PVH (PVH) Q1 2025 earnings summary

Executive summary

• Q1 revenue was $1.95 billion, down 10% year-over-year, mainly due to the Heritage Brands intimates divestiture and European wholesale declines, but results exceeded guidance with double-digit EPS growth and record gross margin, driven by disciplined execution and DTC strength.

• Net income increased to $151 million from $136 million in Q1 2023, with GAAP EPS at $2.59 and non-GAAP EPS at $2.45, both surpassing guidance.

• Gross margin expanded 350 basis points to 61.4%, benefiting from favorable channel mix, lower product costs, and higher DTC sales.

• Inventory was reduced by 22% year-over-year, supporting future plans and proactive management.

• $200 million was returned to shareholders via repurchase of 1.8 million shares; $400 million in buybacks planned for the year.

Financial highlights

• Q1 revenue declined 10% year-over-year, including a 3% impact from the Heritage Brands sale and 1% from currency translation.

• Gross margin reached a record 61.4%, up 350 basis points; SG&A as a percent of revenue was 52.1%, up 280 basis points.

• EBIT for the quarter was $195 million non-GAAP, nearly flat versus prior year, as gross margin gains offset revenue decline.

• Diluted EPS was $2.59 (GAAP) and $2.45 (non-GAAP), up from $2.14 last year, exceeding guidance.

• Inventory at quarter end was down 22% year-over-year; cash and cash equivalents were $376 million.

Outlook and guidance

• Full-year revenue projected to decrease 6%-7% year-over-year, mainly due to European wholesale softness, Heritage Brands sale, and absence of a 53rd week.

• Full-year gross margin rate expected to increase ~200 basis points to an all-time high; operating margin projected flat to 2023 at approximately 10.1%.

• Non-GAAP EPS guidance raised to $11-$11.25, up from $10.75-$11; GAAP EPS guidance raised to $11.15–$11.40.

• Effective tax rate for 2024 anticipated at approximately 20%.

• Common stock repurchases for 2024 expected to total about $400 million; capital expenditures projected at $275 million.