- First quarter revenue increased 2% to $2.158 billion compared
to the prior year period (increased 5% on a constant currency
basis) and exceeded guidance of relatively flat to the prior year
period (increase approximately 3% on a constant currency
basis)
- First quarter EPS of $2.14 exceeded guidance of
approximately $1.90
- Full year outlook
- Revenue: Reaffirms projected increase of 3% to 4%
(increase 2% to 3% on a constant currency basis)
- Operating margin: Reaffirms outlook approximately 10%
- EPS: Reaffirms outlook of approximately $10.00
PVH Corp. [NYSE: PVH] today reported its 2023 first quarter
results and reaffirmed its full year outlook.
Stefan Larsson, Chief Executive Officer, commented, “We
delivered a strong start to the year with first quarter performance
ahead of our guidance for both revenue and earnings, driven by our
disciplined execution of the PVH+ Plan. We are reaffirming our
guidance for the year, reflecting the confidence we have in our
ability to continue to deliver on our near-term commitments, while
maintaining a strong focus on our long-term vision to build Calvin
Klein and TOMMY HILFIGER into the most desirable lifestyle brands
in the world, and position PVH as one of the best performing brand
groups in our sector.”
Mr. Larsson, added, “We are gaining good traction for both
brands in all regions, driven by our focus on the key growth
drivers of our multi-year PVH+ Plan: winning with product, winning
with consumer engagement, winning in the digitally-led marketplace,
building a demand- and data-driven operating model, and investing
in growth while driving cost efficiencies.”
Zac Coughlin, Chief Financial Officer, said, “We drove strong
first quarter results which included mid-single-digit constant
currency revenue growth and double-digit EPS growth. We have
growing confidence in our execution of the PVH+ Plan and our full
year outlook. As such, we are making strategic investments to drive
our multi-year brand-led growth in important areas such as
marketing. We are well positioned to achieve double-digit EPS
growth in 2023, while at the same time, we expect to generate
significant cash flow.”
Non-GAAP Amounts: Amounts stated to be on a non-GAAP
basis exclude the items that are defined or described in greater
detail near the end of this release under the heading “Non-GAAP
Exclusions.” Amounts stated on a constant currency basis also are
deemed to be on a non-GAAP basis. Reconciliations of amounts on a
GAAP basis to amounts on a non-GAAP basis are presented after the
Non-GAAP Exclusions section and identify and quantify all excluded
items.
First Quarter Review:
- Revenue increased 2% compared to the prior year period
(increased 5% on a constant currency basis). The Company’s revenue
growth was driven by solid performance in its international
businesses, particularly in the Asia Pacific region, including 44%
growth in local currency in China following the lifting of COVID
restrictions in the fourth quarter of 2022, and continued growth in
Europe in euros. The increase also reflected strong growth in the
North America direct-to-consumer business.
- Direct-to-consumer revenue increased 8% compared to the
prior year period (increased 12% on a constant currency basis),
with strong growth in both the Company’s owned and operated stores
and owned and operated digital commerce business.
- Wholesale revenue decreased 2% compared to the prior
year period (increased 1% on a constant currency basis).
- Owned and operated digital commerce revenue increased 4%
compared to the prior year period (increased 8% on a constant
currency basis). Total digital revenue decreased 3% compared
to the prior year period (decreased 1% on a constant currency
basis). The strong growth in the Company’s owned and operated
digital commerce business was more than offset by a decrease in
wholesale sales to the Company’s wholesale.com and pure play
customers. Digital penetration as a percentage of total revenue was
approximately 20%.
- Gross margin was 57.9% compared to 58.4% in the prior
year period. The benefits from price increases, lower freight
costs, and a favorable shift in regional and channel mix were more
than offset by higher product costs, including an approximately 150
basis point negative impact on inventory costs due to foreign
currency exchange rates.
- Inventory levels have decreased compared to the fourth
quarter of 2022, with improvement in all regions. Inventory was 24%
higher than the prior year’s first quarter due to a combination of
(i) abnormally low inventory levels in the prior year period, (ii)
early receipts of inventory, and (iii) higher product costs.
First Quarter Consolidated Results:
- Revenue increased 2% to $2.158 billion compared to the
prior year period (increased 5% on a constant currency basis).
- Tommy Hilfiger revenue increased 5% compared to the
prior year period (increased 8% on a constant currency basis)
- Tommy Hilfiger International revenue increased 3%
(increased 7% on a constant currency basis)
- Tommy Hilfiger North America revenue increased 11%
- Calvin Klein revenue was flat compared to the prior year
period (increased 3% on a constant currency basis)
- Calvin Klein International revenue increased 7%
(increased 11% on a constant currency basis)
- Calvin Klein North America revenue decreased 12%.
Continued growth in the direct-to-consumer business was more than
offset by a decrease in the wholesale business.
- Heritage Brands revenue decreased 12% compared to the
prior year period
- Earnings before interest and taxes (“EBIT”) was $199
million, inclusive of a $9 million negative impact due to foreign
currency translation, compared to $210 million in the prior year
period. The revenue growth on a constant currency basis was offset
by lower gross margins, including the approximately 150 basis point
negative impact on inventory costs due to foreign currency exchange
rates, discussed above. The Company continues to take a disciplined
approach to managing expenses, driving cost efficiencies while
making targeted investments to drive its strategic
initiatives.
- Earnings per share (“EPS”) was $2.14, a 10% increase
compared to $1.94 in the prior year period. EPS for the first
quarter included the negative impact of $0.11 per share related to
foreign currency translation.
- Interest expense of $22 million was flat as compared to
the prior year period.
- Effective tax rate was 23.1% as compared to 29.4% in the
prior year period.
2023 Outlook: Full Year 2023
Guidance
- Revenue is projected to increase 3% to 4% as compared to
2022 (increase 2% to 3% on a constant currency basis).
- Operating margin is projected to be approximately
10%.
- EPS is projected to be approximately $10.00 compared to
$3.03 on a GAAP basis and $8.97 on a non-GAAP basis in 2022. The
2023 EPS projection includes the estimated positive impact of
approximately $0.15 per share related to foreign currency
translation. EPS on a GAAP basis for 2022 included the amounts
described under the heading “Non-GAAP Exclusions” later in this
release. EPS on a non-GAAP basis excluded these amounts.
- Interest expense is projected to increase to
approximately $100 million compared to $83 million in 2022
primarily due to higher interest rates.
- Effective tax rate is projected to be approximately
24%.
Second Quarter 2023 Guidance
- Revenue is projected to increase low single-digits as
compared to the second quarter of 2022.
- EPS is projected to be approximately $1.70 compared to
$1.72 on a GAAP basis and $2.08 on a non-GAAP basis in the second
quarter of 2022. The second quarter 2023 EPS projection includes
the estimated positive impact of approximately $0.05 per share
related to foreign currency translation. EPS on a GAAP basis for
the second quarter of 2022 included the amounts described under the
heading “Non-GAAP Exclusions” later in this release. EPS on a
non-GAAP basis excluded these amounts.
- Interest expense is projected to increase to
approximately $25 million compared to $20 million in the second
quarter of 2022.
- Effective tax rate is projected to be approximately
26%.
Please see the section entitled “Full Year and Quarterly
Reconciliations of GAAP to Non-GAAP Amounts” at the end of this
release for further detail and reconciliations of GAAP to non-GAAP
amounts discussed in this section.
Non-GAAP Exclusions: The discussions in this release that
refer to non-GAAP amounts exclude the following:
- Pre-tax gain of $78 million recorded in the fourth quarter of
2022 related to the recognized actuarial gain on retirement
plans.
- Pre-tax noncash goodwill impairment charge of $417 million
recorded in the third quarter of 2022, which was non-operational
and driven by a significant increase in discount rates.
- Pre-tax costs of $20 million incurred in 2022, consisting of
severance related to initial actions under the plans announced in
August 2022 to reduce people costs in the Company’s global offices
by approximately 10% by the end of 2023, of which $17 million was
incurred in the third quarter and $4 million was incurred in the
fourth quarter.
- Pre-tax net costs of $43 million recorded in 2022 in connection
with the Company’s decision to exit from its Russia business,
primarily consisting of noncash asset impairments and a gain on
contract terminations, of which $50 million of charges were
recorded in the second quarter and an $8 million gain was recorded
in the fourth quarter.
- Pre-tax gain of $16 million recorded in the second quarter of
2022 in connection with the sale of the Company’s equity investment
in Karl Lagerfeld Holding B.V.
- Estimated tax effects associated with the above pre-tax items,
which are based on the Company’s assessment of deductibility. In
making this assessment, the Company evaluated each item that it had
identified above as a non-GAAP exclusion to determine if such item
was (i) taxable or tax deductible, in which case the tax effect was
taken at the applicable income tax rate in the local jurisdiction,
or (ii) non-taxable or non-deductible, in which case the Company
assumed no tax effect.
The Company presents constant currency revenue information,
which is a non-GAAP financial measure, because it is a global
company that transacts business in multiple currencies and reports
financial information in U.S. dollars. Foreign currency exchange
rate fluctuations affect the amounts reported by the Company in
U.S. dollars with respect to its foreign revenues and can have a
significant impact on the Company’s reported revenues. The Company
calculates constant currency revenue information by translating its
foreign revenues for the relevant period into U.S. dollars at the
average exchange rates in effect during the comparable prior year
period (rather than at the actual exchange rates in effect during
the relevant period).
The Company presents non-GAAP financial measures, including
constant currency revenue information, as a supplement to its GAAP
results. The Company believes presenting non-GAAP financial
measures provides useful information to investors, as it provides
information to assess how its businesses performed excluding the
effects of non-recurring and non-operational amounts and the
effects of changes in foreign currency exchange rates, as
applicable, and (i) facilitates comparing the results being
reported against past and future results by eliminating amounts
that it believes are not comparable between periods and (ii)
assists investors in evaluating the effectiveness of the Company’s
operations and underlying business trends in a manner that is
consistent with management’s evaluation of business performance.
The Company believes that investors often look at ongoing
operations of an enterprise as a measure of assessing performance.
The Company uses its results excluding these amounts to evaluate
its operating performance and to discuss its business with
investment institutions, the Company’s Board of Directors and
others. The Company’s results excluding non-recurring and
non-operational amounts are also the basis for certain incentive
compensation calculations. Non-GAAP financial measures should be
viewed in addition to, and not in lieu of or as superior to, the
Company’s operating performance calculated in accordance with GAAP.
The non-GAAP financial measures presented may not be comparable to
similarly described measures reported by other companies.
Please see the sections entitled “Reconciliations of Constant
Currency Revenue” and “Full Year and Quarterly Reconciliations of
GAAP to Non-GAAP Amounts” later in this release for reconciliations
of GAAP to non-GAAP amounts.
Conference Call Information: The Company will host a
conference call to discuss its first quarter earnings release on
Thursday, June 1, 2023 at 9:00 a.m. EDT. Please log on to
the Company’s website at www.PVH.com and go to the Events
page in the Investors section to listen to the live webcast of the
conference call. The webcast will be available for replay for one
year after it is held. Please log on to www.PVH.com as described
above to listen to the replay. The conference call and webcast
consist of copyrighted material. They may not be re-recorded,
reproduced, re-transmitted, rebroadcast or otherwise used without
the Company’s express written permission. Your participation
represents your consent to these terms and conditions, which are
governed by New York law.
SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking
statements in this press release and made during the conference
call/webcast, including, without limitation, statements relating to
the Company’s future revenue, earnings, plans, strategies,
objectives, expectations and intentions are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Investors are cautioned that such forward-looking
statements are inherently subject to risks and uncertainties, many
of which cannot be predicted with accuracy, and some of which might
not be anticipated, including, without limitation, (i) the
Company’s plans, strategies, objectives, expectations and
intentions are subject to change at any time at the discretion of
the Company; (ii) the Company’s ability to realize anticipated
benefits and savings from divestitures, restructurings and similar
plans, such as the headcount cost reduction initiative announced in
August 2022, and the 2021 sale of assets of, and exit from, its
Heritage Brands business to focus on its Calvin Klein and Tommy
Hilfiger businesses; (iii) the ability to realize the intended
benefits from the acquisition of licensees or the reversion of
licensed rights (such as the recent announcement that we intend to
bring in-house most of the product categories currently licensed to
G-III Apparel Group, Ltd. upon the expirations over time of the
underlying license agreements) and avoid any disruptions in the
businesses during the transition from operation by the licensee to
the direct operation by us; (iv) the Company has significant levels
of outstanding debt and borrowing capacity and uses a significant
portion of its cash flows to service its indebtedness, as a result
of which the Company might not have sufficient funds to operate its
businesses in the manner it intends or has operated in the past;
(v) the levels of sales of the Company’s apparel, footwear and
related products, both to its wholesale customers and in its retail
stores and its directly operated digital commerce sites, the levels
of sales of the Company’s licensees at wholesale and retail, and
the extent of discounts and promotional pricing in which the
Company and its licensees and other business partners are required
to engage, all of which can be affected by weather conditions,
changes in the economy (including inflationary pressures like those
currently being seen globally), fuel prices, reductions in travel,
fashion trends, consolidations, repositionings and bankruptcies in
the retail industries, consumer sentiment and other factors; (vi)
the Company’s ability to manage its growth and inventory; (vii)
quota restrictions, the imposition of safeguard controls and the
imposition of new or increased duties or tariffs on goods from the
countries where the Company or its licensees produce goods under
its trademarks, any of which, among other things, could limit the
ability to produce products in cost-effective countries, or in
countries that have the labor and technical expertise needed, or
require the Company to absorb costs or try to pass costs onto
consumers, which could materially impact the Company’s revenue and
profitability; (viii) the availability and cost of raw materials;
(ix) the Company’s ability to adjust timely to changes in trade
regulations and the migration and development of manufacturers
(which can affect where the Company’s products can best be
produced); (x) the regulation or prohibition of the transaction of
business with specific individuals or entities and their affiliates
or goods manufactured in (or containing raw materials or components
from) certain regions, such as the listing of a person or entity as
a Specially Designated National or Blocked Person by the U.S.
Department of the Treasury’s Office of Foreign Assets Control and
the issuance of Withhold Release Orders by the U.S. Customs and
Border Protection; (xi) changes in available factory and shipping
capacity, wage and shipping cost escalation, and store closures in
any of the countries where the Company’s or its licensees’ or
wholesale customers’ or other business partners’ stores are located
or products are sold or produced or are planned to be sold or
produced, as a result of civil conflict, war or terrorist acts, the
threat of any of the foregoing, or political or labor instability,
such as the current war in Ukraine that has led to the Company’s
decision to exit from its Russia business, including the closure of
its retail stores in Russia and the cessation of its wholesale
operations in Russia and Belarus, and the temporary cessation of
business by many of its business partners in Ukraine; (xii) disease
epidemics and health-related concerns, such as the recent COVID-19
pandemic, which could result in (and, in the case of the COVID-19
pandemic, did result in some of the following) supply-chain
disruptions due to closed factories, reduced workforces and
production capacity, shipping delays, container and trucker
shortages, port congestion and other logistics problems, closed
stores, and reduced consumer traffic and purchasing, or governments
implement mandatory business closures, travel restrictions or the
like, and market or other changes that could result in shortages of
inventory available to be delivered to the Company’s stores and
customers, order cancellations and lost sales, as well as in
noncash impairments of the Company’s goodwill and other intangible
assets, operating lease right-of-use assets, and property, plant
and equipment; (xiii) actions taken towards sustainability and
social and environmental responsibility as part of the Company’s
sustainability and social and environmental strategy may not be
achieved or may be perceived to be falsely claimed, which could
diminish consumer trust in the Company’s brands, as well as the
Company’s brands’ value; (xiv) the failure of the Company’s
licensees to market successfully licensed products or to preserve
the value of the Company’s brands, or their misuse of the Company’s
brands; (xv) significant fluctuations of the U.S. dollar against
foreign currencies in which the Company transacts significant
levels of business; (xvi) the Company’s retirement plan expenses
recorded throughout the year are calculated using actuarial
valuations that incorporate assumptions and estimates about
financial market, economic and demographic conditions, and
differences between estimated and actual results give rise to gains
and losses, which can be significant, that are recorded immediately
in earnings, generally in the fourth quarter of the year; (xvii)
the impact of new and revised tax legislation and regulations; and
(xviii) other risks and uncertainties indicated from time to time
in the Company’s filings with the Securities and Exchange
Commission (“SEC”). This press release includes, and the conference
call/webcast will include, certain non-GAAP financial measures, as
defined under SEC rules. Reconciliations of these measures are
included in the financial information following this Safe Harbor
Statement, as well as in the Company’s Current Report on Form 8-K
furnished to the SEC in connection with this earnings release,
which is available on the Company’s website at www.PVH.com and on
the SEC’s website at www.sec.gov. The Company does not undertake
any obligation to update publicly any forward-looking statement,
including, without limitation, any estimate regarding revenue or
earnings, whether as a result of the receipt of new information,
future events or otherwise.
PVH CORP.
Consolidated GAAP Statements of Operations
(In millions, except per share data)
Quarter Ended
4/30/23
5/1/22
Net sales
$
2,051.1
$
2,006.6
Royalty revenue
84.7
90.0
Advertising and other revenue
22.1
26.1
Total revenue
$
2,157.9
$
2,122.7
Gross profit
$
1,250.3
$
1,238.7
Selling, general and administrative
expenses
1,064.0
1,039.4
Non-service related pension and
postretirement income
0.6
3.6
Equity in net income of unconsolidated
affiliates
11.9
7.4
Earnings before interest and taxes
198.8
210.3
Interest expense, net
22.0
21.8
Pre-tax income
176.8
188.5
Income tax expense
40.8
55.4
Net income
$
136.0
$
133.1
Diluted net income per common share
(1)
$
2.14
$
1.94
Quarter Ended
4/30/23
5/1/22
Depreciation and amortization expense
$
72.3
$
76.8
(1) Please see Note A in Notes to Consolidated GAAP
Statements of Operations for the computations of the Company’s
diluted net income per common share.
PVH CORP.Notes to
Consolidated GAAP Statements of Operations(In millions, except per
share data) A. The Company computed its diluted net
income per common share as follows:
Quarter Ended
Quarter Ended
4/30/23
5/1/22
GAAP
GAAP
Results
Results
Net income
$
136.0
$
133.1
Weighted average common shares
62.7
68.0
Weighted average dilutive securities
0.8
0.7
Total shares
63.5
68.7
Diluted net income per common share
$
2.14
$
1.94
PVH CORP.Consolidated Balance Sheets(In millions)
4/30/23
5/1/22
ASSETS
Current Assets:
Cash and Cash Equivalents
$
373.8
$
748.7
Receivables
928.3
872.5
Inventories
1,718.1
1,389.7
Other
333.0
354.1
Total Current Assets
3,353.2
3,365.0
Property, Plant and Equipment
885.7
863.3
Operating Lease Right-of-Use Assets
1,282.1
1,312.5
Goodwill and Other Intangible Assets
5,588.7
5,998.1
Other Assets
381.5
350.4
TOTAL ASSETS
$
11,491.2
$
11,889.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable and Accrued Expenses
$
1,924.7
$
2,018.9
Current Portion of Operating Lease
Liabilities
342.2
358.1
Short-Term Borrowings
17.3
15.5
Current Portion of Long-Term Debt
112.0
36.2
Other Liabilities
652.6
803.9
Long-Term Portion of Operating Lease
Liabilities
1,123.0
1,171.7
Long-Term Debt
2,193.0
2,216.5
Stockholders’ Equity
5,126.4
5,268.5
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
11,491.2
$
11,889.3
Note: Year over year balances are impacted
by changes in foreign currency exchange rates.
PVH CORP.
Segment Data
(In millions)
REVENUE BY
SEGMENT
Quarter Ended
Quarter Ended
4/30/23
5/1/22
Tommy Hilfiger North
America
Net sales
$
266.7
$
235.5
Royalty revenue
20.3
20.8
Advertising and other revenue
4.5
5.2
Total
291.5
261.5
Tommy Hilfiger
International
Net sales
812.8
790.3
Royalty revenue
15.7
14.5
Advertising and other revenue
4.3
4.6
Total
832.8
809.4
Total Tommy
Hilfiger
Net sales
1,079.5
1,025.8
Royalty revenue
36.0
35.3
Advertising and other revenue
8.8
9.8
Total
1,124.3
1,070.9
Calvin Klein North
America
Net sales
227.7
256.9
Royalty revenue
35.7
42.2
Advertising and other revenue
10.9
14.0
Total
274.3
313.1
Calvin Klein
International
Net sales
598.3
558.6
Royalty revenue
12.8
12.3
Advertising and other revenue
2.3
2.2
Total
613.4
573.1
Total Calvin
Klein
Net sales
826.0
815.5
Royalty revenue
48.5
54.5
Advertising and other revenue
13.2
16.2
Total
887.7
886.2
Heritage Brands
Wholesale
Net sales
145.6
165.3
Royalty revenue
0.2
0.2
Advertising and other revenue
0.1
0.1
Total
145.9
165.6
Total
Revenue
Net sales
2,051.1
2,006.6
Royalty revenue
84.7
90.0
Advertising and other revenue
22.1
26.1
Total
$
2,157.9
$
2,122.7
PVH CORP.
Segment Data (continued)
(In millions)
EARNINGS BEFORE
INTEREST AND TAXES BY SEGMENT
Quarter Ended
Quarter Ended
4/30/23
5/1/22
Results
Results
Under
Under
GAAP
GAAP
Tommy Hilfiger North America
$
2.3
$
(13.0
)
Tommy Hilfiger International
126.3
139.4
Total Tommy Hilfiger
128.6
126.4
Calvin Klein North America
2.2
11.7
Calvin Klein International
100.4
97.1
Total Calvin Klein
102.6
108.8
Heritage Brands Wholesale
15.0
16.8
Corporate
(47.4
)
(41.7
)
Total earnings before interest and
taxes
$
198.8
$
210.3
PVH CORP.
Reconciliations of Constant Currency
Revenue
(In millions) As a supplement to
the Company’s reported operating results, the Company presents
constant currency revenue information, which is a non-GAAP
financial measure. The Company presents results in this manner
because it is a global company that transacts business in multiple
currencies and reports financial information in U.S. dollars.
Foreign currency exchange rate fluctuations affect the amounts
reported by the Company in U.S. dollars with respect to its foreign
revenues. Exchange rate fluctuations can have a significant impact
on reported revenues. The Company believes presenting constant
currency revenue information provides useful information to
investors, as it provides information to assess how its businesses
performed excluding the effects of changes in foreign currency
exchange rates and assists investors in evaluating the
effectiveness of the Company’s operations and underlying business
trends in a manner that is consistent with management’s evaluation
of business performance.
The Company calculates constant currency
revenue information by translating its foreign revenues for the
relevant period into U.S. dollars at the average exchange rates in
effect during the comparable prior year period (rather than at the
actual exchange rates in effect during the relevant period).
Constant currency performance should be
viewed in addition to, and not in lieu of or as superior to, the
Company’s operating performance calculated in accordance with GAAP.
The constant currency revenue information presented may not be
comparable to similarly described measures reported by other
companies.
GAAP Revenue
% Change
Quarter Ended
GAAP
Negative Impact of Foreign
Exchange
Constant Currency
4/30/23
5/1/22
Tommy Hilfiger International
$
832.8
$
809.4
2.9
%
(3.7
) %
6.6
%
Total Tommy Hilfiger
1,124.3
1,070.9
5.0
%
(3.0
) %
8.0
%
Calvin Klein International
613.4
573.1
7.0
%
(4.4
) %
11.4
%
Total Calvin Klein
887.7
886.2
0.2
%
(3.0
) %
3.2
%
Total Revenue
$
2,157.9
$
2,122.7
1.7
%
(2.8
) %
4.5
%
Total Direct-to-Consumer
$
836.8
$
771.3
8.5
%
(3.7
) %
12.2
%
Directly Operated Digital Commerce
$
158.7
$
152.6
4.0
%
(3.7
) %
7.7
%
Wholesale
$
1,214.3
$
1,235.3
(1.7
) %
(2.6
) %
0.9
%
Total Digital
$
416.9
$
430.8
(3.2
) %
(2.6
) %
(0.6
) %
PVH CORP.
Full Year and Quarterly Reconciliations of GAAP to Non-GAAP
Amounts
Reconciliations
of Constant Currency Revenue Guidance
Current Guidance
Full Year
2023
(Estimated)
GAAP revenue increase
3% to 4%
Positive impact of foreign exchange
1%
Non-GAAP revenue increase on a constant
currency basis
2% to 3%
Please refer to the section entitled “Reconciliations of
Constant Currency Revenue” on page 12 of this release for a
description of the presentation of constant currency amounts.
Reconciliation of
GAAP Diluted Net Income Per Common Share to Diluted Net Income Per
Common Share on a Non-GAAP Basis
Full Year 2022
Second Quarter 2022
(Actual)
(Actual)
(In millions, except
per share data)
Results Under GAAP
Adjustments (1)
Non-GAAP Results
Results Under GAAP
Adjustments (2)
Non-GAAP Results
Net income
$
200.4
$
(393.2
)
$
593.6
$
115.3
$
(24.3
)
$
139.6
Total weighted average shares
66.2
66.2
67.0
67.0
Diluted net income per common share
$
3.03
$
8.97
$
1.72
$
2.08
(1)
Represents the impact on net income in the
year ended January 29, 2023 from the elimination of (i) a $78.4
million recognized actuarial gain on retirement plans in the fourth
quarter of 2022, (ii) $43.0 million of net costs incurred in
connection with the Company’s decision to exit from its Russia
business, including the closure of its retail stores in Russia and
the cessation of its wholesale operations in Russia and Belarus,
consisting of noncash asset impairments, contract termination and
other costs, and severance recorded in the second quarter of 2022,
partially offset by a gain on contract terminations recorded in the
fourth quarter of 2022; (iii) a $16.1 million gain recorded in the
second quarter of 2022 in connection with the sale of the Company’s
equity investment in Karl Lagerfeld Holding B.V. (the “Karl
Lagerfeld transaction”); (iv) a $417.1 million noncash goodwill
impairment charge recorded in the third quarter of 2022, which was
non-operational and driven by a significant increase in discount
rates; (v) $20.2 million of costs incurred in the third and fourth
quarters of 2022 related to initial actions taken under the plans
announced in August 2022 to reduce people costs in the Company’s
global offices by approximately 10% by the end of 2023, consisting
of severance; and (vi) a $7.4 million net tax expense associated
with the foregoing pre-tax items.
(2)
Represents the impact on net income in the quarter ended July 31,
2022 from the elimination of (i) $50.5 million of costs incurred in
connection with the Company’s decision to exit from its Russia
business, including the closure of its retail stores in Russia and
the cessation of its wholesale operations in Russia and Belarus,
consisting of noncash asset impairments, contract termination and
other costs, and severance; (ii) a $16.1 million gain recorded in
connection with the Karl Lagerfeld transaction; and (iii) a $10.1
million net tax benefit associated with the foregoing pre-tax
items.
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version on businesswire.com: https://www.businesswire.com/news/home/20230531005917/en/
Investors: Sheryl Freeman (212) 381-3980
investorrelations@pvh.com
Medias: communications@pvh.com
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