PVH Tops Q4 Estimates, Looks to Bad Bunny for a Boost

Yahoo

31-03-2025

Stefan Larsson exceeded his mark for the fourth quarter at PVH Corp. — with sales and profits that topped expectations and were warmly greeted on Wall Street.
Shares of the company shot up 16.6 percent to $75.38 in after-hours trading on Monday.
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Now the chief executive officer is looking for Bad Bunny to help take the company higher as it navigates an especially tricky regulatory and consumer environment.
Larsson has been on a multiyear journey to remake the Calvin Klein and Tommy Hilfiger parent with his PVH+ strategic plan. That plan touches every part of the company, but can be seen clearly in Calvin Klein's latest tie-up with rapper, singer and record producer Bad Bunny.
'What you see now from us in Calvin Klein with the Bad Bunny campaign is really exciting,' Larsson said in an interview. 'We lean into the strongest category in Calvin Klein — Calvin Klein men's underwear. We put an enormous amount of innovation into the existing hero product.'
That includes the introduction of the company's new Icon Cotton Stretch, updates to the fit and the 'infinity waistband' that has no stitching.
'We continued that in a cut-through campaign with Bad Bunny, one of the most-streamed artists on Spotify,' Larsson said. 'That creates cultural connection. You have us leaning into the category strongly, reinventing a hero product, connecting it to a breakthrough campaign.'
The CEO called the collective impact of that 'massive.'
When the campaign launched on Calvin Klein's Instagram this month, it reached more than 29 million users in the first 48 hours and added nearly 100,000 followers in the first week.
That echoed Jeremy Allen White's attention-grabbing turn in his Calvins last year.
Tommy Hilfiger has also been busy, recently launching The Hilfiger Resort, a summer event on the Caribbean island of Canouan with Patrick Schwarzenegger, Madelyn Cline and Abby Champion. The launch garnered 160 million impressions in just 72 hours.
'We really tapped both brands into the zeitgeist,' Larsson said.
PVH is living in the moment, but that doesn't mean the moment is necessarily easy.
'We had a strong [fourth quarter], strong holiday, in February we saw it slow down, especially in North America,' the CEO said. 'And then it stabilized in March and came back a little bit.'
Easter will be telling.
For PVH, fourth-quarter net income fell 42.2 percent to $157.2 million, or $2.83 a diluted share, from $241.8 million, or $4.55, a year earlier.
But analysts were looking at adjusted earnings per share, which came in at $3.27 — 6 cents ahead of the $3.21 analysts forecast.
Revenues for the quarter ended Feb. 2 fell 5 percent to $2.4 billion — a 2 percent drop in constant currencies. The result included a 3 percent decline attributed to an extra week in the year-ago quarter.
That put the top line above the $2.3 billion analysts were expecting.
The global Calvin Klein business rose 1 percent in constant currencies while Tommy Hilfiger decreased by 3 percent in the quarter.
'It's definitely a tough moment for retail in general,' Larsson said. 'I believe it's a really good moment for us, having two of the most iconic and beloved brands and step-by-step, month-by-month, quarter-by-quarter building more relevance into those brands. It puts us on a trajectory to where we set out to go.
'We are focusing on what's within our control,' he said.
Larsson said the tariffs that U.S. President Donald Trump has imposed so far would not have a big impact of PVH's business and are planned for in the company's guidance.
For this year, PVH projected that adjusted profits per share would rise to $12.40 to $12.75, from $11.74 last year. That's well ahead of the $11.56 analysts projected.
Revenues are projected to be flat to slightly up for 2025.
The company also plans to give something back to shareholders through an additional $500 million in share repurchases this year.
One big question mark is the company's back and forth with the Chinese government, a topic the CEO plans to address on a conference call with analysts on Tuesday.
China's Ministry of Commerce made a preliminary determination in January that PVH engaged in improper practices related to the Xinjiang region, although the impact of that ruling is still not clear.
In 2021, PVH stopped working with factories that used cotton from Xinjiang, where more than a million Uyghurs and other Turkic Muslims are alleged to be under internment, with some forced to work.
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