PVH (PVH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue decreased 5% year-over-year to $2.255 billion, outperforming guidance for a 6–7% decline, mainly due to the Heritage Brands intimates divestiture and planned reductions in Europe.

• Gross margin improved to 58.4% in Q3 2024, up 170 basis points year-over-year, driven by lower product costs, favorable channel mix, and reduced lower-margin wholesale sales.

• EPS exceeded expectations on both GAAP ($2.34) and non-GAAP ($3.03) bases, with net income at $131.9 million for Q3 2024.

• Strong consumer engagement and improved sell-throughs for Calvin Klein and Tommy Hilfiger drove results, with North America maintaining profitability, Europe improving wholesale orders, and Asia Pacific delivering growth.

• The company completed the sale of its women's intimates business and launched a multi-year cost-saving initiative expected to yield $200–$300 million in annual savings by 2026.

Financial highlights

• Q3 2024 net sales: $2.255 billion (down 5% year-over-year); nine-month net sales: $6.281 billion (down 7% year-over-year).

• Q3 2024 gross profit: $1.317 billion (58.4% margin); nine-month gross profit: $3.761 billion (59.9% margin).

• Q3 2024 net income: $131.9 million; nine-month net income: $441.3 million.

• Non-GAAP EBIT for Q3 was $236 million (down from $249 million prior year); GAAP EBIT was $183 million (down from $230 million prior year).

• Inventory up 9% year-over-year due to lean levels last year and early receipts for the holiday season.

Outlook and guidance

• Full-year 2024 revenue expected to decrease 6–7%, reaffirmed, including a 2% impact from the Heritage Brands sale and 1% from the absence of a 53rd week.

• Full-year gross margin expected to increase by 120 basis points versus 2023, despite a projected 200 basis point decline in Q4.

• GAAP EPS guidance lowered to $10.55–$10.70; non-GAAP EPS $11.55–$11.70, both including a $0.10–$0.15 negative FX impact.

• Q4 2024 revenue projected to decline 6–7% year-over-year; GAAP EPS $2.83–$2.98, non-GAAP EPS $3.05–$3.20.

• Full-year share repurchases expected to total approximately $400 million.