PVH Corp reported second-quarter revenue of $2.097 billion, representing a 3% decline from $2.167 billion in the prior year. Gross margin expanded 530 basis points to 63.0% from 57.7%, though approximately 510 basis points of that improvement originated from $107 million in tariff refunds, indicating limited underlying margin growth.
The remaining 20-basis-point margin improvement reflected lower product costs, favorable foreign exchange, and advantageous product mix, partially offset by increased promotional activity in Europe, the Middle East and Africa, higher tariff costs following mitigation efforts, and North American license transitions. The company also recorded a $439 million pre-tax noncash goodwill impairment driven by revised valuation assumptions related to geopolitical and macroeconomic factors, causing GAAP operating margin to decline to negative 9.1% from positive 6.1%.
Direct-to-consumer revenue remained approximately flat, with owned and operated digital-commerce revenue increasing 4% across both Calvin Klein and Tommy Hilfiger. Inventory declined 3% to $1.738 billion. However, wholesale revenue declined 6% across all regions, Calvin Klein revenue fell 7%, and EMEA revenue decreased 6%. Tommy Hilfiger revenue was approximately flat, benefiting from a three-percentage-point contribution from bringing previously licensed women’s product categories in-house.
PVH reaffirmed its full-year outlook, projecting approximately flat revenue, company-defined non-GAAP operating margin of approximately 8.8%, and non-GAAP earnings per share of $11.80 to $12.10. Company-defined non-GAAP operating margin reached 11.1% for the quarter, up from 8.2%, but excluding the tariff-refund benefit, the refund-excluded margin approximated 6.0%, below the prior-year level. The goodwill impairment, combined with wholesale and Calvin Klein weakness, pointed to an incomplete turnaround in the core business.
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