as hours on Wednesday, PVH Corp.’s stock dropped as the parent company of Calvin Klein and Tommy Hilfiger lowered its full-year profit forecast, blaming the effect of tariffs on shipments into the United States.
PVH (PVH) is “navigating an increasingly uncertain consumer and macroeconomic backdrop,” according to Chief Executive Stefan Larsson, who also said that “we’re not yet fully able to offset that impact.”
The prediction was made after the business’s first-quarter earnings exceeded Wall Street’s projections. The viral marketing campaign for a new underwear line featuring rap superstar Bad Bunny earlier this year was cited by executives as one of the company’s “most impactful product launches in years.”
PVH stated that it has lowered its previous forecast for adjusted profits per share from $12.40 to $12.75 to $10.75 to $11 for the entire year. This projection indicates “an estimated net negative impact related to the tariffs currently in place for goods coming into the U.S.”
The business adhered to their revenue forecast for that period, which said that sales should fall between flat and a small gain.
Following business hours on Wednesday, shares dropped 7.4%.
“There is significant uncertainty with respect to global trade policies and the related impact on the broader macroeconomic environment, and, as such, the company’s 2025 outlook could be subject to significant material change,” stated PVH.
The majority of apparel purchased in the United States is imported. According to the company’s latest annual report, “Most of our products are imported into the countries where they are sold.” In order to help in the second half of the year, Larsson stated that PVH will concentrate on its higher-performing items and become more aggressive with its marketing.
The business has made an effort to reduce costs by, among other things, integrating its IT infrastructure and warehouses. PVH has attempted to expand in North America and Asia in addition to maintaining its competitiveness in Europe, which UBS analysts recently stated was the company’s most significant market.
In a report last week, UBS analysts expressed optimism about PVH’s long-term objectives. However, they thought that investors were generally negative about the business.
Following a review of quarterly statistics, they concluded that European sales trends “softened sequentially, with only 7 out of 13 PVH’s peers recently reporting positive sales growth in the region.”
“Calvin Klein and Tommy Hilfiger are two of the world’s strongest apparel brands,” they stated. “Both brands have high awareness, do a good job meeting customers’ needs, and are on generally upward trajectories in our view.”
They stated that their own research “shows these brands could do a better job of engendering customer loyalty, but overall are well liked on both an absolute and a relative basis.”
As of Wednesday’s close, PVH’s stock had dropped 34.7% over the previous 12 months.
