PVH Shares Slide After Q3 Beat but No Outlook Raise

PVH Corp. (PVH) dropped 12% to $77 in midday trading Thursday after the company reported better-than-expected Q3 earnings yet did not raise its full-year outlook. Investors interpreted the move as a sign that growth will remain uneven across the next two quarters.

Needham analyst Tom Nikic summarized investor frustration:

“PVH shares look cheap, but they sure aren’t making it easy for value investors to step in… Trends continue to be very volatile.”

Revenue Trends Mixed Across Regions

PVH reported:

Q3 revenue: $2.3B, up 2%, and down less than 1% in constant currency
Full-year revenue outlook: flat to slightly positive in constant currency

However, the Europe, Middle East & Africa (EMEA) division created concern:

EMEA revenue down 2% in constant currency
Analysts had expected the region to fuel growth following last year’s reset

Nikic also pointed to a gross margin miss, which declined:

200 bps year over year
25 bps below guidance
Driven by:
110 bps impact from tariffs
50 bps impact from bringing certain licenses in-house
Higher promotions due to Calvin Klein product shipment delays

Operational Growing Pains From License Take-Back

PVH continues taking back North American wholesale licenses from G-III Apparel Group, consolidating operations and reassigning categories such as dresses.

As part of the strategy, the company created a global product kitchen for Calvin Klein in New York—a complex transition that led to uneven execution.

CEO Stefan Larsson acknowledged setbacks:

Shipment delays strained the European distribution center, impacting full-price selling windows for both Calvin Klein and Tommy Hilfiger
The transition caused “a few critical weeks” of lost sales

But Larsson stressed that the foundation is now in place:

“It’s painful now, but we had to do it… Now you start to see it.”

Analysts Say Brand Strategy Looks Promising, but Patience Is Required

JPMorgan analyst Matthew Boss noted that the new leadership team is building brand desirability through:

Better product design
Improved marketing
Stronger brand elevation strategy

However, he warned of a longer path toward PVH’s mid-teens operating margin goal, citing:

Slower-than-expected top-line recovery
Global macroeconomic pressure
Heavy promotional competition
FX headwinds

For this year, PVH expects:

Adjusted operating margin: ~8.5%