PVH Corp., parent of Calvin Klein and Tommy Hilfiger, navigated a difficult second quarter marked by fallout from conflict in the Middle East, posting a steep noncash impairment charge even as it exceeded Wall Street’s adjusted profit expectations. Revenue for the quarter ending August 2 fell 3 percent on a constant-currency basis to $2.1 billion, outperforming the company’s own guidance though matching analyst projections.
Impairment Charge Drags Down Net Results
A $439 million pretax charge tied to shifting valuation assumptions amid geopolitical and macroeconomic pressures pushed PVH to a net loss of roughly $103 million, compared with profit of $224.2 million a year earlier. Tariff refunds from the U.S. government of about $107 million helped offset some of the damage, and gross margin climbed to 63 percent from 57.7 percent. Still, adjusted earnings per share of $3.70 comfortably cleared both company guidance and analyst forecasts.
CEO Stefan Larsson credited direct-to-consumer growth in the Americas and Asia-Pacific, along with rising e-commerce traffic, as evidence that brand momentum for Calvin Klein and Tommy Hilfiger remains intact despite global disruptions.
Regional Sales Show Mixed Picture
By brand, Tommy Hilfiger revenue held flat at $1.1 billion, while Calvin Klein sales dropped 7 percent to $913.3 million, partly due to shifted wholesale shipment timing. Regionally, Europe, the Middle East and Africa fell 6 percent on prolonged conflict effects, the Americas slipped 1 percent, and Asia-Pacific rose 3 percent.
PVH also announced Alexis Rollier, formerly Sephora’s global CFO and COO, will join as its next chief financial officer next week. The company reaffirmed its full-year outlook, expecting flat reported revenue and a slight decline in constant currency, a forecast it had already trimmed in June because of the Middle East conflict.