PVH (PVH) Q2 2025 earnings summary

Executive summary

• Q2 2024 revenue was $2.074 billion, down 6% year-over-year, mainly due to the Heritage Brands intimates divestiture and negative FX impacts, but profitability and EPS exceeded guidance, driven by significant gross margin expansion and improved inventory productivity.

• Net income for Q2 2024 rose to $158 million from $94 million in Q2 2023, with EPS on a GAAP basis at $2.80 and non-GAAP at $3.01, both exceeding guidance due to a $0.55/share tax benefit from a favorable audit settlement.

• Gross margin improved to 60.1% from 57.6% year-over-year, reflecting lower product costs, a favorable shift in revenue mix, and more full-priced selling.

• North America delivered high-quality growth and significant margin expansion, while Europe executed targeted quality of sales actions, and Asia Pacific saw strong consumer engagement despite macro headwinds.

• SG&A expenses increased as a percentage of revenue due to deleveraging from lower sales and costs related to restructuring and cost-saving initiatives.

Financial highlights

• Q2 2024 revenue: $2.074 billion (down 6% year-over-year), including a 3% decline from the Heritage Intimates business sale and a 1% negative FX impact.

• Q2 2024 net income: $158 million (up from $94 million); diluted EPS: $2.80 GAAP, $3.01 non-GAAP, both including a $0.55/share tax benefit.

• Gross margin for Q2 2024: 60.1%, up 250 basis points year-over-year.

• Operating margin: 9.1% for Q2, up 80 basis points year-over-year; EBIT for the quarter was $189 million, up from $182 million last year.

• Inventory at quarter end was down 12% year-over-year; interest expense fell to $19 million from $24 million.

Outlook and guidance

• Full-year 2024 revenue expected to decrease 6–7% year-over-year, mainly due to business divestitures and European wholesale softness.

• Gross margin for 2024 projected to increase by 150 basis points to an all-time high; SG&A as a percent of revenue expected to rise by 130–150 basis points due to deleveraging and restructuring costs.

• Full-year GAAP EPS guidance raised to $11.20–$11.45; non-GAAP EPS to $11.55–$11.80, reflecting a favorable tax settlement.

• Interest expense projected at ~$70 million; effective tax rate for 2024 expected at 16%.

• Committed to $400 million in share buybacks for 2024; capital expenditures expected at $225 million.