Executive Summary
PVH Corp delivered a solid revenue trajectory in QQ3 2024, with reported revenue of $2.255 billion, up 15.5% year over year and 8.7% quarter over quarter. The gross margin remained robust at 58.38%, underscoring the strength of its brand mix and pricing power across Tommy Hilfiger and Calvin Klein. However, operating income declined 10.36% year over year, resulting in a 7.21% operating margin for the quarter, indicating ongoing investments and mix effects that offset topline gains. Net income declined 12.88% year over year to $131.9 million, with EPS at $2.36, reflecting higher SG&A and other expenses relative to the growth in revenue. The company posted a modest operating cash flow of $28.7 million and free cash flow of negative $11.3 million, driven by working capital dynamics and continued capital expenditure, while ending QQ3 with cash and cash equivalents of $559.6 million and net debt of approximately $2.95 billion. The balance sheet remains solid, with total assets of $11.24 billion and a debt-to-equity profile that supports ongoing strategic investments, including accelerating direct-to-consumer (DTC) initiatives and digital transformation efforts. Investors should monitor brand momentum, inventory normalization, and the pace of DTC growth against wholesale resilience, as well as potential markdowns or pricing pressure in a volatile macro environment. Overall, PVH exhibits a stable revenue ramp with disciplined balance sheet management, but the margin trajectory and free cash flow cadence warrant close attention in the near term.
Key Performance Indicators
QoQ: -16.52% | YoY:-12.88%
QoQ: -16.61% | YoY:-10.27%
Key Insights
Revenue: $2,255.1 million for QQ3 2024, up 15.53% YoY and 8.72% QoQ.
Gross Profit: $1,316.6 million; gross margin 58.38% (0.5838).
Operating Income: $162.6 million; operating margin 7.21% (0.0721).
Net Income: $131.9 million; net margin 5.85% (0.0585).
EPS (Diluted): $2.34 per share; GAAP EPS $2.36 per share.
EBITDA: $259.7 million; EBITDA margin 11.52% (0.1152).
Interest Expense: $23.0 million; Depreciation & Amortization: $69.7 million.
Tax Rate (effective): ≈21.0% (0.210).
Balance Sheet...
Financial Highlights
Revenue: $2,255.1 million for QQ3 2024, up 15.53% YoY and 8.72% QoQ.
Gross Profit: $1,316.6 million; gross margin 58.38% (0.5838).
Operating Income: $162.6 million; operating margin 7.21% (0.0721).
Net Income: $131.9 million; net margin 5.85% (0.0585).
EPS (Diluted): $2.34 per share; GAAP EPS $2.36 per share.
EBITDA: $259.7 million; EBITDA margin 11.52% (0.1152).
Interest Expense: $23.0 million; Depreciation & Amortization: $69.7 million.
Tax Rate (effective): ≈21.0% (0.210).
Balance Sheet Indicators: Cash and cash equivalents $559.6 million; Total debt $3.5103 billion; Net debt $2.9507 billion; Total equity $5.2882 billion; Debt to equity 0.664; Current ratio 1.29; Quick ratio 0.69; Cash ratio 0.21.
Cash Flow: Net cash provided by operating activities $28.7 million; capital expenditures $(40.0) million; free cash flow $(11.3) million.
Working Capital Dynamics: Change in working capital $(160.4) million; accounts receivable $(99.9) million; inventory $(32.9) million; accounts payable $(38.4) million.
Capital Structure & Leverage: Total debt $3.5103B; Interest coverage ~7.1x; Debt ratio 0.312; Debt-to-capitalization 0.399; Dividend payout ratio 1.59%; Payout implied by quarterly dividend is minimal given the modest dividend yield (~0.04%).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.26B |
15.53% |
8.72% |
| Gross Profit |
1.32B |
9.84% |
5.67% |
| Operating Income |
162.60M |
-10.36% |
0.00% |
| Net Income |
131.90M |
-12.88% |
-16.52% |
| EPS |
2.36 |
-10.27% |
-16.61% |
Key Financial Ratios
operatingProfitMargin
7.21%
operatingCashFlowPerShare
$0.51
freeCashFlowPerShare
$-0.2
dividendPayoutRatio
1.59%
Management Commentary
Note: The earnings transcript for QQ3 2024 is not provided in the data set. The following highlights summarize likely themes based on the financials and standard PVH communications:
- Brand Momentum and DTC Strategy: Management typically emphasizes strength in Tommy Hilfiger and Calvin Klein across North America and International markets, with ongoing investments to accelerate direct-to-consumer channels and digital commerce.
- Margin Management: Despite topline growth, operating margins remained under pressure due to elevated SG&A and strategic investments; gross margin remains resilient due to brand mix and pricing power, but SG&A intensity and seasonal cost dynamics are monitored closely.
- Inventory and Working Capital: The notable working capital outflow suggests efforts to optimize inventories amid a transition to more balanced wholesale and DTC mix; this trend can affect short-term free cash flow but may improve cash conversion in subsequent periods.
- Capital Allocation: The company continues to invest in brand-building, store and e-commerce capabilities, and selective capex; shareholder-friendly actions (if any) would be weighed against ongoing investment needs and debt leverage.
Forward Guidance
Management did not publish explicit full-year guidance in the QQ3 2024 materials. Given the quarterly performance and industry dynamics, the following qualitative assessment applies:
- Revenue trajectory: Likely mid-single-digit to low-double-digit growth in the near term if current momentum in DTC and wholesale remains favorable and demand holds for premium brands Tommy Hilfiger and Calvin Klein.
- Margin trajectory: Gross margin remains robust around mid-to-high 50s, but operating margin may remain challenged by elevated SG&A and marketing investments, currency effects, and potential markdowns in wholesale channels.
- Cash flow outlook: Free cash flow could remain near breakeven or modestly negative in the near term due to continued capex in e-commerce, store modernization, and supply chain investments; improvement may occur as working capital normalizes and store productivity increases.
- Key factors to monitor: pace of DTC growth vs wholesale, inventory normalization, promotional activity and markdown risk, input costs, FX headwinds, and the speed of deleveraging if debt reduction or equity actions are pursued.
- If management provides any targets in subsequent communications, assess achievability against indicators such as gross margin stability in the high-50s, EBITDA trajectory, and free cash flow cadence over the next 4 quarters.