The US clothing group PVH Corporation presented solid results for the first quarter of the 2026/27 financial year on Wednesday evening. However, due to the foreseeable negative effects of the Iran War, management lowered its sales forecast for the full year.
In the first quarter, which ended on May 3rd, consolidated sales amounted to almost 2.03 billion US dollars (1.75 billion euros). This corresponded to an increase of 2.1 percent compared to the same period last year. However, adjusted for exchange rate changes, revenue fell by 2.3 percent.
Overall, the group was able to exceed expectations. According to the company, this was primarily due to growth in the key categories of its two main brands in its own retail – namely denim and underwear at Calvin Klein and sweatshirts and outerwear at Tommy Hilfiger.
Overall, Tommy Hilfiger’s sales rose by 2.8 percent (-2.0 percent adjusted for currency effects) to $1.08 billion. Calvin Klein achieved an increase of 1.0 percent to 895.2 million US dollars; adjusted for currency effects, the label’s revenue fell by 2.9 percent.
The consequences of the Iran war are weighing on developments in the EMEA region
The individual market regions developed differently in the first quarter. The growth engine was the Asia-Pacific region with a sales increase of 10.0 percent (currency-adjusted +5.8 percent) to 387.0 million US dollars. In the EMEA region, which includes Europe, the Middle East and Africa, the group’s revenues rose by 2.0 percent to 946.1 million US dollars, although adjusted for currency effects they fell by 5.3 percent. The company attributed the unexpectedly weak development in the region to the “ongoing effects of the Middle East conflict and its broader macroeconomic impacts.” In America, sales fell by 0.9 percent (-1.7 percent adjusted for currency effects) to $602.9 million. Global licensing revenue fell 7.0 percent to $89.1 million.
The gross margin remained unchanged at 58.6 percent compared to the same period last year. According to the company, an advantageous product mix, the expected repayment of unlawful customs charges, lower product costs and positive currency effects offset the effects of higher tariffs and more extensive discounts.
The bottom line was a reported net profit of 88.0 million US dollars (75.9 million euros), after a loss of 44.8 million US dollars had to be recorded in the first quarter of 2025/26. However, adjusted for special effects – in particular high value adjustments and restructuring costs in the same period of the previous year – the surplus fell by 21.2 percent to 93.4 million US dollars. But at least it exceeded expectations.
Management lowers its sales forecast
CEO Stefan Larsson emphasized that the group had achieved the goals of its ongoing “PVH+” reform plan in the first quarter. However, the effects of the Middle East conflict have “put pressure” on consumers in the EMEA region.
In view of the resulting weaker outlook for this region, management revised its sales forecast for the current financial year downwards. It now only expects sales to be at the same level as the previous year, after a slight increase had previously been expected.
However, the earnings forecasts remained unchanged. The group therefore continues to expect an operating margin adjusted for special items of around 8.8 percent and adjusted earnings per share in the range of $11.80 to $12.10.