When Stefan Larsson became chief executive officer of PVH Corp. in 2021, he steered the company in a new direction.
PVH’s traditional impulse to acquire competitors — which brought its star brands Tommy Hilfiger and Calvin Klein into the fold — was tamped down in favor of devoting more resources to building up those names.
While the full realization of Larsson’s PVH+ strategic plan is still a work in progress, the CEO said the company’s performance last year and in the fourth quarter showed just how far it has come.
“We feel really good about how we ended the year,” Larsson told WWD in an interview, pointing specifically to fourth-quarter adjusted operating margins of 10 percent.
Factoring out the 170-basis-point hit from the gross impact of tariffs, the company’s margins stood at a very healthy 11.7 percent — much better than the 9 percent PVH forecast. Adjusted earnings per share came in at $3.82 — well ahead of the $3.30 analysts projected, according to Yahoo Finance.
Investors approved and sent shares up 2.1 percent to $71.25 in after-hours trading, an increase that came on top of a 4.8 percent bump-up in regular trading.
The quarter represents the work the company has been doing for years, tweaking its business model to become both more tuned-in to the cultural conversation and prepared to adjust when that conversation changes.
Larsson said that, over its life, the PVH+ plan has pushed comparable sales up at a compounded annual growth rate of 2.2 percent in constant currencies. He also noted that the company is closer than ever to its wholesale partners and has driven the penetration of its direct-to-consumer business to 50 percent from 44 percent. The cost base has been cut by 300 basis points while spending on marketing has risen.
But PVH is also still digesting its big changes and recovering from some growing pains, for instance getting Calvin Klein shipments back on time after delays last year when the brand established a global product studio.
On paper, PVH’s bottom line took a big fourth-quarter hit with income tax expenses of $387.7 million, which were tied to goodwill and impairment charges from earlier in the year. Net losses totaled $158.3 million for the quarter, down from earnings of $157.2 million a year earlier.
Revenues for the quarter ended Feb. 1 rose 6 percent to $2.5 billion a year earlier — flat in constant currencies, but ahead of the slight decrease the company predicted.
It’s been a long trip, but Larsson is ready to step on the accelerator.
“Looking back, what we have done in a very tough background with multiple major external headwinds, we have remained steadfast in building a foundation that we now have to stand on to build sustainable profitable growth with Calvin and Tommy with pricing power and expanding margins over time,” the CEO said.
“There’s an ongoing journey where you will see the growth and the margin expansion coming from this targeted consumer focus, expanding the growth categories, driving the 360 consumer engagement and investing back in the marketing.
“It’s an ongoing journey and I feel really good about where we are and how we are step-by-step building Tommy and Calvin into their full potential,” he said.
PVH plans to increase its marketing spend by double digits this year, doubling down on the strategy that has it linking with big names who support the brands’ key products and themes.
Tommy Hilfiger’s revenues for the quarter totaled $1.4 billion, an increase of 1 percent in constant currencies, while Calvin Klein had revenues of $1.1 billion, a decrease of 1 percent in constant currencies.
Larsson said both brands have firmly connected with their core and retooled to be better able to react when opportunities arise.
He pointed to Hulu’s “Love Story: John F. Kennedy Jr. & Carolyn Bessette,” a story that played out as she worked at Calvin Klein in communications.
“What the show reflects is really Calvin’s timeless, iconic power and cultural relevance,” Larsson said. “It’s nice to see how the relevance of Calvin Klein cuts across generations and connects to the zeitgeist.”
While there’s been some commentary that the brand could have been more assertive as it sought to draw the connection to the “Love Story” moment, Larsson countered that that brand work the team has been doing for some time helped it sync up with that moment.
“I’m very proud about how the team has — well before ‘Love Story’ and over the past four years — gone back to the DNA of Calvin, which really collided with the culture of fashion in the ’90s,” he said. “We couldn’t be better positioned and you see it in — the bestselling denim is the ’90s fit in Calvin Klein. You see it in underwear, where we have driven innovation and newness in the iconic underwear. You see it in the ’90s edits on our e-commerce site.”
Calvin Klein has also been working directly with a host of big names, including Jung Kook, Raphinha and Dakota Johnson.
Tommy Hilfiger, too, is making himself heard, particularly in sports through its partnership with Cadillac Formula 1, Liverpool Football Club and, most recently, Travis Kelce, who, in addition to being Taylor Swift’s fiancé, is the football legend who plays for the Kansas City Chiefs.
Larsson said the addition of Kelce as a global brand ambassador and creative collaborator was being “very well received by the consumer.” And there’s much more to come from the partnership.
All the star power has helped PVH cut through.
Larsson said Calvin Klein has 44 million followers over four social platforms with 4 percent engagement. Tommy Hilfiger has 31 million followers and the same engagement, which is four-times better than its competitors.
“If you take leading reach with four-times the engagement, it’s incredibly powerful,” he said.
Now, it’s a matter of harnessing that power.
Fourth-quarter revenues in Europe, the Middle East and Africa — the company’s largest market — tallied $1.2 billion, a 3 percent drop in constant currencies.
Business in the Americas rose 4 percent to $764.7 million.
And the Asia-Pacific region tallied revenues of $436.7 million, a 2 percent drop in constant currency that reflected a change in the timing of the Lunar New Year festivities.
PVH’s revenues increased 3 percent to $9 billion for all of 2025.
This year, the company is projecting its top line will be flat, or up slightly on a constant currency basis.
Adjusted operating margins are projected at about 8.8 percent. And earnings per share are slated to range from $11.80 to $12.10, straddling the $11.88 analysts had penciled in.
