PVH Corp Q2 Earnings Beat, Stock Gains on Raised FY25 Revenue View

PVH Corporation PVH reported better-than-expected results in the second quarter of fiscal 2025, wherein both revenues and earnings topped the Zacks Consensus Estimate. However, the bottom line fell year over year, while the top line increased.

Although the company reaffirmed its fiscal 2025 outlook for earnings per share, it raised the revenue forecast slightly to the low-single digit versus the prior stated flat to slightly up view. Consequently, PVH shares have gained 5.2% in after-hours trading yesterday. 

PVH Corp continues to lean into the global consumer love for its Calvin Klein and Tommy Hilfiger, delivering strong results through stepped-up actions in product, marketing and marketplace execution. With its PVH+ Plan, the company is navigating a volatile consumer and macroeconomic backdrop but has reaffirmed confidence in its long-term brand-building strategy.

Moving forward, PVH is focused on accelerating efforts to scale innovation in its core product categories, expand globally relevant cut-through marketing campaigns, and drive next-level execution across key markets. These initiatives are expected to strengthen the brands in the back half of 2025 and support the company’s multi-year Growth Driver 5 plan to deliver cost savings and operational efficiencies.

Delving Deeper Into PVH’s Q2 Performance

PVH Corp reported adjusted earnings of $2.52 per share, down 16.3% from the year-ago quarter's $3.01. The bottom line surpassed the Zacks Consensus Estimate of earnings of $1.97 per share and the company’s guidance of $1.85-$2.00.

Revenues jumped 4% year over year (up 1% at constant currency) to $2.17 billion and beat the consensus mark of $2.10 billion. Management guided quarterly revenues to increase in a low-single digit, and flat to increase slightly on a constant-currency basis.

Direct-to-consumer revenues increased 4% from the prior-year period (flat on a constant-currency basis). Revenues in PVH Corp’s owned and operated physical stores rose 4% year over year (flat on a constant-currency basis), as growth in EMEA was offset by declines in the Americas and APAC due to a tough consumer environment. The digital commerce unit of the owned and operated stores increased 3% year over year (flat on a constant-currency basis), backed by growth in the Americas and APAC, partly offset by a decline in EMEA.

Wholesale revenues climbed 6% from the prior-year period (up 2% on a constant-currency basis), buoyed by growth in the Americas, partially offset by decreases in EMEA.

PVH Corp’s Costs & Margin Details

The company’s gross profit of $1.25 billion was nearly flat with the prior-year period. The gross margin contracted 240 basis points to 57.7% due to the adverse shift in the channel mix, elevated promotional environment, the transition of earlier-licensed women’s product categories to an in-house wholesale business, higher freight costs, increased tariffs and additional discounts to customers to offset Calvin Klein product delivery delays.

Adjusted selling, general and administrative expenses were $1.08 billion, up 1.5% year over year. The company’s adjusted earnings before interest and taxes totaled $178.2 million, down 5.8% from the prior-year quarter.

PVH’s Segmental Analysis

EMEA revenues increased 3% year over year to $1.05 billion (down 3% on a constant-currency basis), as growth in the direct-to-consumer business was more than offset by a decline in wholesale due to a shift in the timing of shipments from the fiscal second quarter into the first quarter of this year. The consensus estimate for EMEA revenues was pegged at $1.02 billion.

Americas revenues climbed 11% year over year to $684 million, driven by growth in the wholesale business, while direct-to-consumer was flat. Higher wholesale revenues reflected the transition of previously licensed women’s product categories in house and the impacts of a shift in the timing of wholesale shipments from the second half into the first half of 2025. The consensus estimate for Americas revenues was pegged at $657.7 million.

APAC revenues decreased 1% year over year to $335.2 million (down 3% on a constant-currency basis), led by a decline in the wholesale business. Direct-to-consumer revenues were flat at constant currency despite the challenging consumer environment in the region, particularly in China. The consensus estimate for APAC revenues was pegged at $321.2 million.

Licensing revenues fell 3% year over year due to the transition of some previously licensed women’s product categories in house.

PVH Corp’s Brand Performance

Revenues for the Calvin Klein segment increased 5% year over year (up 3% on a constant-currency basis).

Revenues for the Tommy Hilfiger brand rose 4% year over year (flat on a constant-currency basis).

The Heritage Brands segment’s revenues grew 1.4% year over year.

PVH Stock Past 3-Month Performance

Closer Look at PVH's Financial Performance

PVH Corp ended the fiscal second quarter with cash and cash equivalents of $249 million, long-term debt of $2.26 billion, and stockholders’ equity of $4.87 billion. Inventories were up 13% year over year, reflecting investments in core product availability, preparation for projected fiscal third-quarter sales growth, and the impacts of tariffs.

The company did not make any repurchases in the second quarter of 2025. It currently does not expect to make additional payments for the remainder of the year. The number of shares repurchased for fiscal 2025 will be subject to the final settlement under the ASR agreements, expected in the third quarter.

What to Expect From PVH Corp in Q3 & FY25?

For the fiscal third quarter, revenues are projected to be flat to slightly up year over year, though slightly down on a constant-currency basis. Adjusted earnings per share are expected to be $2.35-$2.50 compared with the $3.03 earned in the year-ago quarter. This view includes unfavorable unmitigated impacts of tariffs of about 25 cents per share currently in place for goods coming into the United States, partially offset by a favorable impact of about 10 cents per share from foreign currency translation.

Interest expenses are projected to increase to $22 million from the $16 million reported in the third quarter of fiscal 2024 due to the impacts of funding the accelerated share repurchase agreements. The adjusted effective tax rate is projected to be 25%.

For fiscal 2025, the company expects reported revenues to rise slightly year over year to the low-single digits versus the prior mentioned flat to slightly up. On a constant-currency basis, revenues are expected to be flat to slightly up. PVH Corp anticipates the adjusted operating margin to be 8.5%, whereas it reported 10% in fiscal 2024.

Management envisions an adjusted EPS of $10.75-$11.00, whereas it delivered $11.74 in fiscal 2024. The EPS guidance for fiscal 2025 reflects an unfavorable impact of $1.15 per share from tariffs, partly offset by a favorable impact of about 45 cents per share from foreign-currency translation.

Interest expenses are projected to increase to $80 million from the $67 million reported in 2024 due to the impacts of funding the accelerated share repurchase agreements. The adjusted effective tax rate is projected to be 22%.

This Zacks Rank #3 (Hold) company’s stock has lost 4.8% in the past three months as compared with the industry's 15.5% drop.

Key Consumer Discretionary Picks

We have highlighted three better-ranked stocks, namely, Ralph Lauren RL, Hanesbrands Inc. HBI and Revolve Group, Inc. RVLV. 
 
Ralph Lauren, a designer and distributor of premium lifestyle products, including apparel, accessories and footwear, currently flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.  
 
Ralph Lauren has a trailing four-quarter earnings surprise of 8.5%, on average. The Zacks Consensus Estimate for RL’s current sales and earnings indicates growth of 6% and 19.8%, respectively, from the year-ago period’s reported figures. 
 
Hanesbrands engages in the design, manufacture, sourcing and sale of apparel essentials. IT currently carries a Zacks Rank of 2 (Buy). HBI has a trailing four-quarter earnings surprise of 56.1%, on average.  
 
The consensus estimate for Hanesbrands’ current financial-year earnings indicates a surge of 65% from the year-ago reported figure. 
 
Revolve Group is an e-commerce fashion company. It markets and sells men's and women's designer apparel, shoes and accessories. Revolve Group has a Zacks Rank of 2 at present. RVLV has a trailing four-quarter earnings surprise of 48.8%, on average.
 
The Zacks Consensus Estimate for RVLV’s current financial-year sales indicates growth of 6.8% from the year-ago reported figure.

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