PVH exceeds third quarter expectations despite profit decline

US fashion group PVH Corporation (PVH Corp) exceeded management targets in the third quarter of the 2025/26 financial year. Consequently, the parent company of Calvin Klein and Tommy Hilfiger adjusted its annual forecasts on Wednesday evening.

In the latest quarter, which ended on November 2, group revenue reached approximately 2.29 billion dollars. This exceeded the corresponding prior-year level by 1.7 percent. Adjusted for exchange rate changes, revenues fell by 0.8 percent. This figure was above the company's expectations.

Both core brands achieve sales growth

Both core brands contributed to growth. Tommy Hilfiger quarterly sales rose by 1.4 percent (currency-adjusted down 1.6 percent) to just under 1.22 billion dollars. According to the company, this was due to higher demand for products in key lifestyle areas.

Calvin Klein achieved an increase of 2.4 percent (currency-adjusted up 0.4 percent) thanks to growth in core categories such as underwear and denim, reaching 1.02 billion dollars. Revenue from the group's smaller labels totalled 58.4 million dollars. This represented a decline of 3.2 percent compared to the same period last year.

Higher tariffs weigh on earnings

The group's gross margin fell year-over-year from 58.4 to 56.3 percent. PVH Corp attributed this to higher import tariffs in the US, increased freight costs and more extensive discounts.

Earnings before interest and taxes (EBIT) therefore fell by 1.3 percent to 180.8 million dollars compared to the prior-year quarter. Reported net income slid from 131.9 to 4.2 million dollars due to higher tax burdens.

Adjusted for special items, quarterly net income fell by 20.6 percent to 135.4 million dollars. Adjusted earnings per share shrank from 3.03 to 2.83 dollars. This figure was significantly above the company's forecast, which had projected 2.35 to 2.50 dollars.

Management clarifies annual forecasts

Given the recent results and the fact that the start of the Christmas trading period went “according to plan”, management forecasted revenue growth in the low single-digit percentage range for the year ahead. Previously, flat or slightly improved revenues had been projected.

The target range for adjusted earnings per share, which had previously been between 10.75 and 11.00 dollars, was narrowed to 10.85 to 11.00 dollars.

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