PVH Reports 4 Percent Revenue Growth

PVH(NYSE:PVH) released second quarter 2025 results on August 6, delivering 4% year-over-year reported revenue growth, 8.2% operating margin (non-GAAP), and $2.52 non-GAAP EPS, exceeding guidance on both the top and bottom lines (non-GAAP). The company reaffirmed its full-year constant currency revenue and EPS guidance for FY2025 (non-GAAP), announced increased marketing spend, and provided enhanced detail about tariff impacts and operational progress within core brands Tommy Hilfiger and Calvin Klein (non-GAAP). Key insights focus on PVH's operational transformation, tariff mitigation outlook, and accelerating brand-led growth strategies.

Operational turnaround at Calvin Klein unlocks margin gains

During Q1 2025, Calvin Klein faced material operational headwinds as it centralized global product capabilities in New York. However, management indicated that sequential improvements were realized by fall 2025 (non-GAAP), and that targeted margin recovery and on-time deliveries have already been secured for spring 2026 (non-GAAP).

"So if you look at Fall 2025, we have made the sequential improvements from spring that we set out to do. If you look at Spring 2026, we have already secured the go-in margin improvements we targeted to get back. And we are on time for the deliveries. So from there, we are fully back on track. So David and the Calvin team have done a really, really good job working through that and coming back. The reason we're setting up these capabilities, and why it was worth it, is because it will pay off for many years to come. We now have the a strong global product engine for both Calvin and Tommy for each of the global brands. Serving our regions. So feel very good about how we work through it."
-- Stefan Larsson, Chief Executive Officer

PVH’s rapid operational normalization and creation of a unified global product engine for Calvin Klein and Tommy Hilfiger position both brands for improved long-term scalability and gross margin stability.

PVH boosts marketing as global brand appeal drives consumer acquisition

PVH noted sequential improvement in direct-to-consumer (DTC) results across regions (non-GAAP), with double-digit digital channel growth in the Americas (non-GAAP) and high single-digit gross merchandise value (GMV) gains at major APAC online events. Management highlighted successful celebrity-driven campaigns, Sales of Calvin Klein cotton stretch styles rose 14% globally. Within Tommy Hilfiger summer shop styles, women's wear increased 10% globally.

"The combination of a powerful product category offense, tied to strong product innovation, connected to a cut-through campaign with globally relevant talent, is a repeatable model that we know works. The Bad Bunny campaign has increased brand awareness, driving stronger traffic and conversion. It's also creating a strong halo effect across men's underwear. Sales of our cotton stretch styles were up 14% globally in the quarter, following the 25% growth we delivered last quarter. Building on this success, for this fall, we are bringing that same next-level product innovation and newness to our largest and most successful women's underwear program with the launch of our Icon cotton modal franchise. It will also be supported by a global campaign featuring one of the most exciting global superstars in music. We will again drive commercial impact by activating a full funnel approach across all regions."
-- Stefan Larsson, Chief Executive Officer

Sustained investment in global marketing amplification and full-funnel campaign execution is producing measurable volume gains and greater consumer engagement, indicating effective demand generation and positioning for further market share capture.

Tariff headwinds persist but mitigation expected in 2026

Gross margin (non-GAAP) of 57.7% declined by 240 basis points year-over-year, with rising U.S. tariff rates contributing to a negative EBIT impact projected at $70 million (approximately $1.15 per share) for FY2025 (non-GAAP), up from previous guidance. Management emphasized that 70% of revenue is generated internationally, and highlighted a broad mitigation toolkit across the supply chain and pricing levers.

"We'd previously communicated that we'd mitigate approximately 50% of the cost of the prior cost in 2025 with more over time. With the newly announced rates coming in for Q4 for us around two times higher than we previously had talked about, we do see that mitigation cost being percentage being a little bit lower for 2025. But most importantly, we expect to continue to expand on our mitigation efforts through the strategic actions throughout 2026. You know, Stefan mentioned we feel really good about the premium positioning of our brands, and we'll continue to look at all levers across the entire value chain to mitigate the impact. This includes continuing to prioritize supply chain internal efficiencies first. And any pricing actions we take will be targeted. Based on where we have pricing power. That's really important and always being sure to balance that price value for the consumer."
-- Zac Coughlin, Chief Financial Officer

The company’s globally diversified revenue mix and deliberate supply chain strategy reduce systemic tariff risk, reinforcing long-term earnings resilience.

Looking Ahead

PVH reaffirmed full-year FY2025 guidance for constant currency revenue as flat to slightly increasing (non-GAAP), operating margin (non-GAAP) at approximately 8.5%, non-GAAP EPS between $10.75 and $11. Management forecasted an incremental $70 million non-GAAP EBIT headwind from tariffs but expects to fully mitigate the impact over time through a combination of supply chain optimization and selective pricing.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.