PVH Corp, the parent company of Calvin Klein and Tommy Hilfiger, saw its shares plummet approximately 21% during midday trading on Thursday. The steep decline came after management revised its full-year revenue guidance downward, citing persistent weakness in the Europe, Middle East, and Africa (EMEA) region tied to the ongoing Middle East conflict.
The stock was last trading at $77.37, a significant drop from Wednesday's close of $98.00. Shares opened the session at $71.17 and touched an intraday low of $69.00, reflecting a loss of more than a fifth of the company's market capitalization.
While PVH reported first-quarter results that exceeded analyst expectations, the market's focus quickly shifted to the lowered outlook. The company posted first-quarter revenue of $2.025 billion, a 2% increase year-over-year, and adjusted earnings per share of $2.01, comfortably above its own guidance range of $1.65 to $1.80. However, the warning overshadowed these positive brand trends.
PVH now expects full-year revenue to be roughly flat, a downgrade from its previous forecast of slight growth. The company maintained its non-GAAP operating margin target at 8.8%, but investors remained unimpressed. The EMEA region, which accounted for 47% of first-quarter sales, reported a 5% decline in constant-currency revenue, highlighting the extent of the demand pressure.
CEO Stefan Larsson described the situation as a balance between "two opposing forces": improving brand momentum at Calvin Klein and Tommy Hilfiger, and headwinds for EMEA consumers linked to the Middle East. He stated that the company is "adjusting to the moment" while continuing to invest in its brands. Interim CFO Melissa Stone noted that while growth continues in the Americas and Asia-Pacific, the weakness in EMEA necessitated the guidance reduction. She also mentioned that tariff refunds are helping to offset some of the impact.
Tariffs remain a significant factor for PVH. The company is factoring in approximately $195 million in gross EBIT drag for the year, based on a blended 15% tariff on goods entering the U.S. It expects to recoup about $100 million through IEEPA tariff refunds, with recognition scheduled for the second quarter.
Analysts quickly responded to the news. Evercore ISI's Michael Binetti downgraded PVH to In-Line from Outperform and lowered his price target to $79 from $95, according to Benzinga. The sharp sell-off appeared company-specific, as rivals such as Ralph Lauren and Abercrombie & Fitch both gained 0.4%, while Levi Strauss was little changed.
PVH's high exposure to the EMEA region—a larger share than its peers—made it particularly vulnerable to the guidance revision. Looking ahead, downside risks remain. If EMEA demand weakens further, promotional activity increases, or tariff refunds fail to offset costs as anticipated, the company's margin targets could come under pressure, even as Calvin Klein and Tommy Hilfiger continue to show strength in other markets.
