PVH returns to 'modest' growth in 2025 but profits drop amid restructuring

PVH, the parent company of both Calvin Klein and Tommy Hilfiger, returned to "modest revenue growth" in 2025, with revenues up by 3%, but also reported a 70% drop in non-adjusted EBIT.

The company's full-year revenues increased by 3% to $8.950 billion (£6.7 billion) for 2025, which was in line with guidance. On a constant currency basis, revenues increased by less than 1%, showing that the company benefited from favourable exchange rates during the year.

Stefan Larsson, the CEO of PVH, commented that the company started 2026 with "positive momentum" and expected DTC (direct-to-consumer) growth in both brands and across all regions for the full year. He added that in Europe, wholesale orders were "positive" for the autumn season.

He added: "We delivered a strong fourth quarter and finish to the year, driven by the strength of our two iconic global brands, Calvin Klein and Tommy Hilfiger, and the continued disciplined execution of our PVH+ Plan."

Yet the company also reported that EBIT on a non-adjusted GAAP basis dropped by 70% - from $772 million (£579 million) in 2025 to $231 million (£173 million) in 2026. This included a $32 million (£24 million) positive impact attributed to foreign currency translation. (EBIT on a GAAP basis means that PVH reported its earnings before interest and tax using standard accounting rules, without adjusting figures to remove one-off or unusual costs due to restructuring or acquisition expenses.)

PVH noted that the large drop in EBIT was due to net costs of $560 million in 2025. These included $480 million recorded as non-cash goodwill and other intangible asset impairment charges, primarily due to a significant increase in discount rates. Additional costs were related to restructuring associated with the company's strategic initiatives.

Even when stripping out these unusual costs, the adjusted EBIT figure (reported as non-GAAP EBIT) still recorded a slight fall, from $865 million in 2025 to $791 million in 2026 (inclusive of the $32 million positive impact from foreign currency translation) - a decrease of 8.6%.

The company said the slight fall in adjusted EBIT was mostly due to a decrease in gross margins, from 59.4% in 2025 to 57.5% in 2026. It added that gross margins were impacted by an increased promotional environment and tariffs on goods coming into the US. The decreases were partially offset, however, by lower product costs, as well as the positive impact of foreign exchange and tariff mitigation actions.

PVH’s fourth-quarter revenues exceeded guidance, increasing by 6% to $2.505 billion (£1.88 billion) year-on-year. Revenues remained flat on a constant currency basis, again exceeding guidance of a slight decrease. Gross margins decreased slightly to 57.6% compared to 58.2% in the prior-year period, due to internal restructuring, tariffs, and an increased promotional environment.

Revenues for 2026 are projected to increase slightly compared to 2025 and to remain flat on a constant currency basis.

"Looking ahead, while the current macro-economic environment remains uncertain, we are continuing to focus on leveraging our increased relevance with the consumer, scaling the impact of our stronger product and activating cut-through global brand campaigns," Larsson added.

Global campaigns include partnerships for the Tommy Hilfiger brand with Cadillac Formula 1, Liverpool Football Club and naming NFL star Travis Kelce as its new ambassador.

Larsson also commented on the popular TV show Love Story, which showcased the "timeless power of Calvin Klein" and demonstrated the brand's ability to "connect with the zeitgeist across generations of consumers".

Melissa Stone, Interim Chief Financial Officer, added, "We are pleased with our fourth quarter and full year 2025 results, delivering or exceeding expectations across key financial metrics. As we look towards 2026, we expect to deliver operating margins consistent with 2025, including modest gross margin expansion, despite the inclusion of a full year of tariffs, and strong expansion on an underlying basis - underscoring our next level PVH+ Plan execution and the strength of our global iconic brands."