PVH CORP. /DE/ - Quarter Report: 2024 November (Form 10-Q)

% of the Company’s revenue in 2024 is expected to be generated in Ukraine and the Company exited from its Russia business in the second quarter of 2022.

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million by approximately %. The carrying amount of goodwill allocated to this reporting unit as of the date of the test was $ million. The fair value of the Tommy Hilfiger International reporting unit was determined using an income approach based on discounted projected future (debt-free) cash flows. The discount rate applied to these cash flows was based on the weighted average cost of capital for the reporting unit, which takes market participant assumptions into consideration. Estimated future operating cash flows were discounted at a rate of % to account for the relative risks of the estimated future cash flows. Holding all other assumptions constant, a 100 basis point change in the annual revenue growth rate assumption for this business would result in a change to the estimated fair value of the reporting unit of approximately $ million. Likewise, a 100 basis point change in the weighted average cost of capital would result in a change to the estimated fair value of the reporting unit of approximately $ million. While the Tommy Hilfiger International reporting unit was not determined to be impaired, it may be at risk of future impairment if the related business does not perform as projected, or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in the long-term growth rate or the weighted average cost of capital.

 $ $ $ Interest cost        Expected return on plan assets    ()()()()Total    $ $ $ $ 

million and $ million on its term loan under the 2022 facilities during the thirty-nine weeks ended November 3, 2024 and October 29, 2023, respectively.

million of these standby letters of credit and bank guarantees outstanding as of November 3, 2024.

million and $ million, respectively, as of November 3, 2024, $ million and $ million, respectively, as of February 4, 2024 and $ million and $ million, respectively, as of October 29, 2023. The Company evaluates the effectiveness of its non-derivative instrument net investment hedges at inception and each quarter thereafter. No amounts were excluded from effectiveness testing.

 $ Foreign currency borrowings (net investment hedges)  Cross-currency swap contracts (net investment hedges)  Total    $ $ Thirty-Nine Weeks Ended11/3/2410/29/23Foreign currency forward contracts (inventory purchases)$ $ Foreign currency borrowings (net investment hedges)() Cross-currency swap contracts (net investment hedges)  Total    $ $ 

 $ $ $ $ $ 

million and $ million, respectively, of pre-tax expense related to stock-based compensation, with related recognized income tax benefits of $ million in each year.

 $ $ $ Cost of goods soldLess: Tax effect    Income tax expenseTotal, net of tax$ $ $ $ Foreign currency translation adjustments:Cross-currency swap contracts (net investment hedges)$ $ $ $ Interest expenseLess: Tax effect    Income tax expenseTotal, net of tax$ $ $ $ 

million to $ million, net of continued strategic investments by 2026, with the actions to support this initiative largely completed by the end of 2025. In connection with this initiative, the Company recorded pre-tax severance, termination benefits and other employee costs during the thirteen and thirty-nine weeks ended November 3, 2024 of $ million and $ million, respectively. In addition, the Company sold a warehouse and distribution center during the third quarter of 2024 in connection with this initiative, resulting in a pre-tax gain of $ million that was recorded during the thirteen and thirty-nine weeks ended November 3, 2024 and included in other gain in the Company’s Consolidated Statements of Operations. Such amount represents the consideration received, less costs to sell. The warehouse and distribution center assets had no remaining value at the time of the sale. The Company expects to incur additional pre-tax costs in connection with this initiative, consisting primarily of severance, termination benefits and other employee costs, of approximately $ million during the remainder of 2024 and additional costs during 2025, however the additional costs cannot be quantified at this time.

 $ $ $ Royalty revenue        Advertising and other revenue        Total        Revenue – Tommy Hilfiger InternationalNet sales        Royalty revenue        Advertising and other revenue        Total        Revenue – Calvin Klein North AmericaNet sales    Royalty revenue    Advertising and other revenue    Total    Revenue – Calvin Klein InternationalNet sales    Royalty revenue    Advertising and other revenue    Total    Revenue – Heritage Brands WholesaleNet sales    Royalty revenue    Advertising and other revenue    Total    Total RevenueNet sales        Royalty revenue        Advertising and other revenue        Total    $ $ $ $ 

 $ $ $ Owned and operated retail stores    Owned and operated digital commerce sites    Retail net sales    Net sales    Royalty revenue    Advertising and other revenue    Total$ $ $ $ 

million incurred related to the 2022 cost savings initiative described in Note 14, “Exit Activity Costs,” consisting principally of severance. Such costs were included in the Company’s segments as follows: $ million in Tommy Hilfiger North America, $ million in Tommy Hilfiger International, $ million in Calvin Klein North America, $ million in Calvin Klein International, $ million in Heritage Brands Wholesale and $ million in corporate expenses not allocated to any reportable segments. Please see Note 14, “Exit Activity Costs,” for further discussion.

million and $ million, respectively. Warehousing and distribution expenses incurred in the thirteen and thirty-nine weeks ended October 29, 2023 totaled $ million and $ million, respectively.