PVH Corp. Q3 FY2024 earnings call

• Disciplined execution of PVH+ plan, with Fall '24 product season showing double-digit sell-through improvements across brands, regions, and channels.
• Strong marketing campaigns for Calvin Klein (e.g., Jeremy Allen White, Greta Lee, etc.) and Tommy Hilfiger (e.g., New York Fashion Week presence, Sofia Richie campaign).
• North America saw 13% EBIT margin (fifth consecutive quarter of double-digit EBIT margin), with Donald Kohler promoted to CEO of PVH Americas.
• International Europe improved due to quality of sales initiative, with double-digit sell-outs in Fall '24 product.
• Asia Pacific had mid-single digit growth on reported basis, driven by Japan and China's 11/11 activation.

Calvin Klein: Drove strong category offense with cultural marketing campaigns, saw double-digit sell-through improvements in Fall '24 product season across brands, regions, and channels. Tommy Hilfiger: Ranked number one at New York Fashion Week, engaged with global talents, and had a holiday campaign with Sofia Richie and Damson Idris. North America: Combined Calvin and Tommy businesses had 13% EBIT margin (fifth consecutive quarter of double-digit EBIT margin), D2C store revenue declined but e-commerce grew double-digits, Fall '24 product up double-digits, Donald Kohler promoted to CEO of PVH Americas. International (Europe): Revenue declined but improved due to quality of sales initiative, Fall '24 product had double-digit sell-outs, new member suite successful, Fredrik Olsson new CEO of Europe. Asia Pacific: Mid-single digit growth on reported basis, low-single digit growth in constant currency, driven by Japan and China's 11/11 activation, new brand ambassadors for both brands.

• Reaffirmed full-year revenue and non-GAAP EBIT margin guidance, narrowed EPS guidance to $11.55 to $11.70 due to exchange rate shifts.
• Expect to return to modest growth in 2025 and move towards 15% operating margin target.
• Fourth quarter revenue projected to decline 4%-5% constant currency, 6%-7% reported; gross margin to decline 200 basis points.

• Risks include changes in strategies, ability to realize benefits from divestitures/restructurings.
• Impact of ongoing investigation by China's Ministry of Commerce.

Q: Could you elaborate on customer demand for fall product assortments and lead indicators for global wholesale orders?

A: Fall '24 product season was first to fully influence product execution, double-digit sell-through improvements in both brands, regions, and channels; D2C trends up from August to September, wholesale in Europe had double-digit sell-through increases.

Q: Help us double-click on the fourth quarter gross margin guidance?

A: 4Q gross margin to decline 200 basis points due to more promotional holiday season in U.S., modest freight increases, and timing effect of North America wholesale mix.

Q: Elaborate on inventory, essential products, and being in stock 95% of the time?

A: Better inventory composition with more new and less old inventory, aim to have style icons like Oxford shirts at 95% in stock to optimize profitable sell-through.

Q: Progress in North America and promotional activity?

A: North America had 13% EBIT margin, held own in tough macro; holiday started earlier leading to more promotional pressure, but better inventory composition.

Q: Licensing impact for next year and growth outlook?

A: Bringing back women's product in-house in North America for long-term strength; ~20% of women's wholesale licensing portfolio to come back in 2025, focus on organic growth.