PVH (PVH) 28 Aug 242025 Q2 Earnings call transcript

Good morning, everyone, and welcome to today's PVH Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this call may be recorded, and that I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to Sheryl Freeman. Senior Vice President of Investor Relations. Please go ahead.

Thank you, operator. welcome PVH and everyone, morning, to Corp. the Good

and Call. call Executive transmitted permission. on today Quarter This and XXXX material. be behalf otherwise the may Conference Earnings webcast Officer. consists Financial Chief Second of will PVH being of or Leading Stefan written not Coughlin, be Chief without call rebroadcast and PVH's conference is Zac copyrighted recorded Officer; It Larsson, recorded,

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our today. and Thank call you, everyone, morning, Sheryl, thank good joining for you and

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on we mid-July peak inventory bigger clearance didn't season Brands August, period compensate fully In revenue Since coming on quarter. trends into X% slightly, revenue drove in revenue saw the on expected clearance of more for reflecting we coming revenue. rates and new clearance a newness, share came the the the wholesale basis, from total which saw driven and we Our less to to we season approach, this decided less mid-July constant actions our end-of-season end-of-season quality by the declined follow June. currency we inventory, and And market August, DXC into increasingly the down. the further as constant total when back and the our for line, taking up, new heavy an gross basis down quarter, DXC from and not proactive Instead, sales up. With some our of clearance of in shift margin deliberately of where then, currency a are away X% the yet impact the early overall we being market the trends had down May to resulted were revenue clearance in we walked we as our Heritage excluding DXC sale. low-quality top see that

ahead, are onetime a guidance for EPS EPS to remain revenue, we excluding for full the deliver EBIT non-GAAP our tax year, year. reaffirming strong we growth positioned Looking margin and the well benefit and

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points starting a consecutive our second than The turn year, of double-digit to Calvin EBIT significant compared our last delivered and Now to together quarter up both margin, let Tommy our me XX.X% regional continues XXX Plan basis a despite of execution. region America, tougher great an North In another margin macro. be fourth the brands. non-GAAP expansion example a of EBIT quarter, PVH+ with across margin, quarter performance, to marking their more businesses

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quality we initiative. Turning to communicated our business. continue international on execute In to our successfully sales of Europe, previously

revenue of delivered from impact and significantly overall X% down included a gross quality our it in we our euros, actions was margins. While higher X% year-over-year sales

on business in accretive X%. David growth to for we early our expect off to the position For we next be start much level continue both in sales execution of our the all we driving Europe continue inventory season profitable revenue product last the laser-focused full long European fall term, quality and where year, impact as the is composition initiatives better channels. Tommy, across the strength to build over and approximately PVH+ year. is team the Calvin In are brand our and from than Salmon to an strong

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Pacific. Moving on to Asia

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execution PVH+ a strong current both continue backdrop, consumer difference. the With make we for to Calvin our and Tommy, big

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results My are morning. based good and on comments are release. Stefan, in Thanks, press non-GAAP reconciled and our

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normalize 'XX our points expect and the support we the was as through an and of we to plans of growth 'XX. SG&A points due As cost of than leaner drive in approximately to year, inventory work is the last to of half half basis of increase in to XXX manage reduce levels modest expenses. revenue increase approximately we levels actively higher point year deleveraging basis lower into XXX a from versus of move inventory people second compared the basis revenues, basis cost the expense expenses and remainder improvement year versus realized last offset as the for prudently XX.X%, of to The and taken due to second percent partially points planned we year lower DTC comprised from on XXX and efficiencies mix the by actions an XXX have last efficiencies.

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progress will XXXX. increasingly impactful are become making early through We that

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track on And on the the to overall start to the remain year. business year. outlook shared now at full the deliver we of moving We

our year operating we are reaffirming As and guidance. full revenue such, margin

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Instructions] [Operator

Our first question will JPMorgan. come from with Matthew Boss

margin cost elaborate of could to support over the couple you operating then, to across you the just is margin your Zac, on expansion years? brands operating seen cited would and you speak that demand you've health Europe, So and fall think current Stefan, back of could half America any And demand there on to regardless of target controllables, on that trends macro? Or planned North you if efficiencies next how great. just that in maybe I the elaborate that change the assortments mid-teens recent be relative

Matt, the and Start your brand. for the you thank of with health questions.

coming high strengthen this So and continue we into Calvin from spring with engagement in to we fall and all-time that. both consumer are Tommy,

take Calvin's So saw that you and very response strikes I thing yesterday consumers the strong White, me that don't if when one and fall consumer launched it's And chapter campaign of really already. we know Jeremy again. their things second canceled field of Allen days where them screaming of day, and stopping time the into like all comment have should we right world saying from it thousands I'm busy the be today. them, busy hundreds

fall the start spring. powerful on campaign. high engagement in from now, new growth in very all-time you'll Every the building consumer campaign the talent of So see week

Mingyu, You Greta will Jenner, see Lee. Kendall

You will coming the more and K-Pop we'll band see in. have NewJeans, talent

and across -- they social from and products Stray lifestyle and campaign, Kids I all on our campaign Tommy will fall Kids a best with Klein is band be iconic categories. keep comments released K-Pop Please its the consumers, Tommy the cut-through saying all also So like things posting. Stray just life. equal Calvin Tommy. love wearing positive

campaigns. in reminder, York with this the back show few of And both Week to a weeks, the in to Tommy comes When very are Fashion and the through we in that top mention just Tommy, Tommy came biggest when Show. to we York consumer fall XX So past back cut the February, Fashion had globally. Fashion campaigns, in response also as season New Week it New strong want start fall I a both just

fully engagement, we Tommy. that then the impact drives was where season were good interest product. Calvin consumer and to engagement in Fall product globally for feeling 'XX the about consumer product first an So the really able

to is brands. key categories So you in the able during into will fall improvements we in been both further the lean see growth have

newness in the better composition. innovation, more is the levels, that then hero better fall, off inventory product, And driven the early season fall versus it's season products. you for combine have strong will more last with inventory -- product And product having but We year. a fall still start the fall to season days

strength forward-looking forward-looking area for the product Another spring books can now the see XXXX. already for you order increased Europe in is

driven have London, fall improvement. were 'XX and selling last in time sequential up we we we caught significant this, like So spring have the we now still spring 'XX, and

So for see down digits. the sell-in. single from fall are low if 'XX, to improvement. it work spring you digit we belief recognition 'XX, our in And product the of only And down record reflects we the single were partners high the and

price fall, we assortment, coming of a influence, we clearance, into inventory tougher selling, into better in about course, we But how more the consumer can fall. better stronger very are good composition, stepping overall, and full product less So on engagement setting with what feel based macro.

those SG&A accomplished And the business we I controllable think happy is control work I Matt, over cost about of our on couple Yes. the the -- the really dollars. investing element think we've of with we're how go most last years.

forward, the X expect follow to same important pillars. Looking path with we

call suppose match what continuous current to to I you we the management. spending really of performance That's trends. take actions is First hundreds small

us importantly, all made the capacity our on greatly create year we've think, That's make really we into XXX some us and profit of well. to the XXX commitments working started world. leaned that about tougher This And change, savings, I the work talked in around points in spite the second that simplify and helped I to has continue couple will working over of are to profit really that in the to ways has to as commitment to to are backdrop. change in profitability, step hold last think SG&A growth of larger invest months us to continue as changes which to it's of the Stefan the our allows macros deliver XX% helping incremental deliver basis we've

Evercore next Our Michael with come from question Binetti ISI. will

embedded Stefan, of just clearance. in went the relative did past bit the with help resonating term DXC, XQ. more us in little to as near you this, on you connect quarter some And season maybe a of to actual that positive actual business, mention just the little America that some in guidance North moved end what's you Zac, for the bit but I better America, out consumer. indicators through North what's -- some third Maybe a know unpack little a you

I comps in think slowed North it sounded like July. America

little the a compressed was rate were seeing below quarter before average. the rate to exit business the July that the the run low? the So you or returned Has

Thank Michael. you, Yes.

there. me let So start

what out quarter. playing with start yes, the second in So unpacking we saw let's

and we inventory into and for clearance, but took we the products, were So market to we months. the May aggressive both year came in are a DXC last with than with in season across plan came that. more not on proactively less company those clearance new more price Then to be turn mid-July we clearance, follow June. decided brands with when summer focused the full for And peak more

Calvin of the what see period During up the go new Tommy And we resonating that, But on in benefit see polo transitional and of total when focus less outerwear. therefore, into clearance it having on as August, newness, growth having season, consumer. new revenue. comes July, further clearance when that example, season outerwear season denim, is drives fully the have we didn't continued and an and with new that resonating. Same more into to on less key clearance in transitional peak the the more denim, match innovation underwear, leaning the the we shirts, with is the Chinos, we more

to improvement big a fall is all start year much when versus offering the we too from way last our season we that fast summer year more last fall. are So in the of this transitional went versus

the for We've ahead years of really market over we last true consistent and or of outlook. that Thanks been get this for macros conditions, the absolutely holds Yes. couple don't that question.

the Asia experiencing. as and America, current DTC been Europe our provided recent matter that that for outlook North we trends that really we've for match and So well,

XQ outlook year. of for So the for that we that's carry true and rest true the for DTC well actually as XQ as

with come Sole question from Jay Our next UBS. will

about can you've more you feeling sales if you're talk the region the little Europe wondering just and bit initiatives. about executing quality a been Stefan, as of how

Yes. Thanks, Jay. Absolutely.

good really quality the in how are feel and executing market. we about that's resonating we how So of initiative the sales

in of less see is newness and newness how how here I more in drive referenced and in that selling order we the it the forward-looking more and the into now business how it as we see season also, We with we clearance and end the books. came So than last year.

really that. feeling good So about

In for performance flagged Europe, we high experience. prepared with remarks, CEO to are close leader relevant my addition, a I permanent a in announce highly very

market. how feeling But the execute So overall, the it good good very quality about -- about we of plays shortly. out on coming in up sales and how

will Our from with next question Drbul come Bob Guggenheim.

circle that's America. are American back how within you targets on feel wanted you market, that of Just progress the where specifically the you're you've Can North North that about you the with and to making going? you think talk profitability talked with about sort

Bob. you, Thank Absolutely.

So PVH+ be for the continues America, a it proof North great to point execution. on

EBIT at So quarter, growth if delivered the you for we XX.X% Calvin and business, at Tommy look high-quality margin. second in the an X% combined

So key continue with very products, gross it's We America by drive what But make our the basis stores, XXX on and stronger partners improving, see driven product quarter meaning newness points another presentation growth. importantly, work. And we the we most drives how inventory. business executing in SG&A brands operating wholesale to our life to and they and partnership e-commerce and out drives wholesale focus see into with to improvement of our a improvements offers the close margin an category build margin is execution where improvement. and we hero in continue come the combination them partners, that marketplace we North product with improved PVH+,

America, very just job. keep there teams to it we in So but kudos at good North our a doing

example America of Bob, PVH+ think, as amazing Plan North I the I is of financial the then power well. And think an

that improved our I now it for that points And North environment. period I both basis improvement improvement, hundreds X time a operating would of think quarters. worth in think we for it's what's basis points all low-growth of hundreds gross from and comes ourselves as margin of over exciting describe of I of of in that sort margin has that external straight America points think by is hundreds basis us SG&A a reminding backdrop

And Stefan so that financial main apply there. I out the great said, of benefit example as as that from pillars think well I as Plan we think the a PVH+ it's comes

Ike Our Wells next question will come Fargo. Boruchow with from

bit to you has because that Ike. I This G-III don't was for is if can wondering it if as on [indiscernible] a talk agreement. your know, more know scaling little update G-III you any I there's been licensing down.

a of sense much you how are on able to recapture yet? So that going to give you're

Yes.

So thanks, Ike.

and sportswear continue coming in the on according multiyear our first to to Klein engine, multiyear wholesale deliver over we good to the our and 'XX. take back our we to out sourcing path have to be partnerships with business a accounts, key plan, good spring product period. Really a So engine start now Calvin build

of America. Our next come Nardone with question Bank Chris will from

guidance. embedded that versus us implied PVH North region peer quick follow-up through promotions pulled Zac, both in you by the that walk in your margins. And your I XQ the then the in sales set? you business. total promos just compared was July into improvement the as tie to increased drivers for embedded margin America full just a on your year in Can back you to Can contributing that sequential guidance wondering for your and XQ are from comments operating

outlook In Europe, see also proof we holding. Let tougher start the be PVH+ as we see with -- deliver North a you and now, from execution If initiatives see continue point regionally improvements saw our to biggest forward-looking change. an a me at backdrop. this see just we we of quarter look the And business We see the backdrop consumer where overall perspective, to books. the continued tougher it in Asia, within perspective. order of business an we on saw from and in quality the great sales trajectory -- wholesale America a we of

focused moments. the on strong continue consumer engagement to big continue consumer to winning drive and very We we be

Yes. Thanks, Chris.

about we think to through them XQ explain. our maybe in really I'll go pieces good I plans, feel and

here that America over the Asia revenue, XQ about For outlook North talked both our so hour DTC in we've trends through of actually same the the or assumes carry and last Pacific.

around that current stay So always featuring bit planned off a as we strategy of true no of conditions. timing. to wholesale really There's little noise improvements of

a you more Where XQ year, last is of some is we promotional here. any changes in the some as XQ talked other so modestly in do that down in the consistent our to And bit of we that really have than, we've reflective quarter see very of said, out macros gross sort comes more about as think margin, little that. On to very tougher environment numerical -- SG&A. changes outlook well playing consistent we playing

XQ, DTC tougher So the we of towards turn in managing once backdrop the P&L. saw rest really the getting we

in implement. more but some to resulted that's really that of identified. bit we've take And little So We'll time in a XQ of incremental some as XQ. efficiencies -- SG&A in those some see that

comes we work So say would really I in around similar, being and XQ, pretty XQ SG&A revenue a that we've general, see perspective, identified. ideas those to it and already from down margin and gross

will question Kernan come from next with TD Cowen. Our John

think about $X you Zac, targets, wholesale think DTC the on into now do that split around and wholesale plans basis, about the billion when DTC your long-term how business split? term long does managing The a how reported we the play wholesale business that? for

set out just overall back So do let to me start, by we connecting giving you the overall. John, have what to

with systematic out approach Tommy iconic we through brands have through we and beloved Tommy full feel most with the our them, how the roach PVH+, a to them Calvin of globally shops. and and about together the connection consumer we're their the wholesale build their the and because profitable DXC the we good we feel take From consumer going to DXC split, potential. good increasingly build So set grow and partners to full business on follow wholesale highest we work the potential. X into closely Calvin, in the there we really both how level. And very we have to between about that's

Zac, to from want that's you if know perspective. And So overall don't I an add.

the as time over mix is I think of that independent channel XX% commitment it's our EBIT to important to No, make margin goes.

them the that marketplace that think in as build what the Stefan I go. And successful to. us. route outcomes most been delivers channels been of to when, mean couple for just years, does over as continue. improvements we've push make to of to for as spite in the channels there's a across profitability us an think we the omnichannel we're I And do across that doing to need the they of sign we've And forward our financially last choosing levels is whatever is financial I progress across continue that to able best that in we think channel profitable. satisfy of consumer the think, and that, channels movement a that said, seen of good I would we is successful to expect our we on of amount That go all ultimately they're

the on to of would quick about perspective model transferring think reported Maybe a just Ike's from in transition. be revenues question that next XX licenses G-III follow-up it. financial being coming a Got the terms over prior Is anything to material months there that in from royalty we should and revenues.

a over but No. out as licenses to laid mean we the able phased I that the return most you change. to what's is there manage as period about adapt perspective build to Stefan But P&L some composition the plan of impact be as P&L you behind important said also talked gives back, out to That have us the the time earlier, there. there'll end, to long be the in at capabilities time. period full

be in change of that because factor. particular anything So to we significant wouldn't expect calling that across

We have time come for from X Sachs. with more Brooke question will Roach that Goldman

on for thoughts promotional Are on color marketing promotions cut can your invest brand size into a in product increased for versus PVH customer? assortment elaborate seeing Zac, sensitivity And on little full the price your through give share can strategy. price broader Perhaps the Stefan, expectations backdrop? you you and campaigns of back latest half. any could embedding hoping as you're you that the you selling. I'm of headwind of seeing guidance in signs macro what your specific you your in the you're pricing

Thank you, Brooke.

promotions to consumer and about well our best pricing, are Going Tommy biggest a into perspective positioned relative your really to competitors. and from question pricing the and Calvin both

tying discount back with rate in opportunity leaning we of to biggest we inventory much pricing start planning, very AUR were upfront. react historically the closer to terms -- we into from to a how planning how how replenish, assortment versus the demand, decreasing very much build So improving buying is the when we in have key growth categories, we demand closing the into buys,

it's So products, hero strengthening with in inventory newness, combination the key categories, the outgoing We of for between through better opportunities and that right the there. innovation transition growth the still we and see level composition assortment have the seasonal product the better the newness.

And supply there the build-out we AUC. it's see in demand were already connecting better the composition, So chain. of less that lower improvements inventory, data-driven to and

consumer more relative way great the relevance So the to the offering for it all consumer's -- perspective and on product that, but to product value back in a the competition. and tying

it. So I feel very good about

that the And a moving I bit. think from the is market around quantification

think looking what not looking quantify to magnitude a that of the picks up We increase we're I fully said for. which so And general impact. modest we're

important think good us is our shape. what's I for in is inventory

going works And we're be with able it it the to to when for and more worry so that, And make when our pressure. having to doesn't, versus combined when of inventory be us choices consumers about promotional. on to

half well So of think the that as the year. feel we I second we're positioned head into we

All right.

thank following that, with you want we saying close the along just by journey. on for to So

focused a now deliver in come from. Calvin stay journey and now that's of everything of vision, sure longer-term executing business multiyear here It's value the stay their laser on the independently real we do we to connects where and potential. making are tougher, now that We will full is creation Tommy the macro and and where into building getting to

you very thank and much forward to shortly. So connect looking

Second you. PVH Conference conclude Earnings This does Thank Quarter Call. XXXX today's

have time, wonderful may and this disconnect at day. a You