Unpack consumer trends in Europe/Middle East and mitigation strategies. Quantify headwind from Middle East, Turkey, and core Europe.

Stefan explained the EMEA slowdown was due to the prolonged Middle East conflict impacting direct Middle East wholesale, Turkey (tourism/macro), and broader EMEA consumer traffic to physical stores. Melissa quantified the impact as roughly half from direct Middle East/Turkey and half from broader European consumer backdrop. Mitigation includes fueling APAC/Americas growth and e-commerce. “The first one is the direct effect from the Middle East and Turkey, approximately half. And then approximately half is the indirect effect on the European consumer backdrop.”

How did trends progress by brand in EMEA? Was the May D2C improvement broad-based or led by a specific brand?

Stefan stated that positive e-commerce momentum was seen across both brands in EMEA. The D2C improvement in May vs. April was broad-based, though partly due to calendar timing. He reiterated the prudent outlook despite May's improvement. “We see the positive momentum in e-commerce, we see across both brands.”

Detail the bridge to H2 margin improvement. Explain tariff refund mechanics and use of funds.

Melissa explained the H2 margin improvement is driven by timing shifts (wholesale benefiting H2), gross margin strength (favorable FX/inventory costs building), and SG&A efficiencies (marketing spend weighted to H1, lapping H2 2025 step-up). She clarified the $100M tariff refund will be fully recognized in Q2, boosting gross/operating margin by 470 bps, enabling continued brand investments. Cash will follow standard capital allocation. “our outlook now includes approximately $100 million benefit from tariff refunds to our EBIT, and that's about 100 basis point favorable impact to our full year operating margin, which was not contemplated in our previous guidance.”

PVH

PVH (PVH) Q1 FY27 earnings call: guidance and Q&A

Earnings call· May 2026 (Q1 FY27)· Consumer Discretionary· Jun 4, 2026

Source: earnings call transcript

Executive summary

PVH Q1 FY27 — Strong D2C and E-commerce Growth Offset by EMEA Headwinds

PVH delivered Q1 FY27 results in line with expectations, driven by strong direct-to-consumer and e-commerce performance across Calvin Klein and Tommy Hilfiger, particularly in APAC and Americas. However, the company faced significant headwinds in EMEA due to the prolonged Middle East conflict, leading to a reduced regional outlook. Overall full-year EBIT margin and EPS guidance were reaffirmed, aided by tariff refunds. The company continues to invest in marketing and consumer experience while maintaining inventory discipline.

Highlights

Total revenue for the quarter was $2 billion, up 2% on a reported basis, exceeding guidance.
Direct-to-consumer (D2C) business grew 3% in constant currency, driven by mid-single-digit e-commerce growth.
Gross margins were flat year-over-year at 58.6%, reflecting improvement in all regions excluding tariffs.
Inventory levels were down 5% versus last year, supported by improved availability and on-time deliveries.
EPS of $2.01 was above guidance, primarily driven by lower tax and interest expense.

Concerns

Constant currency revenue was down 2%, in line with expectations.
Wholesale revenue was down mid-single digits in constant currency due to timing and cautious partner positioning.
EMEA outlook was reduced due to the prolonged Middle East conflict, impacting revenue and earnings for Q2 and the back half of the year.
SG&A as a percent of revenue increased 160 basis points versus last year to 52.1%.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year revenue (reported)	approximately flat to the prior year high materiality	FY27	High
Full-year revenue (constant currency)	down slightly high materiality	FY27	High
Full-year operating margin	approximately 8.8% high materiality	FY27	High
Full-year EPS	$11.80 to $12.10 high materiality	FY27	High
Full-year EMEA revenue (constant currency)	decrease mid-single digits medium materiality	FY27	High
Full-year gross margin	up approximately 100 basis points versus last year high materiality	FY27	High
Full-year SG&A as a percentage of revenue	up approximately 100 basis points compared to last year medium materiality	FY27	High
Full-year marketing spend as percentage of sales	at least 50 basis points to approximately 6% medium materiality	FY27	High
Full-year interest expense	approximately $75 million low materiality	FY27	High
Full-year capital spending	approximately $250 million medium materiality	FY27	High
Full-year share repurchases	at least $300 million high materiality	FY27	High
Q2 revenue (reported)	down 3% to 4% high materiality	Q2 · FY27	High
Q2 revenue (constant currency)	down 4% to 5% high materiality	Q2 · FY27	High
Q2 EMEA revenue (constant currency)	down mid-single digits medium materiality	Q2 · FY27	High
Q2 gross margin	increase approximately 470 basis points compared to last year high materiality	Q2 · FY27	High
Q2 SG&A expense as a percent of revenue	increase over 300 basis points medium materiality	Q2 · FY27	High
Q2 operating margin	approximately 9.5% high materiality	Q2 · FY27	High
Q2 EPS	$3 to $3.10 high materiality	Q2 · FY27	High
Q2 tax rate	approximately 22% low materiality	Q2 · FY27	High
Q2 interest expense	approximately $18 million low materiality	Q2 · FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
EMEA Impacted by Middle East conflict, Turkey macro, and broader consumer spending. Negative shipping timing effects for wholesale. Direct-to-consumer revenue: declined mid-single digits in constant currencyWholesale revenue: declined mid-single digits in constant currency	—	up 2% reported, down 5% in constant currency	—	—
Americas D2C growth offset by wholesale decline due to timing shift. Wholesale revenue partly offset by North America license transitions. Direct-to-consumer growth: low single-digitWholesale revenue: mid-single-digit decreaseE-commerce business: up low double digits	—	down 1%	—	—
Asia Pacific Strong start, ahead of plan, driven by D2C. Wholesale partners cautious. Growth in China and other key markets offset by headwinds in Australia (high fuel prices, interest rates). Lunar New Year timing benefit: approximately 4%D2C revenue: up low teens in constant currencyWholesale revenue: declined high single digits in constant currencyChina business: strong high single-digit growth in constant currencyChina D2C: double-digit growth in stores and online	—	up 10% reported, up 6% in constant currency	—	—
Licensing Primarily due to North America license transitions. Go-forward licensing business expected to grow over the full year.	—	down 7%	—	—

Product announcements

Product	Type	Timeline
John Cook for Calvin Klein capsule collaboration	launch	a few weeks ago
Calvin Klein new store concept	launch	about to launch, just opened in Seoul, Korea
Tommy Spring campaign	launch	Q1 FY27
Tommy Hilfiger fan wear capsule	launch	Q1 FY27 (during Miami Formula 1 activation)
Tommy Hilfiger new shop-in-shop and store concept	launch	now rolling out globally, several new openings in Q1, additional new stores planned for this year
Tommy and LFC Summer of Football collection	launch	Last week (relative to 2026-06-04), with the World Cup just about to start

Deals & partnerships

Travis Kelce partnership

American football icon and 3-time Super Bowl Champion as a global brand ambassador and creative collaborator. Series of campaigns starting with Fall '26 campaign.

Macy's customer contract

Launched Tommy Hilfiger women's sportswear in over 200 doors. Part of North America women's wholesale license take-back.

Risks & headwinds

Prolonged Middle East conflict Q2 FY27 and back half of FY27

more pronounced effect expected in the second quarter, including impacts to our wholesale business in the Middle East, to our business in Turkey as well as a broader impact to consumer spending in EMEA.

Mitigation:Leaning into APAC and Americas momentum, fueling e-commerce, maintaining marketing, optimizing inventory.

Challenging consumer and macroeconomic environment in EMEA Q1 FY27, expected to continue

broader macro effect on consumer purchasing behavior in the EMEA region, including the effects of higher fuel costs, which is leading to lower consumer sentiment and fewer drives to stores.

Mitigation:Supercharging e-commerce growth in Europe, maintaining marketing investments.

Wholesale channel decline Q1 FY27, expected to continue in Q2 FY27 for Americas and APAC

down mid-single digits in constant currency (Q1 FY27)

Mitigation:Focusing on D2C growth, strengthening sell-through with key partners.

Headwinds in Australia Q1 FY27, expected to continue

lower revenue in Australia

Mitigation:Sustaining momentum in APAC with D2C growth and disciplined marketplace execution.

Q&A highlights

How much of the assortment is under the PVH+ Plan? How is inventory being managed to avoid markdowns given EMEA slowdown?

Stefan highlighted significant progress in scaling the PVH+ Plan, with strong D2C growth in key categories (Calvin Klein underwear/denim, Tommy Hilfiger sweaters/outerwear). He noted inventory was down 5% due to strengthened supply chain and demand-driven approach, mitigating markdown risk.

“inventory now is down 5%. So we feel really good about the inventory now and how we are positioned going forward.”

asked by Jay Sole · answered by Stefan Larsson

2 min read 6 chapters

Detailed narrative

PVH+ Plan Execution and Momentum

The company highlighted strong execution of its PVH+ Plan, driving momentum in Calvin Klein and Tommy Hilfiger. This included a 3% constant currency growth in D2C, mid-single-digit e-commerce growth, and significant growth in key product categories like Calvin Klein's underwear (mid-single-digit D2C growth) and denim (double-digit D2C growth), and Tommy Hilfiger's sweaters and outerwear (double-digit D2C growth).

These results demonstrate the effectiveness of focusing on power consumer segments and product innovation.

EMEA Headwinds and Mitigation

The prolonged Middle East conflict significantly impacted the EMEA business, leading to notably lower wholesale demand in the direct Middle East business, reduced tourism and macro factors in Turkey, and broader consumer purchasing behavior changes in the EMEA region. To mitigate this, PVH is leaning into momentum in APAC and Americas, fueling e-commerce strength, maintaining marketing investments, and optimizing inventory levels.

Marketing Investment and Consumer Engagement

PVH strategically increased marketing spend by 50 basis points year-over-year, driving increased online traffic and consumer acquisition. Campaigns featuring culturally relevant talent like John Cook for Calvin Klein and Travis Kelce for Tommy Hilfiger generated significant engagement and sell-through rates, with the John Cook collaboration being the most successful to date. This approach aims to connect brand impact to conversion effectively.

Supply Chain and Inventory Management

The company strengthened its supply chain, resulting in inventory levels down 5% year-over-year. Improvements in availability and on-time deliveries contributed to healthy inventory and on-plan margins for both brands. This disciplined inventory management is crucial in navigating challenging market conditions and avoiding significant markdowns.

Global Store and Digital Experience Enhancements

PVH invested in elevating the shopping experience, completing over 140 refurbishments and new store openings globally in Q1. This includes new store concepts for Calvin Klein (e.g., Seoul) and Tommy Hilfiger (e.g., Herald Square, MK Stockholm), alongside continued enhancements to digital experiences and shop-in-shops.

Licensing Business Transition

The licensing business revenue was down 7% due to the North America women's wholesale license transitions. However, the go-forward licensing business is expected to grow over the full year, with successful sell-through of the Tommy product launch in Macy's.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.