proceeds of $156 million in Q4 2023, with an additional$ 10 million earnout received in Q1 2024 [192]. - The company repurchased $500 million of common stock under an ASR agreement, receiving approximately 4.6 million shares at a price of$ 76.43 per share [197]. Debt and Financing - As of May 4, 2025, the company had $115 million of borrowings outstanding under the commercial paper program as of May 4, 2025, with a weighted average interest rate of 5.15% [203]. - The company entered into delayed draw term loan facilities with aggregate commitments of$ 700 million, maturing in April 2026 [204]. - The company maintained compliance with all applicable financial and non-financial covenants under its financing arrangements as of May 4, 2025 [218]. - The issuer credit rating was BBB- by Standard & Poor's and Baa3 by Moody's, both with a positive outlook as of May 4, 2025 [219]. Foreign Currency Impact - The company anticipates that the translational impact of foreign currency on 2025 revenue and net income will be immaterial compared to 2024 [157]. - During the thirteen weeks ended May 4, 2025, the company recognized favorable foreign currency translation adjustments of $234 million, primarily due to a 9% weakening of the United States dollar against the euro [226]. - A 10% change in foreign currency exchange rates against the United States dollar would result in a change in the fair value of foreign currency forward contracts of approximately$ 110 million [229]. - The company designated €1.125 billion of senior notes as net investment hedges against its investments in foreign subsidiaries using the euro as their functional currency [230]. - A 10% change in the euro against the United States dollar would result in a change in the fair value of net investment hedges of approximately $180 million [231]. Pension and Benefit Costs - A 1% change in the assumed rate of return on pension plan assets would result in a change to 2025 net benefit cost of approximately$ 4 million [232]. - A 0.25% change in the assumed discount rate would result in a change to 2025 net benefit cost of approximately $16 million [232]. Strategic Initiatives - The PVH+ Plan aims to enhance the desirability of Calvin Klein and TOMMY HILFIGER, positioning PVH as a top-performing brand group in the sector [145]. - The transition of previously licensed women's product categories in-house is expected to result in a less than 1% increase in revenue and a 50 basis point decline in gross margin in 2025 [156]. - The company expects equity in net income of unconsolidated affiliates for full year 2025 to be relatively flat compared to 2024 [178].