PVH Corp. Reports Decline in Revenue, Increase in Profitability Amid Ongoing Transformation Efforts

PVH Corp. reported its financial results for the thirteen and twenty-six weeks ended August 4, 2024, showing a decline in net sales and total revenue compared to the same periods in the previous year. For the thirteen weeks, net sales were $1,965.1 million, down from $2,105.2 million in 2023, while total revenue decreased to $2,074.3 million from $2,207.0 million. For the twenty-six weeks, net sales were $3,815.3 million, a decrease from $4,156.3 million, and total revenue fell to $4,026.2 million from $4,364.9 million.

Despite the revenue decline, the company experienced an increase in profitability. Net income for the thirteen weeks ended August 4, 2024, was $158.0 million, significantly higher than $94.2 million in the prior year. For the twenty-six weeks, net income rose to $309.4 million from $230.2 million. Basic net income per share also improved, reaching $2.83 for the thirteen weeks and $5.46 for the twenty-six weeks, compared to $1.52 and $3.69, respectively, in the previous year.

The decrease in revenue was attributed to several factors, including a significant decline in the Heritage Brands Wholesale segment, which saw a 60% drop in revenue for the second quarter, primarily due to the sale of its women's intimates businesses. The company completed this sale on November 27, 2023, for net proceeds of $156 million, resulting in a pre-tax gain of $13 million recorded in Q4 2023.

PVH Corp. is also undergoing a multi-year initiative, the PVH+ Plan, aimed at driving efficiencies and investing in growth, with expected annual cost savings of $200 million to $300 million by 2026. The company recorded pre-tax costs of $15.3 million related to this initiative during the reporting period, with additional costs anticipated.

Cash and cash equivalents as of August 4, 2024, stood at $610.0 million, a decrease from $708.0 million at the beginning of the fiscal year. The company reported cash provided by operating activities of $225.7 million for the twenty-six weeks, up from $196.2 million in the prior year.

PVH Corp. continues to manage its capital structure effectively, with total long-term debt of $2,179.0 million as of August 4, 2024. The company remains in compliance with all financial covenants and has a positive outlook from credit rating agencies. The effective income tax rate for the periods ended August 4, 2024, was notably lower at 9.6% compared to 22.4% in the previous year, primarily due to favorable changes in uncertain tax positions.