PVH Q3 Deep Dive: Margin Pressure and Regional Trends Weigh on Market Sentiment

Fashion conglomerate PVH reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 1.7% year on year to $2.29 billion. Its non-GAAP profit of $2.83 per share was 11.4% above analysts’ consensus estimates.

Is now the time to buy PVH? Find out in our full research report (it’s free for active Edge members).

PVH (PVH) Q3 CY2025 Highlights:

• Revenue: $2.29 billion vs analyst estimates of $2.28 billion (1.7% year-on-year growth, 0.5% beat)
• Adjusted EPS: $2.83 vs analyst estimates of $2.54 (11.4% beat)
• Adjusted EBITDA: $270.1 million vs analyst estimates of $252.3 million (11.8% margin, 7.1% beat)
• Management slightly raised its full-year Adjusted EPS guidance to $10.93 at the midpoint
• Operating Margin: 7.9%, in line with the same quarter last year
• Constant Currency Revenue was flat year on year (-5.9% in the same quarter last year)
• Market Capitalization: $3.71 billion

StockStory’s Take

PVH’s third quarter results were met with a notably negative market reaction, despite the company reporting revenue and non-GAAP earnings above Wall Street expectations. Management attributed the quarter’s performance to ongoing execution of its strategy to elevate Calvin Klein and Tommy Hilfiger, with strong digital sales in the Americas and a sequential improvement in Asia Pacific. However, CEO Stefan Larsson acknowledged operational challenges, including higher tariffs and delays in Calvin Klein’s global product transition, as key headwinds. Persistent softness in Europe and lower-than-anticipated gross margin due to tariffs and product mix also contributed to investor caution.

Looking forward, PVH leadership emphasized that full-year guidance reflects both continued investment in core brands and caution about the uneven global consumer backdrop. Management reaffirmed its commitment to mitigating tariff impacts and driving operational efficiencies, while investing in marketing and product innovation for Calvin Klein and Tommy Hilfiger. CFO Zac Coughlin stated, "We expect to have another strong free cash flow year," but also highlighted that tariffs and shifting consumer preferences could remain challenges. The company’s focus on digital growth and supply chain improvements will be critical in navigating these headwinds.

Key Insights from Management’s Remarks

Management identified several operational and market-specific factors driving quarterly results, with a focus on brand investments, supply chain transitions, and regional performance.

• Calvin Klein product transition: Management highlighted ongoing operational challenges as the company centralized Calvin Klein’s global product capability in New York. These efforts led to shipment delays and a shorter full-price selling window in Europe, but are expected to support future product innovation and margin recapture.
• Tariff headwinds: CFO Zac Coughlin noted that increased U.S. tariffs had a direct negative impact on gross margin, accounting for approximately 110 basis points of the decline. Management is pursuing mitigation strategies but acknowledged some costs will persist through the year.
• Digital channel strength: In the Americas, strong digital sales offset weaker store performance, with both Calvin Klein and Tommy Hilfiger’s e-commerce businesses delivering double-digit growth for the fifth consecutive quarter. This was driven by targeted marketing and enhanced online consumer experiences.
• Asia Pacific improvement: The Asia Pacific region, especially China, showed sequential improvement with notable gains in direct-to-consumer revenue and successful brand activations during major retail events. Management cited high single-digit e-commerce growth and strong Double-11 results as evidence of growing brand relevance.
• Leadership changes: The company welcomed Patricia Gabriel as Chief Supply Chain Officer and Global Head of Operations, while CFO Zac Coughlin’s impending departure was announced. Interim CFO Melissa Stone will assume financial leadership as a global search for a permanent replacement is underway.

Drivers of Future Performance

PVH’s outlook is shaped by ongoing cost pressures, evolving consumer demand, and execution of brand-focused growth initiatives.

• Tariff mitigation and margin management: Management expects U.S. tariffs to continue weighing on gross margin in the near term, but is implementing cost-saving initiatives and SG&A efficiencies to offset their impact. Recovering margins will depend on the successful rollout of these actions and the stabilization of supply chain disruptions.
• Brand and product innovation: Investment in marketing campaigns and new product launches for core categories—especially underwear and denim for Calvin Klein, and outerwear and sweaters for Tommy Hilfiger—is intended to drive consumer engagement and sales growth. Management believes that targeted campaigns and expanded product franchises will be critical to capturing market share.
• Regional execution and digital growth: The company is prioritizing digital channel expansion and regional strategies, with a focus on sustaining momentum in Asia Pacific and recovering growth in Europe. Continued improvement in e-commerce and adapting to local consumer preferences will be key to future performance.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be monitoring (1) the pace of margin recovery as tariff mitigation and cost-saving efforts take effect, (2) sustained digital sales momentum and consumer engagement in key regions like Asia Pacific, and (3) tangible improvements in European performance following operational transitions and product launches. We will also watch for updates on permanent CFO appointment and execution of new marketing strategies.

PVH currently trades at $77.08, down from $87.55 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

Now Could Be The Perfect Time To Invest In These Stocks

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return).