- Second quarter
- Revenue: Decreased 6% to $2.074 billion compared to the prior
year period (decreased 5% on a constant currency basis), in line
with guidance of a decrease of 6% to 7% (decrease of 5% to 6% on a
constant currency basis)
- EPS:
- GAAP basis: $2.80 exceeded guidance of approximately $2.25
- Non-GAAP basis: $3.01 exceeded guidance of approximately $2.25
(there were no non-GAAP exclusions in the guidance)
- Included a tax benefit of approximately $0.55 per share related
to the favorable settlement of a multi-year audit in an
international jurisdiction, the results of which were not known at
the time of guidance
- Full year outlook
- Revenue: Reaffirms projected decrease of 6% to 7% (decrease 6%
to 7% on a constant currency basis)
- Operating margin:
- GAAP basis: Projected to be approximately 9.8% compared to
approximately 10.1% previously, which includes restructuring
charges now expected to be incurred in 2024
- Non-GAAP basis: Reaffirms outlook of approximately flat
compared to 10.1% in 2023
- EPS:
- GAAP basis: Raising to a range of $11.20 to $11.45 compared to
$11.15 to $11.40 previously
- Non-GAAP basis: Raising to a range of $11.55 to $11.80 compared
to $11.00 to $11.25 previously due to the tax benefit resulting
from the favorable settlement of the multi-year audit discussed
above
PVH Corp. [NYSE: PVH] today reported its 2024 second quarter
results and updated its full year EPS outlook.
Stefan Larsson, Chief Executive Officer, commented, “We
delivered on our top- and bottom-line commitments and beat our
earnings guidance for the second quarter, led by our disciplined
execution of the PVH+ Plan. For both Calvin Klein and Tommy
Hilfiger, we drove strong consumer engagement and continued to
increase product strength and improve newness in our assortment,
leading to more full-priced selling and less end-of-season
clearance sales, which fueled significant gross margin
expansion.”
Larsson continued, “Step by step, we continue to build strength
in product, consumer engagement and marketplace execution,
supported by the build out of our data and demand-driven supply
chain. North America continues to be a strong proof point, in
Europe we are on plan with our targeted quality of sales
initiatives, and in Asia Pacific, we continue to drive strong brand
engagement to win the big consumer moments. Looking ahead, as we
navigate an increasingly challenging global macroeconomic backdrop,
we remain relentlessly focused on delivering brand-accretive,
long-term growth.”
Zac Coughlin, Chief Financial Officer, said, “We drove strong
gross margin and operating margin expansion in the second quarter
and are reaffirming our revenue and non-GAAP operating margin
guidance, reflecting our disciplined execution of the PVH+ Plan. We
remain relentlessly focused on driving efficiencies, maintaining
cost discipline and simplifying how we work globally. Powered by
our two iconic brands, we have a multi-year unlock opportunity to
generate sustainable, profitable growth and strong cash flows,
while maximizing returns for shareholders over the long-term.”
Non-GAAP Amounts:
Amounts stated to be on a non-GAAP basis exclude the items that
are defined or described in greater detail near the end of this
release under the heading “Non-GAAP Exclusions.” Amounts stated on
a constant currency basis also are deemed to be on a non-GAAP
basis. Reconciliations of amounts on a GAAP basis to amounts on a
non-GAAP basis are presented after the Non-GAAP Exclusions section
and identify and quantify all excluded items.
Second Quarter Review:
- Revenue decreased 6% compared to the prior year period
(decreased 5% on a constant currency basis), including a 3% decline
resulting from the sale of the Heritage Brands women’s intimates
business in November 2023. Overall revenue in the Company’s
international businesses decreased 4% compared to the prior year
period (decreased 3% on a constant currency basis), primarily due
to the challenging consumer environment in Asia Pacific,
particularly in China and Australia, and the continuation of the
Company’s planned strategic reduction in sales in Europe to drive
overall higher quality of sales in the region. In North America,
revenue in the Tommy Hilfiger and Calvin Klein businesses combined
increased 1% compared to the prior year period, with modest growth
in the wholesale business and a low single-digit decline in the
direct-to-consumer business.
- Direct-to-consumer revenue decreased 5% compared to the
prior year period (decreased 3% on a constant currency basis).
Revenue in the Company’s owned and operated stores decreased 4%
compared to the prior year period (decreased 3% on a constant
currency basis), primarily driven by recent softness in the
consumer backdrop. Revenue in the Company’s owned and operated
digital commerce business declined 6% compared to the prior year
period (declined 5% on a constant currency basis), primarily due to
the continuation of the Company’s planned strategic reduction in
Europe.
- Wholesale revenue decreased 9% compared to the prior
year period (decreased 8% on a constant currency basis), primarily
due to a 7% reduction resulting from the sale of the Heritage
Brands women's intimates business. The remaining decline reflects
the continued strategic reduction in revenue in Europe to drive
overall higher quality of sales in the region.
- Gross margin increased 250 basis points to 60.1%
compared to 57.6% in the prior year period. The significant
increase reflects benefits from a favorable shift in channel mix, a
reduction in sales to lower margin wholesale accounts, and lower
product costs.
- Inventory decreased 12% compared to the prior year
period.
Second Quarter Consolidated Results:
- Revenue of $2.074 billion decreased 6% compared to
$2.207 billion in the prior year period (decreased 5% on a constant
currency basis), including a 3% decline resulting from the sale of
the Heritage Brands women’s intimates business.
- Tommy Hilfiger revenue decreased 4% compared to the
prior year period (decreased 3% on a constant currency basis).
- Tommy Hilfiger International revenue decreased 6%
(decreased 5% on a constant currency basis) as the revenue decline
in Europe discussed above weighs more heavily on the Tommy Hilfiger
business.
- Tommy Hilfiger North America revenue increased 1%.
- Calvin Klein revenue decreased 1% compared to the prior
year period (flat on a constant currency basis).
- Calvin Klein International revenue decreased 2% (flat on
a constant currency basis).
- Calvin Klein North America revenue increased 1%.
- Heritage Brands revenue decreased 60% compared to the
prior year period, which included a 56% decrease resulting from the
sale of the Heritage Brands women's intimates business.
- Earnings before interest and taxes (“EBIT”) on a GAAP
basis was $174 million, inclusive of a $4 million negative impact
attributable to foreign currency translation, compared to $143
million in the prior year period. EBIT on a GAAP basis included
costs of $15 million in the current quarter and costs of $39
million in the prior year period described under the heading
“Non-GAAP Exclusions” later in this release. EBIT on a non-GAAP
basis for these periods excludes these amounts. EBIT on a non-GAAP
basis was $189 million, inclusive of a $4 million negative impact
attributable to foreign currency translation, compared to $182
million in the prior year period. The gross margin improvement
discussed above more than offset the impact of the revenue decline
in the quarter. The Company continues to take a disciplined
approach to managing expenses, driving cost efficiencies while
making targeted investments to drive its strategic
initiatives.
- Earnings per share (“EPS”)
- GAAP basis: $2.80 compared to $1.50 in the prior year
period.
- Non-GAAP basis: $3.01 compared to $1.98 in the prior
year period.
EPS on both a GAAP and a non-GAAP basis for
the second quarter of 2024 includes the negative impact of $0.07
per share related to foreign currency translation.
EPS on a GAAP basis for these periods also
included the amounts for the applicable period described under the
heading “Non-GAAP Exclusions” later in this release. EPS on a
non-GAAP basis for these periods excluded these amounts.
- Interest expense decreased to $19 million from $24
million in the prior year period.
- Effective tax rate was (2.1)% on a GAAP basis as
compared to 21.3% in the prior year period. The effective tax rate
was (0.1)% on a non-GAAP basis as compared to 21.6% in the prior
year period. The decline in the tax rates on a GAAP and non-GAAP
basis compared to the prior year period is primarily due to a tax
benefit in the current quarter related to the favorable settlement
of a multi-year audit in an international jurisdiction.
Stock Repurchase Program:
Delivering on its commitment under the PVH+ Plan to return
excess cash to stockholders, the Company repurchased 200,000 shares
of its common stock for $25 million during the second quarter of
2024, bringing total share repurchases for the first six months of
2024 to 2.1 million shares for $225 million. The Company currently
expects to make common stock repurchases under the stock repurchase
program of approximately $400 million for the full year 2024.
2024 Outlook:
Full Year 2024 Guidance
- Revenue: Reaffirming projected decrease of 6% to 7% as
compared to 2023 (decrease 6% to 7% on a constant currency basis),
inclusive of a 2% reduction resulting from the sale of the Heritage
Brands women’s intimates business and a 1% reduction from the 53rd
week in 2023.
- Operating margin
- GAAP basis: Projected to be approximately 9.8% compared
to 10.1% in 2023. Previous guidance was approximately flat to
2023.
- Non-GAAP basis: Reaffirming outlook of approximately
flat compared to 10.1% in 2023.
Operating margin on a GAAP basis for these
periods include the amounts described under the heading “Non-GAAP
Exclusions” later in this release. Operating margin on a non-GAAP
basis exclude these amounts.
- EPS
- GAAP basis: Projected to be in a range of $11.20 to
$11.45 compared to $10.76 in 2023. Previous guidance was a range of
$11.15 to $11.40.
- Non-GAAP basis: Projected to be in a range of $11.55 to
$11.80 compared to $10.68 in 2023. Previous guidance was a range of
$11.00 to $11.25.
The 2024 EPS projections include the
estimated negative impact of approximately $0.05 per share related
to foreign currency translation.
EPS on a GAAP basis for these periods also
include the amounts described under the heading “Non-GAAP
Exclusions” later in this release. EPS on a non-GAAP basis exclude
these amounts.
- Interest expense is projected to decrease to
approximately $70 million as compared to $88 million in 2023,
primarily due to the repayment in 2023 of the $100 million 7 3/4%
debentures and an increase in interest income. Previous guidance
was approximately $75 million.
- Effective tax rate is projected to be approximately 16%,
with the decrease from previous guidance of approximately 20%
primarily attributable to the tax benefit resulting from the
favorable settlement of the multi-year audit in an international
jurisdiction.
Third Quarter 2024 Guidance
- Revenue is projected to decrease 6% to 7% as compared to
the third quarter of 2023 (decrease 7% to 8% on a constant currency
basis), inclusive of a reduction of 2% resulting from the sale of
the Heritage Brands women's intimates business.
- EPS
- GAAP basis: Approximately $2.30 compared to $2.66 in the
prior year period.
- Non-GAAP basis: Approximately $2.50 compared to $2.90 in
the prior year period.
The third quarter EPS projections include the
estimated positive impact of approximately $0.05 per share related
to foreign currency translation.
EPS on a GAAP basis for these periods also
include the amounts described under the heading “Non-GAAP
Exclusions” later in this release. EPS on a non-GAAP basis exclude
these amounts.
- Interest expense is projected to decrease to
approximately $17 million compared to $22 million in the third
quarter of 2023.
- Effective tax rate is projected to be approximately
23%.
Please see the section entitled “Full Year and Quarterly
Reconciliations of GAAP to Non-GAAP Amounts” at the end of this
release for further detail and reconciliations of GAAP to non-GAAP
amounts discussed in this section.
Non-GAAP Exclusions:
The discussions in this release that refer to non-GAAP amounts
exclude the following:
- Pre-tax restructuring costs totaling approximately $35 million
incurred and expected to be incurred in 2024 consisting principally
of severance related to the Company’s multi-year initiative to
simplify its operating model by centralizing processes and
improving systems and automation to drive more efficient,
cost-effective ways of working across the organization, of which
$15 million was incurred in the second quarter, approximately $15
million is expected to be incurred in the third quarter, and
approximately $5 million is expected to be incurred in the fourth
quarter.
- Pre-tax gain of $10 million recorded in the first quarter of
2024 in connection with the Company’s sale of the Heritage Brands
women’s intimates business.
- Pre-tax gain of $46 million recorded in the fourth quarter of
2023 related to the recognized actuarial gain on retirement
plans.
- Pre-tax net gain of $13 million recorded in the fourth quarter
of 2023 in connection with the sale of the Company’s Heritage
Brands women's intimates business, which includes a gain on the
sale, less costs to sell, and severance and other termination
benefits associated with the transaction.
- Pre-tax restructuring costs of $61 million incurred in 2023
consisting principally of severance related to actions taken in the
second and third quarters of 2023 under the plans initially
announced in August 2022 to reduce people costs in the Company’s
global offices by approximately 10% by the end of 2023, of which
$39 million was incurred in the second quarter, $19 million was
incurred in the third quarter and $4 million was incurred in the
fourth quarter.
- Estimated tax effects associated with the above pre-tax items,
which are based on the Company’s assessment of deductibility. In
making this assessment, the Company evaluated each item that it had
identified above as a non-GAAP exclusion to determine if such item
was (i) taxable or tax deductible, in which case the tax effect was
taken at the applicable income tax rate in the local jurisdiction,
or (ii) non-taxable or non-deductible, in which case the Company
assumed no tax effect.
The Company presents constant currency revenue information,
which is a non-GAAP financial measure, because it is a global
company that transacts business in multiple currencies and reports
financial information in U.S. dollars. Foreign currency exchange
rate fluctuations affect the amounts reported by the Company in
U.S. dollars with respect to its foreign revenues and can have a
significant impact on the Company’s reported revenues. The Company
calculates constant currency revenue information by translating its
foreign revenues for the relevant period into U.S. dollars at the
average exchange rates in effect during the comparable prior year
period (rather than at the actual exchange rates in effect during
the relevant period).
The Company presents non-GAAP financial measures, including
constant currency revenue information, as a supplement to its GAAP
results. The Company believes presenting non-GAAP financial
measures provides useful information to investors, as it provides
information to assess how its businesses performed excluding the
effects of non-recurring and non-operational amounts and the
effects of changes in foreign currency exchange rates, as
applicable, and (i) facilitates comparing the results being
reported against past and future results by eliminating amounts
that it believes are not comparable between periods and (ii)
assists investors in evaluating the effectiveness of the Company’s
operations and underlying business trends in a manner that is
consistent with management’s evaluation of business performance.
The Company believes that investors often look at ongoing
operations of an enterprise as a measure of assessing performance.
The Company uses its results excluding these amounts to evaluate
its operating performance and to discuss its business with
investment institutions, the Company’s Board of Directors and
others. The Company’s results excluding non-recurring and
non-operational amounts are also the basis for certain incentive
compensation calculations. Non-GAAP financial measures should be
viewed in addition to, and not in lieu of or as superior to, the
Company’s operating performance calculated in accordance with GAAP.
The non-GAAP financial measures presented may not be comparable to
similarly described measures reported by other companies.
Please see tables 1 through 5 and the sections entitled
“Reconciliations of Constant Currency Revenue” and “Full Year and
Quarterly Reconciliations of GAAP to Non-GAAP Amounts” later in
this release for reconciliations of GAAP to non-GAAP amounts.
Conference Call Information:
The Company will host a conference call to discuss its second
quarter earnings release on Wednesday, August 28 at 9:00 a.m.
EDT. Please log on to the Company’s website at
www.PVH.com and go to the Events page in the Investors
section to listen to the live webcast of the conference call. The
webcast will be available for replay for one year after it is held.
Please log on to www.PVH.com as described above to listen to the
replay. The conference call and webcast consist of copyrighted
material. They may not be re-recorded, reproduced, re-transmitted,
rebroadcast or otherwise used without the Company’s express written
permission. Your participation represents your consent to these
terms and conditions, which are governed by New York law.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: Forward-looking statements in this press
release and made during the conference call/webcast, including,
without limitation, statements relating to the Company’s future
revenue, earnings, plans, strategies, objectives, expectations and
intentions are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are
cautioned that such forward-looking statements are inherently
subject to risks and uncertainties, many of which cannot be
predicted with accuracy, and some of which might not be
anticipated, including, without limitation, (i) the Company’s
plans, strategies, objectives, expectations and intentions are
subject to change at any time at the discretion of the Company;
(ii) the Company’s ability to realize anticipated benefits and
savings from divestitures, restructurings and similar plans, such
as the headcount cost reduction initiative announced in August
2022, the 2021 sale of assets of, and exit from, its Heritage
Brands menswear and retail businesses, and the November 2023 sale
of the Heritage Brands women’s intimate apparel business to focus
on its Calvin Klein and Tommy Hilfiger businesses; (iii) the
ability to realize the intended benefits from the acquisition of
licensees or the reversion of licensed rights (such as the
announced, in-process plan to bring in-house most of the product
categories that are or had been licensed to G-III Apparel Group,
Ltd. upon the expirations over time of the underlying license
agreements) and avoid any disruptions in the businesses during the
transition from operation by the licensee to the direct operation
by us; (iv) the Company has significant levels of outstanding debt
and borrowing capacity and uses a significant portion of its cash
flows to service its indebtedness, as a result of which the Company
might not have sufficient funds to operate its businesses in the
manner it intends or has operated in the past; (v) the levels of
sales of the Company’s apparel, footwear and related products, both
to its wholesale customers and in its retail stores and its
directly operated digital commerce sites, the levels of sales of
the Company’s licensees at wholesale and retail, and the extent of
discounts and promotional pricing in which the Company and its
licensees and other business partners are required to engage, all
of which can be affected by weather conditions, changes in the
economy (including inflationary pressures like those currently
being experienced globally), fuel prices, reductions in travel,
fashion trends, consolidations, repositionings and bankruptcies in
the retail industries, consumer sentiment and other factors; (vi)
the Company’s ability to manage its growth and inventory; (vii)
quota restrictions, the imposition of safeguard controls and the
imposition of new or increased duties or tariffs on goods from the
countries where the Company or its licensees produce goods under
its trademarks, any of which, among other things, could limit the
ability to produce products in cost-effective countries, or in
countries that have the labor and technical expertise needed, or
require the Company to absorb costs or try to pass costs onto
consumers, which could materially impact the Company’s revenue and
profitability; (viii) the availability and cost of raw materials;
(ix) the Company’s ability to adjust timely to changes in trade
regulations and the migration and development of manufacturers
(which can affect where the Company’s products can best be
produced); (x) the regulation or prohibition of the transaction of
business with specific individuals or entities and their affiliates
or goods manufactured in (or containing raw materials or components
from) certain regions, such as the listing of a person or entity as
a Specially Designated National or Blocked Person by the U.S.
Department of the Treasury’s Office of Foreign Assets Control and
the issuance of Withhold Release Orders by the U.S. Customs and
Border Protection; (xi) changes in available factory and shipping
capacity, wage and shipping cost escalation, and store closures in
any of the countries where the Company’s or its licensees’ or
wholesale customers’ or other business partners’ stores are located
or products are sold or produced or are planned to be sold or
produced, as a result of civil conflict, war or terrorist acts, the
threat of any of the foregoing, or political or labor instability,
such as the current war in Ukraine that led to the Company’s exit
from its retail business in Russia and the cessation of its
wholesale operations in Russia and Belarus, and the temporary
cessation of business by many of its business partners in Ukraine;
(xii) disease epidemics and health-related concerns, such as the
recent COVID-19 pandemic, which could result in (and, in the case
of the COVID-19 pandemic, did result in some of the following)
supply-chain disruptions due to closed factories, reduced
workforces and production capacity, shipping delays, container and
trucker shortages, port congestion and other logistics problems,
closed stores, and reduced consumer traffic and purchasing, or
governments implement mandatory business closures, travel
restrictions or the like, and market or other changes that could
result in shortages of inventory available to be delivered to the
Company’s stores and customers, order cancellations and lost sales,
as well as in noncash impairments of the Company’s goodwill and
other intangible assets, operating lease right-of-use assets, and
property, plant and equipment; (xiii) actions taken towards
sustainability and social and environmental responsibility as part
of the Company’s sustainability and social and environmental
strategy may not be achieved or may be perceived to be falsely
claimed, which could diminish consumer trust in the Company’s
brands, as well as the Company’s brands’ values; (xiv) the failure
of the Company’s licensees to market successfully licensed products
or to preserve the value of the Company’s brands, or their misuse
of the Company’s brands; (xv) significant fluctuations of the U.S.
dollar against foreign currencies in which the Company transacts
significant levels of business; (xvi) the Company’s retirement plan
expenses recorded throughout the year are calculated using
actuarial valuations that incorporate assumptions and estimates
about financial market, economic and demographic conditions, and
differences between estimated and actual results give rise to gains
and losses, which can be significant, that are recorded immediately
in earnings, generally in the fourth quarter of the year; (xvii)
the impact of new and revised tax legislation and regulations; and
(xviii) other risks and uncertainties indicated from time to time
in the Company’s filings with the Securities and Exchange
Commission (“SEC”).
This press release includes, and the conference call/webcast
will include, certain non-GAAP financial measures, as defined under
SEC rules. Reconciliations of these measures are included in the
financial information following this Safe Harbor Statement, as well
as in the Company’s Current Report on Form 8-K furnished to the SEC
in connection with this earnings release, which is available on the
Company’s website at www.PVH.com and on the SEC’s website at
www.sec.gov.
The Company does not undertake any obligation to update publicly
any forward-looking statement, including, without limitation, any
estimate regarding revenue or earnings, whether as a result of the
receipt of new information, future events or otherwise.
PVH CORP. Consolidated GAAP Statements of
Operations (In millions, except per share data)
Quarter Ended
Six Months Ended
8/4/24
7/30/23
8/4/24
7/30/23
Net sales
$
1,965.1
$
2,105.2
$
3,815.3
$
4,156.3
Royalty revenue
87.7
80.1
168.9
164.8
Advertising and other revenue
21.5
21.7
42.0
43.8
Total revenue
$
2,074.3
$
2,207.0
$
4,026.2
$
4,364.9
Gross profit
$
1,245.9
$
1,272.3
$
2,444.6
$
2,522.6
Selling, general and administrative
expenses
1,083.3
1,138.5
2,100.6
2,202.5
Non-service related pension and
postretirement income
0.4
0.3
0.9
0.9
Other gain
—
—
10.0
—
Equity in net income of unconsolidated
affiliates
10.9
9.2
24.1
21.1
Earnings before interest and taxes
173.9
143.3
379.0
342.1
Interest expense, net
19.1
23.6
36.8
45.6
Pre-tax income
154.8
119.7
342.2
296.5
Income tax (benefit) expense
(3.2
)
25.5
32.8
66.3
Net income
$
158.0
$
94.2
$
309.4
$
230.2
Diluted net income per common share
(1)
$
2.80
$
1.50
$
5.39
$
3.65
Quarter Ended
Six Months Ended
8/4/24
7/30/23
8/4/24
7/30/23
Depreciation and amortization expense
$
69.8
$
75.5
$
141.9
$
147.8
Please see following pages for information related to non-GAAP
measures discussed in this release.
(1)
Please see Note A in Notes to Consolidated
GAAP Statements of Operations for the reconciliations of GAAP
diluted net income per common share to diluted net income per
common share on a non-GAAP basis.
PVH CORP. Non-GAAP Measures
The Company believes it is useful to investors to present its
results for the periods ended August 4, 2024 and July 30, 2023 on a
non-GAAP basis by excluding (i) the restructuring costs incurred in
the second quarter of 2024 related to the Company's multi-year
initiative to simplify its operating model by centralizing
processes and improving systems and automation to drive more
efficient, cost-effective ways of working across the organization
(the "Growth Driver 5 Actions"), consisting principally of
severance; (ii) the pre-tax gain recorded in the first quarter of
2024 in connection with the sale of the Company’s Heritage Brands
women's intimates business (the "Heritage Brands intimates
transaction"); (iii) the restructuring costs incurred in the second
quarter of 2023 related to actions taken in July 2023 under the
plans announced in August 2022 to reduce people costs in the
Company’s global offices by approximately 10% by the end of 2023
(the “2022 cost savings initiative”), consisting principally of
severance; and (iv) the tax effects associated with the foregoing
pre-tax items. The Company excludes these amounts because it deems
them to be non-recurring or non-operational and believes that their
exclusion (i) facilitates comparing the results being reported
against past and future results by eliminating amounts that it
believes are not comparable between periods, thereby permitting
management to evaluate performance and investors to make decisions
based on the ongoing operations of the Company, and (ii) assists
investors in evaluating the effectiveness of the Company’s
operations and underlying business trends in a manner that is
consistent with management’s evaluation of business performance.
The Company believes that investors often look at ongoing
operations of an enterprise as a measure of assessing performance.
The Company uses its results excluding these amounts to evaluate
its operating performance and to discuss its business with
investment institutions, the Company’s Board of Directors and
others. The Company’s results excluding the items described above
are also the basis for certain incentive compensation calculations.
The non-GAAP measures should be viewed in addition to, and not in
lieu of or superior to, the Company’s operating performance
measures calculated in accordance with GAAP. The information
presented on a non-GAAP basis may not be comparable to similarly
titled measures reported by other companies.
The following table presents the non-GAAP measures that are
discussed in this release. Please see Tables 1 through 5 for the
reconciliations of the GAAP amounts to amounts on a non-GAAP
basis.
Quarter Ended
Six Months Ended
8/4/24
7/30/23
8/4/24
7/30/23
Non-GAAP Measures
Selling, general and administrative
expenses (1)
$
1,068.0
$
1,099.5
$
2,085.3
$
2,163.5
Other gain (2)
—
Earnings before interest and taxes (3)
189.2
182.3
384.3
381.1
Income tax (benefit) expense (4)
(0.1
)
34.3
34.4
75.1
Net income (5)
170.2
124.4
313.1
260.4
Diluted net income per common share
(6)
$
3.01
$
1.98
$
5.45
$
4.13
(1)
Please see Table 3 for the reconciliations
of GAAP selling, general and administrative (“SG&A”) expenses
to SG&A expenses on a non-GAAP basis.
(2)
Please see Table 4 for the reconciliation
of GAAP other gain to other gain on a non-GAAP basis.
(3)
Please see Table 2 for the reconciliations
of GAAP earnings before interest and taxes to earnings before
interest and taxes on a non-GAAP basis.
(4)
Please see Table 5 for the reconciliations
of GAAP income tax (benefit) expense to income tax (benefit)
expense on a non-GAAP basis and an explanation of the calculation
of the tax effects associated with the pre-tax items identified as
a non-GAAP exclusions.
(5)
Please see Table 1 for the reconciliations
of GAAP net income to net income on a non-GAAP basis.
(6)
Please see Note A in Notes to Consolidated
GAAP Statements of Operations for the reconciliations of GAAP
diluted net income per common share to diluted net income per
common share on a non-GAAP basis.
PVH CORP. Reconciliations of GAAP to Non-GAAP
Amounts (In millions, except per share data)
Table 1 -
Reconciliations of GAAP net income to net income on a non-GAAP
basis
Quarter Ended
Six Months Ended
8/4/24
7/30/23
8/4/24
7/30/23
Net income
$
158.0
$
94.2
$
309.4
$
230.2
Diluted net income per common share
(1)
$
2.80
$
1.50
$
5.39
$
3.65
Pre-tax items excluded:
SG&A expenses associated with the 2022
cost savings initiative
39.0
39.0
SG&A expenses associated with the
Growth Driver 5 Actions
15.3
15.3
Gain in connection with the Heritage
Brands intimates transaction (recorded in other gain)
(10.0
)
Tax effect of the pre-tax items above
(2)
(3.1
)
(8.8
)
(1.6
)
(8.8
)
Net income on a non-GAAP basis
$
170.2
$
124.4
$
313.1
$
260.4
Diluted net income per common share on a
non-GAAP basis (1)
$
3.01
$
1.98
$
5.45
$
4.13
(1)
Please see Note A in Notes to the
Consolidated GAAP Statements of Operations for the reconciliations
of GAAP diluted net income per common share to diluted net income
per common share on a non-GAAP basis.
(2)
Please see Table 5 for an explanation of
the calculation of the tax effects of the above items.
Table 2 - Reconciliations of GAAP earnings
before interest and taxes to earnings before interest and taxes on
a non-GAAP basis
Quarter Ended
Six Months Ended
8/4/24
7/30/23
8/4/24
7/30/23
Earnings before interest and taxes
$
173.9
$
143.3
$
379.0
$
342.1
Items excluded:
SG&A expenses associated with the 2022
cost savings initiative
39.0
39.0
SG&A expenses associated with the
Growth Driver 5 Actions
15.3
15.3
Gain in connection with the Heritage
Brands intimates transaction (recorded in other gain)
(10.0
)
Earnings before interest and taxes on a
non-GAAP basis
$
189.2
$
182.3
$
384.3
$
381.1
Table 3 -
Reconciliations of GAAP SG&A expenses to SG&A expenses on a
non-GAAP basis
Quarter Ended
Six Months Ended
8/4/24
7/30/23
8/4/24
7/30/23
SG&A expenses
$
1,083.3
$
1,138.5
$
2,100.6
$
2,202.5
Items excluded:
Expenses associated with the 2022 cost
savings initiative
(39.0
)
(39.0
)
Expenses associated with the Growth Driver
5 Actions
(15.3
)
(15.3
)
SG&A expenses on a non-GAAP basis
$
1,068.0
$
1,099.5
$
2,085.3
$
2,163.5
PVH CORP. Reconciliations of GAAP to Non-GAAP Amounts
(continued) (In millions, except per share data)
Table 4 -
Reconciliation of GAAP other gain to other gain on a non-GAAP
basis
Six Months Ended
8/4/24
Other gain
$
10.0
Item excluded:
Gain in connection with the Heritage
Brands intimates transaction
(10.0
)
Other gain on a non-GAAP basis
$
—
Table 5 -
Reconciliations of GAAP income tax (benefit) expense to income tax
(benefit) expense on a non-GAAP basis
Quarter Ended
Six Months Ended
8/4/24
7/30/23
8/4/24
7/30/23
Income tax (benefit) expense
$
(3.2
)
$
25.5
$
32.8
$
66.3
Item excluded:
Tax effect of pre-tax items identified as
non-GAAP exclusions (1)
3.1
8.8
1.6
8.8
Income tax (benefit) expense on a non-GAAP
basis
$
(0.1
)
$
34.3
$
34.4
$
75.1
(1)
The estimated tax effects associated with
the Company’s exclusions on a non-GAAP basis are based on the
Company’s assessment of deductibility. In making this assessment,
the Company evaluates each pre-tax item that it has identified as a
non-GAAP exclusion to determine if such item is (i) taxable or tax
deductible, in which case the tax effect is taken at the applicable
income tax rate in the local jurisdiction, or (ii) non-taxable or
non-deductible, in which case the Company assumes no tax
effect.
PVH CORP. Notes to Consolidated GAAP Statements of
Operations (In millions, except per share data)
A. The Company computed its diluted net income per common share
as follows:
Quarter Ended
Quarter Ended
8/4/24
7/30/23
GAAP
Non-GAAP
GAAP
Non-GAAP
Results
Adjustments (1)
Results
Results
Adjustments (2)
Results
Net income
$
158.0
$
(12.2
)
$
170.2
$
94.2
$
(30.2
)
$
124.4
Weighted average common shares
55.9
55.9
62.1
62.1
Weighted average dilutive securities
0.6
0.6
0.6
0.6
Total shares
56.5
56.5
62.7
62.7
Diluted net income per common share
$
2.80
$
3.01
$
1.50
$
1.98
Six Months Ended
Six Months Ended
8/4/24
7/30/23
GAAP
Non-GAAP
GAAP
Non-GAAP
Results
Adjustments (1)
Results
Results
Adjustments (2)
Results
Net income
$
309.4
$
(3.7
)
$
313.1
$
230.2
$
(30.2
)
$
260.4
Weighted average common shares
56.7
56.7
62.4
62.4
Weighted average dilutive securities
0.7
0.7
0.7
0.7
Total shares
57.4
57.4
63.1
63.1
Diluted net income per common share
$
5.39
$
5.45
$
3.65
$
4.13
(1)
Represents the impact on net income in the
applicable periods ended August 4, 2024 from the elimination of (i)
the restructuring costs related to the Growth Driver 5 Actions;
(ii) the pre-tax gain recorded in connection with the Heritage
Brands intimates transaction; and (iii) the tax effects associated
with the foregoing pre-tax items. Please see Table 1 for the
reconciliations of GAAP net income to net income on a non-GAAP
basis.
(2)
Represents the impact on net income in the
periods ended July 30, 2023 from the elimination of (i) the
restructuring costs related to the 2022 cost savings initiative;
and (ii) the tax effects associated with the foregoing pre-tax
item. Please see Table 1 for the reconciliations of GAAP net income
to net income on a non-GAAP basis.
PVH CORP. Consolidated Balance Sheets (In
millions)
8/4/24
7/30/23
ASSETS
Current Assets:
Cash and Cash Equivalents
$
610.0
$
372.8
Receivables
906.9
910.0
Inventories
1,582.8
1,795.5
Other
314.7
335.8
Total Current Assets
3,414.4
3,414.1
Property, Plant and Equipment
806.9
876.0
Operating Lease Right-of-Use Assets
1,224.0
1,291.2
Goodwill and Other Intangible Assets
5,424.5
5,586.5
Other Assets
367.9
374.6
TOTAL ASSETS
$
11,237.7
$
11,542.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable and Accrued Expenses
$
1,938.1
$
2,090.9
Current Portion of Operating Lease
Liabilities
302.8
328.6
Short-Term Borrowings
8.4
15.2
Current Portion of Long-Term Debt
510.8
688.9
Other Liabilities
548.5
624.7
Long-Term Portion of Operating Lease
Liabilities
1,069.1
1,136.9
Long-Term Debt
1,668.2
1,619.6
Stockholders’ Equity
5,191.8
5,037.6
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
11,237.7
$
11,542.4
Note: Year over year balances are impacted by changes in foreign
currency exchange rates.
PVH CORP. Segment Data (In millions)
REVENUE BY
SEGMENT
Quarter Ended
Quarter Ended
8/4/24
7/30/23
Tommy Hilfiger North
America
Net sales
$
296.2
$
297.6
Royalty revenue
22.8
18.5
Advertising and other revenue
4.4
4.3
Total
323.4
320.4
Tommy Hilfiger
International
Net sales
750.8
800.2
Royalty revenue
14.5
13.9
Advertising and other revenue
4.7
4.7
Total
770.0
818.8
Total Tommy
Hilfiger
Net sales
1,047.0
1,097.8
Royalty revenue
37.3
32.4
Advertising and other revenue
9.1
9.0
Total
1,093.4
1,139.2
Calvin Klein North
America
Net sales
269.7
269.9
Royalty revenue
39.0
34.4
Advertising and other revenue
9.7
10.5
Total
318.4
314.8
Calvin Klein
International
Net sales
597.9
610.3
Royalty revenue
11.4
13.0
Advertising and other revenue
2.6
2.1
Total
611.9
625.4
Total Calvin
Klein
Net sales
867.6
880.2
Royalty revenue
50.4
47.4
Advertising and other revenue
12.3
12.6
Total
930.3
940.2
Heritage Brands
Wholesale
Net sales
50.5
127.2
Royalty revenue
—
0.3
Advertising and other revenue
0.1
0.1
Total
50.6
127.6
Total
Revenue
Net sales
1,965.1
2,105.2
Royalty revenue
87.7
80.1
Advertising and other revenue
21.5
21.7
Total
$
2,074.3
$
2,207.0
PVH CORP. Segment Data (continued) (In
millions)
EARNINGS BEFORE
INTEREST AND TAXES BY SEGMENT
Quarter Ended
Quarter Ended
8/4/24
7/30/23
Results
Results
Under
Non-GAAP
Under
Non-GAAP
GAAP
Adjustments (1)
Results
GAAP
Adjustments (2)
Results
Tommy Hilfiger North America
$
34.3
$
(1.4
)
$
35.7
$
13.2
$
(6.4
)
$
19.6
Tommy Hilfiger International
67.7
(7.3
)
75.0
73.4
(12.3
)
85.7
Total Tommy Hilfiger
102.0
(8.7
)
110.7
86.6
(18.7
)
105.3
Calvin Klein North America
37.8
(1.4
)
39.2
20.4
(5.9
)
26.3
Calvin Klein International
74.8
(5.2
)
80.0
80.2
(8.5
)
88.7
Total Calvin Klein
112.6
(6.6
)
119.2
100.6
(14.4
)
115.0
Heritage Brands Wholesale
6.6
—
6.6
2.6
(4.6
)
7.2
Corporate
(47.3
)
—
(47.3
)
(46.5
)
(1.3
)
(45.2
)
Total earnings before interest and
taxes
$
173.9
$
(15.3
)
$
189.2
$
143.3
$
(39.0
)
$
182.3
(1)
The adjustments for the quarter ended
August 4, 2024 represent the elimination of the restructuring costs
related to the Growth Driver 5 Actions.
(2)
The adjustments for the quarter ended July
30, 2023 represent the elimination of the restructuring costs
related to the 2022 cost savings initiative.
PVH CORP. Segment Data (continued) (In
millions)
REVENUE BY
SEGMENT
Six Months Ended
Six Months Ended
8/4/24
7/30/23
Tommy Hilfiger North
America
Net sales
$
567.6
$
564.3
Royalty revenue
43.5
38.8
Advertising and other revenue
9.0
8.8
Total
620.1
611.9
Tommy Hilfiger
International
Net sales
1,450.8
1,613.0
Royalty revenue
27.8
29.6
Advertising and other revenue
8.0
9.0
Total
1,486.6
1,651.6
Total Tommy
Hilfiger
Net sales
2,018.4
2,177.3
Royalty revenue
71.3
68.4
Advertising and other revenue
17.0
17.8
Total
2,106.7
2,263.5
Calvin Klein North
America
Net sales
509.4
497.6
Royalty revenue
74.7
70.1
Advertising and other revenue
19.6
21.4
Total
603.7
589.1
Calvin Klein
International
Net sales
1,185.3
1,208.6
Royalty revenue
22.8
25.8
Advertising and other revenue
5.3
4.4
Total
1,213.4
1,238.8
Total Calvin
Klein
Net sales
1,694.7
1,706.2
Royalty revenue
97.5
95.9
Advertising and other revenue
24.9
25.8
Total
1,817.1
1,827.9
Heritage Brands
Wholesale
Net sales
102.2
272.8
Royalty revenue
0.1
0.5
Advertising and other revenue
0.1
0.2
Total
102.4
273.5
Total
Revenue
Net sales
3,815.3
4,156.3
Royalty revenue
168.9
164.8
Advertising and other revenue
42.0
43.8
Total
$
4,026.2
$
4,364.9
PVH CORP. Segment Data (continued) (In
millions)
EARNINGS BEFORE
INTEREST AND TAXES BY SEGMENT
Six Months Ended
Six Months Ended
8/4/24
7/30/23
Results
Results
Under
Non-GAAP
Under
Non-GAAP
GAAP
Adjustments (1)
Results
GAAP
Adjustments (2)
Results
Tommy Hilfiger North America
$
58.7
$
(1.4
)
$
60.1
$
15.5
$
(6.4
)
$
21.9
Tommy Hilfiger International
144.1
(7.3
)
151.4
199.7
(12.3
)
212.0
Total Tommy Hilfiger
202.8
(8.7
)
211.5
215.2
(18.7
)
233.9
Calvin Klein North America
74.4
(1.4
)
75.8
22.6
(5.9
)
28.5
Calvin Klein International
171.2
(5.2
)
176.4
180.6
(8.5
)
189.1
Total Calvin Klein
245.6
(6.6
)
252.2
203.2
(14.4
)
217.6
Heritage Brands Wholesale
22.9
10.0
12.9
17.6
(4.6
)
22.2
Corporate
(92.3
)
—
(92.3
)
(93.9
)
(1.3
)
(92.6
)
Total earnings before interest and
taxes
$
379.0
$
(5.3
)
$
384.3
$
342.1
$
(39.0
)
$
381.1
(1)
The adjustments for the six months ended
August 4, 2024 represent (i) the elimination of the restructuring
costs related to the Growth Driver 5 Actions and (ii) the
elimination of the gain recorded in connection with the Heritage
Brands intimates transaction.
(2)
The adjustments for the six months ended
July 30, 2023 represent the elimination of the restructuring costs
related to the 2022 cost savings initiative.
PVH CORP. Reconciliations of Constant Currency
Revenue (In millions)
As a supplement to the Company’s reported operating results, the
Company presents constant currency revenue information, which is a
non-GAAP financial measure. The Company presents results in this
manner because it is a global company that transacts business in
multiple currencies and reports financial information in U.S.
dollars. Foreign currency exchange rate fluctuations affect the
amounts reported by the Company in U.S. dollars with respect to its
foreign revenues. Exchange rate fluctuations can have a significant
impact on reported revenues. The Company believes presenting
constant currency revenue information provides useful information
to investors, as it provides information to assess how its
businesses performed excluding the effects of changes in foreign
currency exchange rates and assists investors in evaluating the
effectiveness of the Company’s operations and underlying business
trends in a manner that is consistent with management’s evaluation
of business performance.
The Company calculates constant currency revenue information by
translating its foreign revenues for the relevant period into U.S.
dollars at the average exchange rates in effect during the
comparable prior year period (rather than at the actual exchange
rates in effect during the relevant period).
Constant currency performance should be viewed in addition to,
and not in lieu of or as superior to, the Company’s operating
performance calculated in accordance with GAAP. The constant
currency revenue information presented may not be comparable to
similarly described measures reported by other companies.
GAAP Revenue
% Change
Quarter Ended
GAAP
Negative Impact of Foreign
Exchange
Constant Currency
8/4/24
7/30/23
Tommy Hilfiger International
$
770.0
$
818.8
(6.0
)%
(1.4
)%
(4.6
)%
Total Tommy Hilfiger
1,093.4
1,139.2
(4.0
)%
(1.1
)%
(2.9
)%
Calvin Klein International
611.9
625.4
(2.2
)%
(2.0
)%
(0.2
)%
Total Calvin Klein
930.3
940.2
(1.1
)%
(1.4
)%
0.3
%
Total International Revenue
1,381.9
1,444.2
(4.3
)%
(1.6
)%
(2.7
)%
Total Revenue
$
2,074.3
$
2,207.0
(6.0
)%
(1.1
)%
(4.9
)%
Owned and Operated Retail Stores
$
836.4
$
872.2
(4.1
)%
(1.6
)%
(2.5
)%
Owned and Operated Digital Commerce
180.7
193.1
(6.4
)%
(1.6
)%
(4.8
)%
Total Direct-to-Consumer
$
1,017.1
$
1,065.3
(4.5
)%
(1.6
)%
(2.9
)%
Wholesale
$
948.0
$
1,039.9
(8.8
)%
(0.8
)%
(8.0
)%
PVH CORP. Full Year and Quarterly Reconciliations of
GAAP to Non-GAAP Amounts
The Company is presenting its 2024 estimated results on a
non-GAAP basis by excluding (i) the restructuring costs incurred
and expected to be incurred related to the Growth Driver 5 Actions,
consisting primarily of severance, (ii) the pre-tax gain recorded
in the first quarter of 2024 in connection with the Company’s sale
of the Heritage Brands women’s intimates business and (iii) the
estimated tax effects associated with the foregoing pre-tax
items.
The 2024 estimated results are presented on both a GAAP and
non-GAAP basis. The Company believes presenting these results on a
non-GAAP basis provides useful additional information to investors.
The Company excludes such amounts that it deems to be non-recurring
or non-operational and believes that excluding them (i) facilitates
comparing the results being reported against past and future
results by eliminating amounts that it believes are not comparable
between periods, thereby permitting management to evaluate
performance and investors to make decisions based on the ongoing
operations of the Company, and (ii) assists investors in evaluating
the effectiveness of the Company’s operations and underlying
business trends in a manner that is consistent with management’s
evaluation of business performance. The Company uses its results
excluding these amounts to evaluate its operating performance and
to discuss its business with investment institutions, the Company’s
Board of Directors and others. The Company’s results excluding the
items described above are also the basis for certain incentive
compensation calculations. The non-GAAP measures should be viewed
in addition to, and not in lieu of or superior to, the Company’s
operating performance measures calculated in accordance with GAAP.
The information presented on a non-GAAP basis may not be comparable
to similarly titled measures reported by other companies.
The estimated tax effects associated with the above pre-tax
items are based on the Company’s assessment of deductibility. In
making this assessment, the Company evaluated each pre-tax item
identified above as a non-GAAP exclusion to determine if such item
is taxable or tax deductible, and, if so, in what jurisdiction the
tax expense or tax deduction would occur. All of the pretax items
identified as non-GAAP exclusions were identified as either
primarily taxable or tax deductible, with the tax effect taken at
the applicable income tax rate in the local jurisdiction, or as
non-taxable or non-deductible, in which case the Company assumed no
tax effect.
2024 Net Income
Per Common Share Reconciliations
Current Guidance
Previous Guidance
Full Year 2024 (Estimated)
Third Quarter 2024
(Estimated)
Full Year 2024 (Estimated)
GAAP net income per common share
$11.20 to $11.45
Approximately $2.30
$11.15 to $11.40
Estimated per common share impact of items
identified as non-GAAP exclusions
$(0.35)
$(0.20)
$0.15
Net income per common share on a Non-GAAP
basis
$11.55 to $11.80
Approximately $2.50
$11.00 to $11.25
The GAAP net income per common share amounts presented in the
above table, as well as the amounts excluded in providing non GAAP
earnings guidance, would be expected to change as a result of (i)
acquisition, divestment or similar transactions or activities, (ii)
the timing and strategy of restructuring and integration
initiatives or other one-time events, such as the Growth Driver 5
Actions, that the Company engages in or suffers during the period,
(iii) any market or other changes affecting the Company’s expected
actuarial gain or loss on retirement plans, including the recent
volatility in the financial markets, or (iv) any discrete tax
events including changes in tax rates or tax law and events arising
from audits or the resolution of uncertain tax positions.
PVH CORP. Full Year and Quarterly Reconciliations of
GAAP to Non-GAAP Amounts (continued)
2024 Operating
Margin Reconciliation
Current Guidance
Full Year 2024 (Estimated)
GAAP operating margin
Approximately 9.8%
Estimated impact of items identified as
non-GAAP exclusions
(0.3)%
Operating margin on a Non-GAAP basis
Approximately 10.1%
Reconciliations
of 2024 Constant Currency Revenue Guidance
Full Year 2024 (Estimated)
Third Quarter 2024
(Estimated)
GAAP revenue decrease
(6)% to (7)%
(6)% to (7)%
Positive impact of foreign exchange
—%
1%
Non-GAAP revenue decrease on a constant
currency basis
(6)% to (7)%
(7)% to (8 )%
Please refer to the section entitled "Reconciliations of
Constant Currency Revenue” on page 17 this release for a
description of the presentation of constant currency amounts.
Reconciliations
of GAAP Diluted Net Income Per Common Share to Diluted Net Income
Per Common Share on a Non-GAAP Basis
Full Year 2023
Third Quarter 2023
(Actual)
(Actual)
(In millions, except
per share data)
Results Under GAAP
Adjustments (1)
Non-GAAP Results
Results Under GAAP
Adjustments (2)
Non-GAAP Results
Net income
$
663.6
$
4.7
$
658.9
$
161.6
$
(14.8
)
$
176.4
Total weighted average shares
61.7
61.7
60.8
60.8
Diluted net income per common share
$
10.76
$
10.68
$
2.66
$
2.90
(1)
Represents the impact on net income in the
year ended February 4, 2024 from the elimination of (i) a $46
million recognized actuarial gain on retirement plans in the fourth
quarter of 2023; (ii) the $15 million gain recorded in connection
with the Heritage Brands intimates transaction in the fourth
quarter of 2023; (iii) $2 million of costs related to the Heritage
Brands intimates transaction incurred in the fourth quarter of
2023; (iv) $61 million of restructuring costs related to the 2022
cost savings initiative incurred in the second, third and fourth
quarters of 2023; and (v) a $7 million tax benefit associated with
the foregoing pre-tax items.
(2)
Represents the impact on net income in the
quarter ended October 29, 2023 from the elimination of (i) $19
million of restructuring costs related to the 2022 cost savings
initiative; and (ii) a $4 million tax benefit associated with the
foregoing pre-tax item.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240827501476/en/
Investor Contact: Sheryl Freeman
investorrelations@pvh.com Media Contact:
communications@pvh.com
Grafico Azioni PVH (NYSE:PVH)
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Da Ott 2024 a Nov 2024
Grafico Azioni PVH (NYSE:PVH)
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Da Nov 2023 a Nov 2024
