PVH Corp.

with a higher AUR sell-through. Tommy will close the year with his Hilfiger holiday campaign, reimagining iconic Tommy style for the holidays, and we're excited for Jisoo to lead the campaign. Lastly, I'm excited for the next step in our marketing execution. For spring 2026, We're taking Tommy's aspirational world to the next level, with Tommy himself inviting a strong group of global talent into his world, all wearing Tommy's powerful style icons in seasonally relevant growth categories across both men's and women's. I can't wait for you all to see it. Now, let me turn to our regional performance, starting with Europe. Reported revenue increased 4%, but was down low single digits in constant currency. Wholesale was down less than 1% as positive fall order book growth was offset by lower in-season replenishment. And D2C was down mid single digits. A few factors drove this. After an unplanned start to the quarter and two consecutive quarters of D2C growth in Europe, in September, we observed a tougher backdrop with more muted activity from our European consumers. Secondly, the expected delays from the transitory Calvin global product challenges put extra strain on our European distribution centers. impacting shipments for both Calvin and Tommy, which made us lose a few critical weeks of full price selling. Thirdly, we had an especially tough season for cold weather outerwear, a big fall category for both Tommy and Calvin. Importantly, we are directly addressing these factors with what's within our control. Independent of the consumer backdrop, where we have driven the most product innovation and newness for this fall In categories such as sweaters and pants for Tommy or underwear and fashion denim for Calvin, we drive positive growth. And season by season, you will see us expand iconic innovation and newness across bigger and bigger parts of the assortment. As I shared previously, we remain on plan to resolve the transitory challenges from the setup of the Calvin Klein global product capability. And for spring, we are on time from our suppliers, and we have captured the going margin improvements we targeted. And in cold weather outerwear, even without the delays, the full price selling window is becoming shorter as consumers every season lean more into lighter transitional outerwear that can be worn for a longer period of time. And even though our transitional outerwear across both brands performed well, and we have increased its share of total outerwear, going forward, we need to accelerate this shift even further. In regions where we have already done that, like in APAC this season, it has performed very well. As I mentioned earlier, in Europe, the holiday season and important Black Friday week is on plan. And in parallel to keeping this momentum up, we are preparing for our biggest partner day yet in January, where we will bring over 500 of our global partners to Amsterdam to show how we, for spring and fall 2026, are amplifying the increased innovation in product with marketing to cut through even more with the consumer. This includes the next level Tommy Lifestyle campaign, further strengthening of Europe-focused talent, and increased shop-in-shop rebuilds. Next, turning to the Americas. We grew overall revenue by 2% in line with our plan of low single-digit growth driven by wholesale growth. In a continued choppy macro backdrop, D2C declined low single digits. Within D2C, we drove higher AURs and digital continued to outperform, delivering double-digit growth. This was supported by another quarter of double-digit traffic growth and driven by product strength and elevated mid-funnel marketing. Our team continued to lean into the next level execution of the PVH Plus plan as we worked to unlock the full growth potential of both brands in the region. A great example is the denim category, where we grew across both brands and included newness in product, stronger presentation, improved fit guide, and enhanced associate training. Looking ahead, we continue to build brand desirability in the region through increasing our refits of our North America retail fleet. Moving to Asia Pacific. For the second consecutive quarter, we delivered better than expected performance. Revenue was flat in constant currency, a sequential improvement from Q2 driven by an improvement in both D2C and wholesale, with gross margin up versus last year. Importantly, D2C turned to positive growth, with notable improvements in China, Japan, and Australia. Highly relevant global activations across both brands, amplified by regional talent, drove continued e-commerce growth up high single digits. Driven by our hero products, Tommy delivered double-digit growth in key categories – with transitional outerwear and sweaters both up approximately 20% across men's and women's. Calvin saw sequentially stronger growth in fall product driven by the newly launched underwear programs in both men's and women's. We generated strong results during key consumer moments, such as Golden Week and Chinese Valentine's Day. And we just finished Double 11, the largest consumer moment of fiscal 2025, where we drove gross merchandise revenue 15% higher than last year, and Calvin and Tommy again ranked among the top international brands on Tmall. Through strong execution, we continue to deliver sequential improvements in performance, We have increased investments in marketing to activate the full funnel and continue to expand new stores across APAC, all reflecting the importance of the region as one of our key growth drivers. In addition, both Calvin and Tommy were proud to participate as first-time exhibitors at the China International Import Expo, building on our longstanding presence and commitment to the market. Turning to our licensing business, revenues in licensing were lower versus last year, reflecting the transition of previously announced women's North America wholesale categories. As we have shared before, our large and diversified global licensing business is a key competitive advantage. When we ourselves lean into our core categories to turn the brand building consumer flywheel, our long-term partners bring their expertise across multiple complementary categories. Consistent with the outerwear category classification business for the U.S. wholesale channel, we recently entered into a new licensing agreement for the women's dress classification with an expected launch in spring 2027. Both categories live outside of our brand-specific lifestyle paths. Additionally, in Q3, we held a global licensing summit here in New York with all our partners where each of our brands shared their key growth strategies and where our key partners showcased how they, from those brand strategies, drive consumer engagement and growth in the categories they are the experts in. Next, a quick moment on leadership. We're excited to welcome Patricia Gabriel, who joined us last month as Chief Supply Chain Officer and Global Head of Operations. She is succeeding David Sandman, who earlier this year took over the Global Brand President role for Calvin Klein. Patricia is a consumer-centric leader with a strong proven track record, and she will help further accelerate our PVH Plus plan progress. And a few weeks ago, we announced that Zach Coughlin, our Chief Financial Officer, will be departing for a new opportunity outside of our industry. I want to thank Zach for his partnership and contributions to the business and to me personally. Over the past several years, Zach has played an integral role in advancing our PBH Plus plan progress and driving important efficiencies across the company. Thank you, Zach, and we wish you all the best in your next chapter. Zach will stay with us through the end of December, and we have already begun a global search for our next CFO. In the interim, Melissa Stone will serve as our CFO. Melissa has over two decades of PVH financial leadership experience across accounting, controlling, and FP&A, giving her a deep understanding of our global businesses. And I would like to thank her and our full finance leadership team for stepping up during this time. In closing, we are fully geared up to deliver the rest of the holiday season and the full year as we continue to step by step and season by season build Calvin Klein and Tommy Hilfiger into their full potential. There are only a small handful of globally iconic brands like Tommy Hilfiger and Calvin Klein, and we have two of them. In any consumer backdrop, we remain relentlessly focused on the levers within our control to keep leaning into our iconic brands and through our PVH Plus plan, continue to strengthen our product, marketing, and marketplace experience in a systematic and repeatable way. Everywhere we do this, combining our iconic brand strength with innovation and newness we're already driving increasingly profitable growth with the consumer today. And with that, I'll turn the call over to Zach.

Thanks, Stefan, and good morning. First, on a personal note, as this marks my last earnings call at PVH, I want to thank the PVH team, as well as our customers and shareholders. I am truly grateful for the time that I have spent at PVH, working closely with Stefan and all our colleagues around the globe, to help drive our two iconic brands forward through the execution of the PBH Plus plan. My comments are based on non-GAAP results and are reconciled on our press release. As Stefan discussed, this quarter, we continue to make progress on our multi-year journey to build Calvin Klein and Tommy Hilfiger into the most desirable lifestyle brands in the world, delivering our exceeding expectations across nearly all key financial metrics for third quarter. maintaining our strong cost discipline to offset a slightly higher than anticipated tariff headwind in the quarter. We delivered our overall revenue plan and a sequential improvement in operating margin, despite some choppiness in the quarter and an uneven global consumer backdrop. As a result, our EPS was better than expected. Looking forward, following our third quarter results and on-plan start to holiday, we are reaffirming our four-year constant currency revenue and operating margin guidance, and narrowing our reported revenue and EPS guidance to the high end of the previous ranges. Importantly, we also ended the quarter with inventory up 3% compared to third quarter last year, including a 2% increase due to tariffs. This reflects a significant improvement as compared to the increase in the second quarter of 2025 as we continue to tightly manage inventories. Our inventory is fresh and current and well-positioned headed into holiday. And we remain on track to land the year with inventory aligned to our sales plan, excluding tariffs. I will now discuss our third quarter results in more detail and then move on to our outlook. Revenue for the third quarter was up 2% on a reported basis and down less than 1% on a constant currency basis in line with our guidance. Starting from a regional perspective, our EMEA business was up 4% on a reported basis and down 2% in constant currency for the quarter. As Stefan discussed, sales were on track through August, but coming into September, we saw a tougher start to the fall season. The lower trend continued through the balance of the quarter, with the overall result for the quarter being sales in the direct-to-consumer business down mid-single digits in constant currency. Our wholesale business was down less than 1% in constant currency, as positive fall order book growth was offset by lower-than-planned in-season replenishment. As Stefan discussed... AMEA results reflected a combination of factors, including muted consumer activity driven by a tougher backdrop in Europe, lower cold-weather outerwear performance, and delays related to the transitory Calvin global product challenges. In our Americas business, revenue was up 2%, driven by mid-single-digit growth in wholesale due to the impact of Calvin Klein Women's sportswear and jeans wholesale transition in-house. Excluding this impact, Wholesale shipments were lower than last year as expected due to a more balanced timing of first half, second half shipments versus last year when shipments were more heavily weighted to the back half. On a normalized basis, wholesale sales, excluding the impact of licensing transitions, are planned up low single digits for the second half. Direct-to-consumer revenue in the Americas business was down low single digits. While we exited Q2 with modest sales growth in stores, the consumer backdrop in the third quarter remained choppy, with store revenue down low single digits for the quarter. This was partially offset by robust performance in both our Tommy Hilfiger and Calvin Klein digital commerce businesses, which in total delivered another quarter of double-digit growth. This marked our fifth consecutive quarter of year-over-year growth, fueled by the investments we've made to elevate the online consumer experience. In our Asia-Pacific business, We delivered revenue better than planned and flat on a constant currency basis, showing the strength of our Asia-Pacific business and marking another quarter of sequential improvement in the region. Notably, direct-to-consumer revenue grew low single digits in constant currency in both brands, with a return to growth in our retail store business and continued growth in our digital commerce business. Direct-to-consumer revenue also grew mid-single digits in China, driven by strength in digital commerce. Higher DTC revenue for the region was offset by lower wholesale revenue. Revenue for our Asia-Pacific business was down 1% on a reported basis. In our licensing business, revenue was down 11% versus last year, primarily due to the previously mentioned transition of Calvin Klein Women's sportswear and jeans in-house. Turning to our global brands, Tommy Hilfiger revenues were up 1% as reported and down 2% in constant currency. Calvin Klein revenues were up 2% as reported and flat in constant currency. The decrease in revenue on a constant currency basis in EMEA weighed more heavily on our Tommy Hill figure business, as Stefan discussed. From an overall PVH channel perspective, our direct-to-consumer revenue was flat as reported and down 1% in constant currency. Sales in our retail stores were flat as reported and down 2% in constant currency, as modest growth in APAC was more than offset by low single-digit declines in Americas and EMEA. Sales in our owned and operated e-commerce business were up 1% as reported and flat in constant currency as strong growth in APAC in Americas was offset by a decline in EMEA. Total wholesale revenue was up 4% as reported and up 1% in constant currency, which reflects the previously mentioned transition of Calvin Klein women's sportswear and jeans in-house partially offset by the decreases in EMEA and APEC. In the third quarter, our gross margin was 56.3%, a decrease of 210 basis points compared to last year. Progress on working through the Calvin Klein operational challenges continued, but our third quarter gross margin was lower than planned due to the unfavorable impact of timing and mix of the new higher tariffs. In third quarter, gross margin reflected approximately 110 basis points, due to the unmitigated impact of tariffs. And as we have previously discussed, approximately 50 basis points of the decrease in gross margin was the impact of our North American license transitions. The remaining 50 basis point decrease was primarily due to higher promotions and the impact of Calvin Klein product shipment delays, which included a shorter full-price fall selling season in Europe that Stefan discussed. SG&A spending was down in constant currency, and SG&A as a percent of revenue was lower than planned, improving 40 basis points versus last year to 47.5%, reflecting both our growth driver five actions and a favorable impact from the timing of expenses. As we discussed last quarter, we will invest more into marketing in the second half of this year to capitalize on key consumer moments and to support our brand building, cut-through campaigns, amplified by mega talent. Marketing was up in third quarter versus last year, but lower than we initially planned as we decided to shift some of the spending into fourth quarter to maximize our holiday impact and build positive momentum into 2026. EBIT for the quarter was $202 million and operating margin was 8.8%. Earnings per share was $2.83, reflecting a negative impact of 37 cents related to tariffs, and a positive impact of 14 cents related to exchange. Interest expense was $21 million and our tax rate for the quarter was 25.5%. Additionally, during the quarter, we were pleased to complete our previously announced accelerated share repurchase program, reducing our share count by 2.3 million additional shares and bringing the total amount of shares purchased under the agreements to 6.9 million, and bringing our year-to-date total, including open market purchases, to 7.7 million shares. And now moving on to our outlook. Starting with the fourth quarter, we are projecting revenue to be up slightly to up low single digits on a reported basis and down slightly on a constant currency basis compared to the prior year, in line with Q3 trends. Overall for the Americas, we are planning fourth quarter revenue up mid-single digits with growth in wholesale, partially offset by low single-digit decline in DTC sales. In EMEA, we expect third quarter trends in constant currency to continue into fourth quarter, and in Asia Pacific, we expect revenue to be down slightly in constant currency. While underlying DTC trends are expected to remain positive, Growth is muted by an unfavorable impact due to the timing of Lunar New Year compared to last year. We are expecting fourth quarter gross margin to decline approximately 200 basis points versus the prior year, including an unmitigated tariff impact of approximately 150 basis points, partially offset by the impact of planned mitigation actions. As we discussed last quarter, the impact of tariffs will be felt much more heavily in the fourth quarter than the third quarter, as more inventory sells through at the new higher rates. We expect SG&A as a percentage of revenue to be down 50 basis points compared to last year, reflecting the increased marketing investments I spoke of earlier, more than offset by our growth driver five actions, which will continue to deliver efficiencies. Overall, we are projecting our fourth quarter operating margin to be approximately 9% down approximately 100 basis points compared to last year. Earnings per share is expected to be in the range of $3.20 to $3.35. Our tax rate for the third quarter is estimated at approximately 22% in line with our tax projection for the full year, and interest expense is projected to be approximately $20 million. And now moving on to the full year. We continue to operate in an uneven global consumer backdrop. As such, we are reaffirming our constant currency revenue and operating margin guidance and narrowing the range of our reported revenue and EPS guidance to the high end of the previous ranges. On the top line, we are narrowing our reported revenue outlook to up low single digits compared to increase slightly to low single digits previously. We continue to project revenue to be flat to increase slightly in constant currency. We are reaffirming our operating margin outlook of approximately 8.5%, and narrowing our EPS outlook to a range of $10.85 to $11, compared to $10.75 to $11 previously. We continue to expect the tariffs currently in place will have an overall net negative impact on our earnings in 2025, including an approximately $65 million unmitigated impact EBITS, or approximately $1.05 per share, compared to previous guidance of $70 million and $1.15 per share. We have begun to mitigate some of these costs through strategic actions this year and expect to fully mitigate the impact over time, but for this year, some we will need to absorb. The net impact of the tariffs and these mitigation actions are embedded within our guidance. Regionally, our revenue outlook remains unchanged for Americas and APAC. In the Americas, we are planning revenue up mid-single digits, including the positive impact of the Calvin Klein Women's sportswear and jeans wholesale transition in-house. And in Asia Pacific, revenue is planned down mid-single digits in constant currency. In EMEA, we expect the lower third quarter trends to continue into fourth quarter. And as a result, we are now planning four-year revenue and constant currency to be down slightly compared to last year. We continue to expect gross margin to decrease approximately 250 basis points versus last year. On SG&A, we continue to expect expense to be lower in constant currency in 2025 compared to 2024, and our SG&A expenses as a percentage of revenue to decrease approximately 100 basis points, reflecting significant cost savings connected to our growth driver five actions. Our interest expense projection is unchanged at approximately $80 million, And our tax rate for 2025 continues to be estimated at approximately 22%. Before we open up for questions, I just want to conclude by saying that while we are navigating a dynamic and uneven global consumer backdrop, within that, we continue to focus on taking proactive actions within our control and making progress across all dimensions of the business through execution of the PBH Plus plan. building momentum into 2026 to deliver sustainable and increasingly profitable growth for the long term. And with that, operator, we would like to open it up for questions.

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