Key Takeaways
PVH Corp cut its full-year revenue outlook to approximately flat, citing prolonged effects from the Middle East conflict on its European business.
"We are balancing two opposing forces — the increasing brand and business momentum we are driving in both Calvin Klein and Tommy Hilfiger, and on the other, the prolonged effects of the Middle East conflict, which is putting pressure on the consumer in EMEA," Chief Executive Officer Stefan Larsson said.
The owner of Calvin Klein and Tommy Hilfiger reported first-quarter revenue of $2.025 billion, up 2% from a year earlier and exceeding its guidance for a slight increase. Non-GAAP earnings per share of $2.01 topped the company's forecast of $1.65 to $1.80. On a constant-currency basis, revenue declined 2%, in line with guidance.
The revised outlook reflects a roughly $195 million gross tariff impact on full-year earnings, partially offset by $100 million in expected tariff refunds. PVH shares fell 19.7% on the news, according to market data.
EMEA revenue declined 5% on a constant-currency basis in the first quarter, driven by softer consumer demand due to the Middle East conflict and its broader macroeconomic effects. The Americas segment fell 2% on a constant-currency basis, as growth in direct-to-consumer was more than offset by wholesale declines. Asia-Pacific revenue rose 6% on a constant-currency basis, including a roughly 4% benefit from the timing of Lunar New Year.
Direct-to-consumer revenue increased 3% on a constant-currency basis, with owned-and-operated digital commerce up 6% across all regions. Wholesale revenue declined 6% on a constant-currency basis. Gross margin held steady at 58.6%, as tariff mitigation actions and a favorable mix shift offset higher US tariffs and an increased promotional environment.
Tommy Hilfiger revenue rose 3% on a reported basis but fell 2% in constant currency. Calvin Klein revenue increased 1% on a reported basis and declined 3% in constant currency.
The company now expects full-year 2026 revenue to be approximately flat on a reported basis, compared with its prior forecast of a slight increase. It reaffirmed its non-GAAP operating margin outlook of approximately 8.8% and its EPS guidance of $11.80 to $12.10. The guidance includes the benefit of tariff refunds, which the company expects to recognize in the second quarter.
PVH plans to repurchase at least $300 million of its common stock this year. The company did not buy back any shares in the first quarter.
The guidance cut signals that management expects geopolitical headwinds to persist in Europe through the remainder of the year. Investors will watch second-quarter results for further signs of consumer recovery in the region and the timing of the expected tariff refunds.
This article is for informational purposes only and does not constitute investment advice.
