- 2022 fourth quarter and full year revenue exceeded guidance:
- Fourth quarter revenue increased 2% to $2.489 billion compared
to the prior year period (increased 8% on a constant currency
basis); guidance was a decrease of approximately 4% (an increase of
approximately 4% on a constant currency basis)
- Full year 2022 revenue decreased 1% to $9.024 billion compared
to 2021 (increased 5% on a constant currency basis); guidance was a
decrease of approximately 3% (an increase of approximately 4% on a
constant currency basis)
- 2022 fourth quarter and full year EPS exceeded guidance:
- GAAP basis: $2.18 (fourth quarter) compared to guidance of
approximately $0.45 and $3.03 (full year) compared to guidance of
approximately $1.37
- Non-GAAP basis: $2.38 (fourth quarter) compared to guidance of
approximately $1.65 and $8.97 (full year) compared to guidance of
approximately $8.25
- 2023 full year outlook
- Revenue: Projected to increase 3% to 4% (2% to 3% on a constant
currency basis) as compared to 2022
- Operating margin: Approximately 10%
- EPS: Approximately $10.00
PVH Corp. [NYSE: PVH] today reported its 2022 fourth quarter and
full year results and provided its 2023 outlook.
Stefan Larsson, Chief Executive Officer, commented, “We
delivered strong fourth quarter performance with stronger than
expected high-single digit constant currency revenue growth and
earnings above guidance. Our disciplined execution of the PVH+
Plan, our multi-year, brand-focused, direct-to-consumer and
digitally-led strategy enabled us to compete to win despite the
challenging macro situation. Since we introduced our PVH+ Plan, we
have made significant progress all around the world in driving
brand desirability by getting closer to the consumer, creating
great products and delivering very strong consumer engagement
through impactful talent partnerships.”
Mr. Larsson, added, “Looking ahead, we are entering 2023 with
significant momentum, and we will continue to execute the PVH+ Plan
with discipline towards our long-term vision to build TOMMY
HILFIGER and Calvin Klein into the most desirable lifestyle brands
in the world and be one of the highest performing brand groups in
our sector.”
Zac Coughlin, Chief Financial Officer, said, “We are well
positioned to achieve double-digit EPS growth in 2023 and have a
multi-year opportunity ahead of us to drive meaningful top and
bottom-line growth. Our plan is built on two of the most powerful
brands in the fashion industry, and we are doubling down on the
PVH+ Plan growth drivers and focusing on what is within our control
to drive sustainable and profitable growth, generate strong cash
flows, and deliver attractive returns for our shareholders.”
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. References to the
Company’s underlying revenue growth refers to the revenue change on
a constant currency basis, excluding the impacts of the war in
Ukraine, the Heritage Brands transaction and the exit from the
Heritage Brands retail business, as applicable.
Fourth Quarter Review:
- Revenue increased 2% compared to the prior year period
(increased 8% on a constant currency basis), inclusive of a 1%
reduction resulting from the impact of the war in Ukraine,
including closures of Company stores in Russia, the cessation of
wholesale shipments to Russia and Belarus, and a reduction in
wholesale shipments to Ukraine. The Company’s underlying high
single-digit revenue growth compared to the prior year period was
driven by growth in both its Tommy Hilfiger and Calvin Klein brand
businesses. The increase included strong revenue growth in Europe,
as well as growth in North America, particularly in the
direct-to-consumer business, despite the challenging global
macroeconomic environment. The Company continued to experience
negative impacts from the COVID-19 pandemic in China.
- Direct-to-consumer revenue increased 4% compared to the
prior year period (increased 10% on a constant currency
basis).
- Wholesale revenue was flat compared to the prior year
period (increased 6% on a constant currency basis).
- Total digital revenue decreased 8% (decreased 2% on a
constant currency basis) compared to exceptionally strong revenue
in the prior year period. Digital revenue includes the sales
through the Company’s digital commerce businesses and sales to the
digital businesses of its traditional and pure play wholesale
customers reflected in the direct-to-consumer and wholesale
revenues above. Digital penetration as a percentage of total
revenue was approximately 20%.
- Gross margin was 55.9% compared to 58.3% in the prior
year period. The benefit from price increases and a favorable shift
in regional and channel mix were more than offset by higher costs
and increased promotional activity due to elevated inventory levels
industry-wide.
- Inventory increased 34% compared to the prior year
period due to a combination of (i) abnormally low inventory levels
in the prior year period, (ii) earlier receipts of inventory, and
(iii) higher product costs.
Fourth Quarter Consolidated Results:
- Revenue increased 2% to $2.489 billion compared to the
prior year period (increased 8% on a constant currency basis),
inclusive of a 1% reduction resulting from the impact of the war in
Ukraine.
- Tommy Hilfiger revenue increased 3% compared to the
prior year period (increased 10% on a constant currency basis)
- Tommy Hilfiger International revenue increased 3%
(increased 11% on a constant currency basis)
- Tommy Hilfiger North America revenue increased 5%
- Calvin Klein revenue increased 3% compared to the prior
year period (increased 8% on a constant currency basis)
- Calvin Klein International revenue increased 2%
(increased 10% on a constant currency basis)
- Calvin Klein North America revenue increased 4%
- Heritage Brands revenue decreased 10% compared to the
prior year period.
- Earnings before interest and taxes (“EBIT”) on a GAAP
basis was $297 million, inclusive of a $21 million negative impact
due to foreign currency translation, compared to $223 million in
the prior year period. Included in the fourth quarter and the prior
year period were recognized actuarial gains on retirement plans of
$78 million and $49 million, respectively. EBIT on a GAAP basis for
the fourth quarter also includes other amounts described under the
heading “Non-GAAP Exclusions” later in this release. EBIT on a
non-GAAP basis for these periods exclude these amounts. EBIT on a
non-GAAP basis was $215 million, inclusive of a $21 million
negative impact due to foreign currency translation, compared to
$175 million in the prior year period. The increase was driven by
revenue growth on a constant currency basis and lower expenses,
partially offset by the lower gross margins discussed above.
Expenses decreased compared to the prior year period as 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: $2.18 compared to $5.53 in the prior year
period.
- Non-GAAP basis: $2.38 compared to $2.84 in the prior
year period.
EPS on both a GAAP basis and non-GAAP basis
for the fourth quarter included the negative impacts of (i) $0.23
per share related to foreign currency translation and (ii) $0.13
per share related to the war in Ukraine.
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 exclude these amounts.
- Interest expense decreased to $22 million from $24
million in the prior year period.
- Effective tax rate was 49.7% on a GAAP basis as compared
to (96.0)% in the prior year period. The effective tax rate for the
fourth quarter of 2022 included the negative impact resulting from
the $417 million pre-tax noncash goodwill impairment charge
recorded in the third quarter of 2022, which is non-deductible for
tax purposes and factored into the Company’s annualized effective
tax rate. The effective tax rate in the prior year period included
one-time discrete tax benefits of $152 million, principally
resulting from a tax accounting method change made in conjunction
with the Company’s 2020 U.S. federal income tax return. The
effective tax rates on a non-GAAP basis for these periods exclude
these impacts. The effective tax rate was 21.7% on a non-GAAP basis
compared to (33.2)% in the prior year period. Included in the
effective tax rate on a non-GAAP basis for the prior year period
was a discrete tax benefit related to the resolution of uncertain
tax positions.
Full Year 2022 Consolidated Results:
- Revenue decreased 1% to $9.024 billion compared to 2021
(increased 5% on a constant currency basis), inclusive of a 3%
negative impact consisting of (i) a 2% reduction resulting from the
Heritage Brands transaction (as defined under the heading “Non-GAAP
Exclusions”) and the exit from the Heritage Brands Retail business
and (ii) a 1% reduction resulting from the war in Ukraine.
- Tommy Hilfiger revenue decreased 1% compared to 2021
(increased 7% on a constant currency basis)
- Tommy Hilfiger International revenue decreased 4%
(increased 6% on a constant currency basis)
- Tommy Hilfiger North America revenue increased 9%
- Calvin Klein revenue increased 3% compared to 2021
(increased 10% on a constant currency basis)
- Calvin Klein International revenue increased 1%
(increased 10% on a constant currency basis)
- Calvin Klein North America revenue increased 8%
- Heritage Brands revenue decreased 26% compared to 2021,
and includes a 25% decrease resulting from the Heritage Brands
transaction and the exit from the Heritage Brands Retail
business.
- EBIT on a GAAP basis was $471 million, inclusive of a
$94 million negative impact due to foreign currency translation,
compared to $1.077 billion in 2021. These results include the
amounts for the applicable period described under the heading
“Non-GAAP Exclusions” later in this release. EBIT on a non-GAAP
basis for these periods exclude these amounts. EBIT on a non-GAAP
basis was $857 million, inclusive of a $94 million negative impact
due to foreign currency translation, compared to $983 million in
2021.
- EPS
- GAAP basis: $3.03 compared to $13.25 in 2021.
- Non-GAAP basis: $8.97 compared to $10.15 in 2021.
EPS on both a GAAP basis and non-GAAP basis
for 2022 included the negative impacts of (i) $1.09 per share
related to foreign currency translation and (ii) $0.58 per share
related to the war in Ukraine, apart from the one-time noncash
asset impairments recorded in the second quarter in connection with
the Company’s decision to exit from its Russia business discussed
under the heading “Non-GAAP Exclusions” later in this release.
EPS on a GAAP basis for these periods also
included the other amounts for the applicable period described
under the heading “Non-GAAP Exclusions” later in this release. EPS
on a non-GAAP basis excludes the one-time noncash impairments
recorded in the second quarter discussed above and these other
amounts.
- Interest expense decreased to $83 million from $104
million in 2021 primarily due to the impact of voluntary debt
repayments made in 2021.
- Effective tax rate was 48.4% on a GAAP basis as compared
to 2.1% in 2021. The effective tax rate was 23.3% on a non-GAAP
basis compared to 17.1% in 2021.
Stock Repurchase Program:
Delivering on its commitment under the PVH+ Plan to return
excess cash to stockholders, the Company repurchased 6.2 million
shares of its common stock for approximately $400 million during
2022.
2023 Outlook:
Full Year 2023 Guidance
- Revenue is projected to increase 3% to 4% as compared to
2022 (increase 2% to 3% on a constant currency basis), which
reflects a benefit of less than 1% from the 53rd week in 2023.
- Operating margin is projected to be approximately
10%.
- EPS is projected to be approximately $10.00 compared to
$3.03 on a GAAP basis and $8.97 on a non-GAAP basis in 2022. The
2023 EPS projection includes the estimated positive impact of
approximately $0.15 per share related to foreign currency
translation. EPS on a GAAP basis for 2022 included the amounts
described under the heading “Non-GAAP Exclusions” later in this
release. EPS on a non-GAAP basis excluded these amounts.
- Interest expense is projected to increase to
approximately $100 million compared to $83 million in 2022
primarily due to higher interest rates.
- Effective tax rate is projected to be approximately
24%.
First Quarter 2023 Guidance
- Revenue is projected to be relatively flat as compared
to the first quarter of 2022 (increase approximately 3% on a
constant currency basis).
- EPS is projected to be approximately $1.90 compared to
$1.94 in the first quarter of 2022. The first quarter 2023 EPS
projection includes the estimated negative impact of approximately
$0.10 per share related to foreign currency translation.
- Interest expense is projected to increase to
approximately $23 million compared to $22 million in the first
quarter of 2022.
- Effective tax rate is projected to be approximately
24%.
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 gain of $78 million recorded in the fourth quarter of
2022 related to the recognized actuarial gain on retirement
plans.
- Pre-tax noncash goodwill impairment charge of $417 million
recorded in the third quarter of 2022, which was non-operational
and driven by a significant increase in discount rates.
- Pre-tax costs of $20 million incurred in 2022, consisting of
severance related to initial actions 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, of which $17 million was
incurred in the third quarter and $4 million was incurred in the
fourth quarter.
- Pre-tax net costs of $43 million recorded in 2022 in connection
with the Company’s decision to exit from its Russia business,
primarily consisting of noncash asset impairments and a gain on
contract terminations, of which $50 million of charges were
recorded in the second quarter and an $8 million gain was recorded
in the fourth quarter.
- Pre-tax gain of $16 million recorded in the second quarter of
2022 in connection with the sale of the Company’s equity investment
in Karl Lagerfeld Holding B.V.
- Pre-tax gain of $49 million recorded in the fourth quarter of
2021 related to the recognized actuarial gain on retirement
plans.
- One-time discrete tax benefits of $152 million recorded in the
fourth quarter of 2021 principally resulting from a tax accounting
method change made in conjunction with the Company’s 2020 U.S.
federal income tax return.
- Pre-tax net gain of $113 million recorded in the third quarter
of 2021 in connection with the sale of certain intellectual
property and other assets of the Company’s Heritage Brands business
that closed on the first day of the third quarter of 2021 (the
“Heritage Brands transaction”), which includes a gain on the sale,
less costs to sell, a net gain on the Company’s retirement plans
associated with the transaction, and severance costs.
- Pre-tax costs of $48 million incurred in 2021 in connection
with actions announced in March 2021 to streamline the Company’s
organization through reductions in its workforce, primarily in
certain international markets, and to reduce its real estate
footprint, including reductions in office space and select store
closures, consisting of noncash asset impairments, severance, and
contract termination and other costs, of which $43 million was
incurred in the first quarter, $2 million was incurred in the
second quarter, and $2 million was incurred in the third
quarter.
- Pre-tax costs of $21 million incurred in 2021 in connection
with the exit from the Heritage Brands Retail business announced in
July 2020 that was substantially completed in the second quarter of
2021, consisting of severance and other termination benefits,
accelerated amortization of lease assets and contract termination
and other costs, of which $8 million was incurred in the first
quarter and $13 million was incurred in the second 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 8 and the section entitled
“Reconciliations of Constant Currency Revenue” 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 fourth
quarter earnings release on Tuesday, March 28, 2023 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, and the 2021 sale of assets of, and exit from, its
Heritage Brands 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 recent announcement that we intend to
bring in-house most of the product categories currently 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 seen 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; (vi)
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 has led to the Company’s
decision to exit from its Russia business, including the closure of
its retail stores 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 ongoing COVID-19
pandemic, which could result in (and, in the case of the COVID-19
pandemic, has resulted 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 (or, with
respect to the COVID-19 pandemic, could continue to 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’ value; (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
Year Ended
1/29/23
1/30/22
1/29/23
1/30/22
Net sales
$
2,362.5
$
2,313.7
$
8,544.9
$
8,723.7
Royalty revenue
98.3
92.1
372.0
340.1
Advertising and other revenue
27.9
23.9
107.3
90.9
Total revenue
$
2,488.7
$
2,429.7
$
9,024.2
$
9,154.7
Gross profit on net sales
$
1,264.3
$
1,300.3
$
4,643.6
$
4,893.1
Gross profit on royalty, advertising and
other revenue
126.2
116.0
479.3
431.0
Total gross profit
1,390.5
1,416.3
5,122.9
5,324.1
Selling, general and administrative
expenses
1,182.6
1,255.2
4,377.4
4,453.9
Goodwill impairment
417.1
Non-service related pension and
postretirement income
(81.7
)
(52.6
)
(91.9
)
(64.1
)
Other gain
(118.9
)
Equity in net income of unconsolidated
affiliates
7.8
9.6
50.4
23.7
Earnings before interest and taxes
297.4
223.3
470.7
1,076.9
Interest expense, net
21.6
23.9
82.5
104.2
Pre-tax income
275.8
199.4
388.2
972.7
Income tax expense (benefit)
137.1
(191.4
)
187.8
20.7
Net income
138.7
390.8
200.4
952.0
Less: Net loss attributable to redeemable
non-controlling interest (1)
(0.3
)
Net income attributable to PVH Corp.
$
138.7
$
390.8
$
200.4
$
952.3
Diluted net income per common share
attributable to PVH Corp. (2)
$
2.18
$
5.53
$
3.03
$
13.25
Quarter Ended
Year Ended
1/29/23
1/30/22
1/29/23
1/30/22
Depreciation and amortization expense
$
76.2
$
80.1
$
301.5
$
313.3
Please see following pages for
information related to non-GAAP measures discussed in this
release.
(1)
The Company and Arvind Limited
had a joint venture in Ethiopia in which the Company owned a 75%
interest until May 31, 2021. The Company, since May 31, 2021,
managed and effectively owned all economic interests in the joint
venture. The Company closed in the fourth quarter of 2021 the
manufacturing facility that was the joint venture’s sole
operation.
(2)
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 January 29, 2023 and January 30, 2022
on a non-GAAP basis by excluding (i) the recognized actuarial gains
on retirement plans in the fourth quarters of 2022 and 2021; (ii)
the net costs incurred in connection with the Company’s decision to
exit from its Russia business, including the closure of its retail
stores in Russia and the cessation of its wholesale operations in
Russia and Belarus, consisting of noncash asset impairments,
contract termination and other costs, and severance recorded in the
second quarter of 2022, partially offset by a gain on contract
terminations recorded in the fourth quarter of 2022; (iii) the gain
recorded in the second quarter of 2022 in connection with the sale
of the Company’s equity investment in Karl Lagerfeld Holding B.V.
(the “Karl Lagerfeld transaction”); (iv) the noncash goodwill
impairment charge recorded in the third quarter of 2022, which was
non-operational and driven by a significant increase in discount
rates; (v) the costs incurred in the third and fourth quarters of
2022 related to initial actions taken 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 of severance; (vi) the costs incurred in
the first, second and third quarters of 2021 in connection with
actions announced in March 2021 to streamline the Company’s
organization through reductions in its workforce, primarily in
certain international markets, and to reduce its real estate
footprint, including reductions in office space and select store
closures, consisting of noncash asset impairments, severance, and
contract termination and other costs; (vii) the costs incurred in
the first and second quarters of 2021 related to exiting the
Heritage Brands Retail business, consisting of severance and other
termination benefits, accelerated amortization of lease assets, and
contract termination and other costs; (viii) the gain recorded in
the third quarter of 2021 in connection with the sale of certain
intellectual property and other assets of the Company’s Heritage
Brands business that closed on the first day of the third quarter
of 2021 (the “Heritage Brands transaction”), which includes a gain
on the sale, less costs to sell, and a net gain on the Company’s
retirement plans associated with the transaction; (ix) the costs
incurred in the third quarter of 2021 in connection with the
Heritage Brands transaction, consisting of severance; (x) the tax
effects associated with the foregoing pre-tax items and (xi) the
one-time discrete tax benefits recorded in the fourth quarter of
2021 principally resulting from a tax accounting method change made
in conjunction with the Company’s 2020 U.S. federal income tax
return. 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.
PVH CORP. Non-GAAP Measures (continued) (In
millions, except per share data)
The following table presents the non-GAAP measures that are
discussed in this release. Please see Tables 1 through 8 for the
reconciliations of the GAAP amounts to amounts on a non-GAAP
basis.
Quarter Ended
Year Ended
1/29/23
1/30/22
1/29/23
1/30/22
Non-GAAP Measures
Selling, general and administrative
expenses (1)
$
1,186.6
$
4,314.2
$
4,379.7
Goodwill impairment (2)
—
Non-service related pension and
postretirement income (3)
(3.3
)
$
(3.9
)
(13.5
)
(15.4
)
Other gain (4)
—
Equity in net income of unconsolidated
affiliates (5)
34.3
Earnings before interest and taxes (6)
215.0
174.6
856.5
983.5
Income tax expense (benefit) (7)
42.0
(50.0
)
180.4
150.5
Net income attributable to PVH Corp.
(8)
151.4
200.7
593.6
729.1
Diluted net income per common share
attributable to PVH Corp. (9)
$
2.38
$
2.84
$
8.97
$
10.15
(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 goodwill impairment to goodwill impairment
on a non-GAAP basis.
(3)
Please see Table 5 for the
reconciliations of GAAP non-service related pension and
postretirement income to non-service related pension and
postretirement income on a non-GAAP basis.
(4)
Please see Table 6 for the
reconciliation of GAAP other gain to other gain on a non-GAAP
basis.
(5)
Please see Table 7 for the
reconciliation of GAAP equity in net income of unconsolidated
affiliates to equity in net income of unconsolidated affiliates on
a non-GAAP basis.
(6)
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.
(7)
Please see Table 8 for the
reconciliations of GAAP income tax expense (benefit) to income tax
expense (benefit) on a non-GAAP basis and an explanation of the
calculation of the tax effects associated with the pre-tax items
identified as non-GAAP exclusions.
(8)
Please see Table 1 for the
reconciliations of GAAP net income to net income on a non-GAAP
basis.
(9)
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
Year Ended
1/29/23
1/30/22
1/29/23
1/30/22
Net income attributable to PVH Corp.
$
138.7
$
390.8
$
200.4
$
952.3
Diluted net income per common share
attributable to PVH Corp. (1)
$
2.18
$
5.53
$
3.03
$
13.25
Pre-tax items excluded:
SG&A expenses associated with actions
to reduce the Company’s workforce, primarily in international
markets, and its real estate footprint
47.6
SG&A expenses associated with exiting
the Heritage Brands Retail business
21.1
SG&A expenses associated with the
Heritage Brands transaction
5.5
SG&A expenses associated with the
Company’s decision to exit from its Russia business
(7.5
)
43.0
SG&A expenses associated with the 2022
cost savings initiative
3.5
20.2
Goodwill impairment
417.1
Actuarial gain on retirement plans
(recorded in non-service related pension and postretirement
income)
(78.4
)
(48.7
)
(78.4
)
(48.7
)
Gain in connection with the Heritage
Brands transaction (recorded in other gain)
(118.9
)
Gain in connection with the Karl Lagerfeld
transaction (recorded in equity in net income of unconsolidated
affiliates)
(16.1
)
Tax effects of the pre-tax items above
(2)
95.1
10.7
7.4
22.3
One-time discrete tax benefits principally
resulting from a tax accounting method change made in conjunction
with the Company’s 2020 U.S. federal income tax return
(152.1
)
(152.1
)
Net income on a non-GAAP basis
attributable to PVH Corp.
$
151.4
$
200.7
$
593.6
$
729.1
Diluted net income per common share on a
non-GAAP basis attributable to PVH Corp. (1)
$
2.38
$
2.84
$
8.97
$
10.15
(1)
Please see Note A in Notes to the
Consolidated GAAP Statements of Operations for the reconciliation
of GAAP diluted net income per common share to diluted net income
per common share on a non-GAAP basis.
(2)
Please see Table 8 for an
explanation of the calculation of the tax effects of the above
items.
PVH CORP.
Reconciliations of GAAP to Non-GAAP
Amounts (continued)
(In millions, except per share
data)
Table 2 -
Reconciliations of GAAP earnings before interest and taxes to
earnings before interest and taxes on a non-GAAP basis
Quarter Ended
Year Ended
1/29/23
1/30/22
1/29/23
1/30/22
Earnings before interest and taxes
$
297.4
$
223.3
$
470.7
$
1,076.9
Items excluded:
SG&A expenses associated with actions
to reduce the Company’s workforce, primarily in international
markets, and its real estate footprint
47.6
SG&A expenses associated with exiting
the Heritage Brands Retail business
21.1
SG&A expenses associated with the
Heritage Brands transaction
5.5
SG&A expenses associated with the
Company’s decision to exit from its Russia business
(7.5
)
43.0
SG&A expenses associated with the 2022
cost savings initiative
3.5
20.2
Goodwill impairment
417.1
Actuarial gain on retirement plans
(recorded in non-service related pension and postretirement
income)
(78.4
)
(48.7
)
(78.4
)
(48.7
)
Gain in connection with the Heritage
Brands transaction (recorded in other gain)
(118.9
)
Gain in connection with the Karl Lagerfeld
transaction (recorded in equity in net income of unconsolidated
affiliates)
(16.1
)
Earnings before interest and taxes on a
non-GAAP basis
$
215.0
$
174.6
$
856.5
$
983.5
Table 3 -
Reconciliations of GAAP SG&A expenses to SG&A expenses on a
non-GAAP basis
Quarter Ended
Year Ended
1/29/23
1/29/23
1/30/22
SG&A expenses
$
1,182.6
$
4,377.4
$
4,453.9
Items excluded:
Expenses associated with actions to reduce
the Company’s workforce, primarily in international markets, and
its real estate footprint
(47.6
)
Expenses associated with exiting the
Heritage Brands Retail business
(21.1
)
Expenses associated with the Heritage
Brands transaction
(5.5
)
Expenses associated with the Company’s
decision to exit from its Russia business
7.5
(43.0
)
Expenses associated with the 2022 cost
savings initiative
(3.5
)
(20.2
)
SG&A expenses on a non-GAAP basis
$
1,186.6
$
4,314.2
$
4,379.7
PVH CORP.
Reconciliations of GAAP to Non-GAAP
Amounts (continued)
(In millions, except per share
data)
Table 4 -
Reconciliation of GAAP goodwill impairment to goodwill impairment
on a non-GAAP basis
Year Ended
1/29/23
Goodwill impairment
$
417.1
Item excluded:
Goodwill impairment
(417.1
)
Goodwill impairment on a non-GAAP
basis
$
—
Table 5 -
Reconciliations of GAAP non-service related pension and
postretirement income to non-service related pension and
postretirement income on a non-GAAP basis
Quarter Ended
Year Ended
1/29/23
1/30/22
1/29/23
1/30/22
Non-service related pension and
postretirement income
$
(81.7
)
$
(52.6
)
$
(91.9
)
$
(64.1
)
Item excluded:
Actuarial gain on retirement plans
78.4
48.7
78.4
48.7
Non-service related pension and
postretirement income on a non-GAAP basis
$
(3.3
)
$
(3.9
)
$
(13.5
)
$
(15.4
)
Table 6 -
Reconciliation of GAAP other gain to other gain on a non-GAAP
basis
Year Ended
1/30/22
Other gain
$
(118.9
)
Item excluded:
Gain in connection with the Heritage
Brands transaction
118.9
Other gain on a non-GAAP basis
$
—
PVH CORP.
Reconciliations of GAAP to Non-GAAP
Amounts (continued)
(In millions, except per share
data)
Table 7 -
Reconciliation of GAAP equity in net income of unconsolidated
affiliates to equity in net income of unconsolidated affiliates on
a non-GAAP basis
Year Ended
1/29/23
Equity in net income of unconsolidated
affiliates
$
50.4
Item excluded:
Gain in connection with the Karl Lagerfeld
transaction
(16.1
)
Equity in net income of unconsolidated
affiliates on a non-GAAP basis
$
34.3
Table 8 -
Reconciliations of GAAP income tax expense (benefit) to income tax
expense (benefit) on a non-GAAP basis
Quarter Ended
Year Ended
1/29/23
1/30/22
1/29/23
1/30/22
Income tax expense (benefit)
$
137.1
$
(191.4
)
$
187.8
$
20.7
Items excluded:
Tax effects of pre-tax items identified as
non-GAAP exclusions (1)
(95.1
)
(10.7
)
(7.4
)
(22.3
)
One-time discrete tax benefits principally
resulting from a tax accounting method change made in conjunction
with the Company’s 2020 U.S. federal income tax return
152.1
152.1
Income tax expense (benefit) on a non-GAAP
basis
$
42.0
$
(50.0
)
$
180.4
$
150.5
(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 evaluated each pre-tax 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.
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
1/29/23
1/30/22
GAAP
Non-GAAP
GAAP
Non-GAAP
Results
Adjustments (1)
Results
Results
Adjustments (2)
Results
Net income attributable to PVH Corp.
$
138.7
$
(12.7
)
$
151.4
$
390.8
$
190.1
$
200.7
Weighted average common shares
63.1
63.1
69.6
69.6
Weighted average dilutive securities
0.6
0.6
1.0
1.0
Total shares
63.7
63.7
70.6
70.6
Diluted net income per common share
attributable to PVH Corp.
$
2.18
$
2.38
$
5.53
$
2.84
Year Ended
Year Ended
1/29/23
1/30/22
GAAP
Non-GAAP
GAAP
Non-GAAP
Results
Adjustments (1)
Results
Results
Adjustments (2)
Results
Net income attributable to PVH Corp.
$
200.4
$
(393.2
)
$
593.6
$
952.3
$
223.2
$
729.1
Weighted average common shares
65.7
65.7
70.8
70.8
Weighted average dilutive securities
0.5
0.5
1.1
1.1
Total shares
66.2
66.2
71.9
71.9
Diluted net income per common share
attributable to PVH Corp.
$
3.03
$
8.97
$
13.25
$
10.15
(1)
Represents the impact on net
income in the periods ended January 29, 2023 from the elimination
of (i) the recognized actuarial gain on retirement plans, (ii) the
net costs related to the Company’s decision to exit from its Russia
business; (iii) the gain recorded in connection with the Karl
Lagerfeld transaction; (iv) the noncash goodwill impairment charge,
which was driven by a significant increase in discount rates; (v)
the costs related to the 2022 cost savings initiative; and (vi) the
tax effects associated with the foregoing pre-tax items. Please see
Table 1 for the reconciliation of GAAP net income to net income on
a non-GAAP basis.
(2)
Represents the impact on net
income in the periods ended January 30, 2022 from the elimination
of (i) the recognized actuarial gain on retirement plans, (ii) the
costs related to actions to reduce the Company’s workforce,
primarily in international markets, and its real estate footprint;
(iii) the costs related to exiting the Heritage Brands Retail
business; (iv) the gain recorded in connection with the Heritage
Brands transaction; (v) the costs related to the Heritage Brands
transaction; (vi) the tax effects associated with the foregoing
pre-tax items and (vii) the one-time discrete tax benefits
principally resulting from a tax accounting method change made in
conjunction with the Company’s 2020 U.S. federal income tax return.
Please see Table 1 for the reconciliation of GAAP net income to net
income on a non-GAAP basis.
PVH CORP.
Consolidated Balance Sheets
(In millions)
1/29/23
1/30/22
ASSETS
Current Assets:
Cash and Cash Equivalents
$
550.7
$
1,242.5
Receivables
945.2
765.3
Inventories
1,802.6
1,348.5
Other
281.9
297.4
Total Current Assets
3,580.4
3,653.7
Property, Plant and Equipment
904.0
906.1
Operating Lease Right-of-Use Assets
1,295.7
1,349.0
Goodwill and Other Intangible Assets
5,608.9
6,135.9
Other Assets
379.3
352.1
$
11,768.3
$
12,396.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable and Accrued Expenses
$
2,255.7
$
2,366.5
Current Portion of Operating Lease
Liabilities
353.7
375.4
Short-Term Borrowings
46.2
10.8
Current Portion of Long-Term Debt
111.9
34.8
Other Liabilities
671.1
788.5
Long-Term Portion of Operating Lease
Liabilities
1,140.0
1,214.4
Long-Term Debt
2,177.0
2,317.6
Stockholders’ Equity
5,012.7
5,288.8
$
11,768.3
$
12,396.8
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
1/29/23
1/30/22
Tommy Hilfiger North
America
Net sales
$
354.1
$
338.2
Royalty revenue
23.8
20.8
Advertising and other revenue
5.6
4.9
Total
383.5
363.9
Tommy Hilfiger
International
Net sales
936.4
914.5
Royalty revenue
15.6
14.3
Advertising and other revenue
5.6
4.1
Total
957.6
932.9
Total Tommy
Hilfiger
Net sales
1,290.5
1,252.7
Royalty revenue
39.4
35.1
Advertising and other revenue
11.2
9.0
Total
1,341.1
1,296.8
Calvin Klein North
America
Net sales
333.0
320.4
Royalty revenue
43.9
42.6
Advertising and other revenue
13.4
12.0
Total
390.3
375.0
Calvin Klein
International
Net sales
612.5
599.6
Royalty revenue
14.8
14.3
Advertising and other revenue
3.1
2.7
Total
630.4
616.6
Total Calvin
Klein
Net sales
945.5
920.0
Royalty revenue
58.7
56.9
Advertising and other revenue
16.5
14.7
Total
1,020.7
991.6
Heritage Brands
Wholesale
Net sales
126.5
141.0
Royalty revenue
0.2
0.1
Advertising and other revenue
0.2
0.2
Total
126.9
141.3
Total
Revenue
Net sales
2,362.5
2,313.7
Royalty revenue
98.3
92.1
Advertising and other revenue
27.9
23.9
Total
$
2,488.7
$
2,429.7
PVH CORP.
Segment Data (continued)
(In millions)
EARNINGS BEFORE
INTEREST AND TAXES BY SEGMENT
Quarter Ended
Quarter Ended
1/29/23
1/30/22
Results
Results
Under
Non-GAAP
Under
Non-GAAP
GAAP
Adjustments (1)
Results
GAAP
Adjustments (2)
Results
Tommy Hilfiger North America
$
9.4
$
(0.5
)
$
9.9
$
2.8
$
2.8
Tommy Hilfiger International
165.2
4.7
160.5
143.5
143.5
Total Tommy Hilfiger
174.6
4.2
170.4
146.3
146.3
Calvin Klein North America
24.5
(0.6
)
25.1
18.6
18.6
Calvin Klein International
65.0
1.6
63.4
71.4
71.4
Total Calvin Klein
89.5
1.0
88.5
90.0
90.0
Heritage Brands Wholesale
9.9
(0.4
)
10.3
0.8
0.8
Corporate
23.4
77.6
(54.2
)
(13.8
)
$
48.7
(62.5
)
Total earnings before interest and
taxes
$
297.4
$
82.4
$
215.0
$
223.3
$
48.7
$
174.6
(1)
The adjustments for the quarter
ended January 29, 2023 represent the elimination of (i) the
recognized actuarial gain on retirement plans; (ii) the gain on
contract terminations related to the Company’s decision to exit
from its Russia business; and (iii) the costs related to the 2022
cost savings initiative.
(2)
The adjustment for the quarter
ended January 30, 2022 represents the elimination of the recognized
actuarial gain on retirement plans.
PVH CORP.
Segment Data (continued)
(In millions)
REVENUE BY
SEGMENT
Year Ended
Year Ended
1/29/23
1/30/22
Tommy Hilfiger North
America
Net sales
$
1,185.0
$
1,086.0
Royalty revenue
86.0
79.0
Advertising and other revenue
21.7
19.8
Total
1,292.7
1,184.8
Tommy Hilfiger
International
Net sales
3,282.1
3,446.6
Royalty revenue
61.9
56.8
Advertising and other revenue
20.7
15.5
Total
3,364.7
3,518.9
Total Tommy
Hilfiger
Net sales
4,467.1
4,532.6
Royalty revenue
147.9
135.8
Advertising and other revenue
42.4
35.3
Total
4,657.4
4,703.7
Calvin Klein North
America
Net sales
1,205.6
1,129.5
Royalty revenue
170.1
145.6
Advertising and other revenue
54.7
46.6
Total
1,430.4
1,321.7
Calvin Klein
International
Net sales
2,290.3
2,283.1
Royalty revenue
53.1
48.3
Advertising and other revenue
9.6
7.2
Total
2,353.0
2,338.6
Total Calvin
Klein
Net sales
3,495.9
3,412.6
Royalty revenue
223.2
193.9
Advertising and other revenue
64.3
53.8
Total
3,783.4
3,660.3
Heritage Brands
Wholesale
Net sales
581.9
702.9
Royalty revenue
0.9
10.4
Advertising and other revenue
0.6
1.8
Total
583.4
715.1
Heritage Brands
Retail
Net sales
75.6
Royalty revenue
Advertising and other revenue
Total
75.6
Total Heritage
Brands
Net sales
581.9
778.5
Royalty revenue
0.9
10.4
Advertising and other revenue
0.6
1.8
Total
583.4
790.7
Total
Revenue
Net sales
8,544.9
8,723.7
Royalty revenue
372.0
340.1
Advertising and other revenue
107.3
90.9
Total
$
9,024.2
$
9,154.7
PVH CORP.
Segment Data (continued)
(In millions)
EARNINGS BEFORE
INTEREST AND TAXES BY SEGMENT
Year Ended
Year Ended
1/29/23
1/30/22
Results
Results
Under
Non-GAAP
Under
Non-GAAP
GAAP
Adjustments (1)
Results
GAAP
Adjustments (2)
Results
Tommy Hilfiger North America
$
(175.4
)
$
(181.9
)
$
6.5
$
21.2
$
(1.7
)
$
22.9
Tommy Hilfiger International
514.8
(34.1
)
548.9
654.2
(8.9
)
663.1
Total Tommy Hilfiger
339.4
(216.0
)
555.4
675.4
(10.6
)
686.0
Calvin Klein North America
(81.9
)
(167.2
)
85.3
78.0
(2.1
)
80.1
Calvin Klein International
252.6
(92.2
)
344.8
377.6
(6.4
)
384.0
Total Calvin Klein
170.7
(259.4
)
430.1
455.6
(8.5
)
464.1
Heritage Brands Wholesale
47.4
(2.6
)
50.0
160.9
113.4
47.5
Heritage Brands Retail
(33.9
)
(21.1
)
(12.8
)
Total Heritage Brands
47.4
(2.6
)
50.0
127.0
92.3
34.7
Corporate
(86.8
)
92.2
(179.0
)
(181.1
)
20.2
(201.3
)
Total earnings before interest and
taxes
$
470.7
$
(385.8
)
$
856.5
$
1,076.9
$
93.4
$
983.5
(1)
The adjustments for the year
ended January 29, 2023 represent the elimination of (i) the
recognized actuarial gain on retirement plans; (ii) the net costs
related to the Company’s decision to exit from its Russia business;
(iii) the gain recorded in connection with the Karl Lagerfeld
transaction; (iv) the noncash goodwill impairment charge, which was
driven by a significant increase in discount rates; and (v) the
costs related to the 2022 cost savings initiative.
(2)
The adjustments for the year
ended January 30, 2022 represent the elimination of (i) the
recognized actuarial gain on retirement plans; (ii) the costs
related to actions to reduce the Company’s workforce, primarily in
international markets, and its real estate footprint; (iii) the
costs related to exiting the Heritage Brands Retail business; (iv)
the gain recorded in connection with the Heritage Brands
transaction; and (v) the costs related to the Heritage Brands
transaction.
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.
Reconciliations
of 2022 Constant Currency Revenue
GAAP Revenue
% Change
Quarter Ended
GAAP
Negative Impact of
Foreign Exchange
Constant
Currency
1/29/23
1/30/22
Tommy Hilfiger International
$
957.6
$
932.9
2.6
%
(8.7
)%
11.3
%
Total Tommy Hilfiger
1,341.1
1,296.8
3.4
%
(6.5
)%
9.9
%
Calvin Klein International
630.4
616.6
2.2
%
(7.8
)%
10.0
%
Total Calvin Klein
1,020.7
991.6
2.9
%
(5.1
)%
8.0
%
Total Revenue
$
2,488.7
$
2,429.7
2.4
%
(5.6
)%
8.0
%
Total Direct-to-Consumer
$
1,254.7
$
1,209.1
3.8
%
(6.2
)%
10.0
%
Wholesale
$
1,107.8
$
1,104.6
0.3
%
(5.6
)%
5.9
%
Total Digital
$
521.7
$
569.9
(8.5
)%
(6.1
)%
(2.4
)%
GAAP Revenue
% Change
Year Ended
GAAP
Negative Impact of
Foreign Exchange
Constant
Currency
1/29/23
1/30/22
Tommy Hilfiger International
$
3,364.7
$
3,518.9
(4.4
)%
(10.8
)%
6.4
%
Total Tommy Hilfiger
4,657.4
4,703.7
(1.0
)%
(8.2
)%
7.2
%
Calvin Klein International
2,353.0
2,338.6
0.6
%
(9.7
)%
10.3
%
Total Calvin Klein
3,783.4
3,660.3
3.4
%
(6.3
)%
9.7
%
Total Revenue
$
9,024.2
$
9,154.7
(1.4
)%
(6.8
)%
5.4
%
PVH CORP.
Reconciliations of Constant Currency
Revenue (continued)
Reconciliations
of 2023 Constant Currency Revenue
Full Year
2023
(Estimated)
First Quarter
2023
(Estimated)
GAAP revenue increase
3% to 4%
—%
Positive (negative) impact of foreign
exchange
1%
(3)%
Non-GAAP revenue increase on a constant
currency basis
2% to 3%
3%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230327005563/en/
Sheryl Freeman (212) 381-3980
investorrelations@pvh.com
PVH (NYSE:PVH)
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