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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedMay 5, 2024

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto

Commission File Number 001-07572
PVH CORP.
(Exact name of registrant as specified in its charter)
Delaware13-1166910
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
285 Madison Avenue,New York,New York10017
(Address of principal executive offices)(Zip Code)
    
(212) 381-3500
__________________________________________________________________________________________________________________________________________________________________________
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $1.00 par valuePVHNew York Stock Exchange
4.125% Senior Notes due 2029PVH29New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer  
Non-accelerated filer  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

The number of outstanding shares of common stock of the registrant as of June 4, 2024 was 55,857,787.



PVH CORP.
INDEX
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking statements in this Quarterly Report on Form 10-Q, including, without limitation, statements relating to our future revenue, earnings and cash flows, plans, strategies, objectives, expectations and intentions are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated, including, without limitation, (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our ability to realize anticipated benefits and savings from divestitures, restructurings and similar plans, such as the headcount cost reduction initiative announced in August 2022, the 2021 sale of assets of, and exit from, our Heritage Brands menswear and retail businesses, and the November 2023 sale of the Heritage Brands women’s intimate apparel business to focus on our Calvin Klein and Tommy Hilfiger businesses; (iii) the ability to realize the intended benefits from the acquisition of licensees or the reversion of licensed rights (such as the announced, in-process plan to bring in-house most of the product categories that are or had been licensed to G-III Apparel Group, Ltd. upon the expirations over time of the underlying license agreements) and avoid any disruptions in the businesses during the transition from operation by the licensee to the direct operation by us; (iv) we have significant levels of outstanding debt and borrowing capacity and we use a significant portion of our cash flows to service our indebtedness, as a result of which we might not have sufficient funds to operate our businesses in the manner we intend or have operated in the past; (v) the levels of sales of our apparel, footwear and related products, both to our wholesale customers and in our retail stores and our directly operated digital commerce sites, the levels of sales of our licensees at wholesale and retail, and the extent of discounts and promotional pricing in which we and our licensees and other business partners are required to engage, all of which can be affected by weather conditions, changes in the economy (including inflationary pressures like those currently being experienced globally), fuel prices, reductions in travel, fashion trends, consolidations, repositionings and bankruptcies in the retail industries, consumer sentiment and other factors; (vi) our ability to manage our growth and inventory; (vii) quota restrictions, the imposition of safeguard controls and the imposition of new or increased duties or tariffs on goods from the countries where we or our licensees produce goods under our trademarks, any of which, among other things, could limit the ability to produce products in cost-effective countries, or in countries that have the labor and technical expertise needed, or require us to absorb costs or try to pass costs onto consumers, which could materially impact our revenue and profitability; (viii) the availability and cost of raw materials; (ix) our ability to adjust timely to changes in trade regulations and the migration and development of manufacturers (which can affect where our products can best be produced); (x) the regulation or prohibition of the transaction of business with specific individuals or entities and their affiliates or goods manufactured in (or containing raw materials or components from) certain regions, such as the listing of a person or entity as a Specially Designated National or Blocked Person by the U.S. Department of the Treasury’s Office of Foreign Assets Control and the issuance of Withhold Release Orders by the U.S. Customs and Border Protection; (xi) changes in available factory and shipping capacity, wage and shipping cost escalation, and store closures in any of the countries where our licensees’ or wholesale customers’ or other business partners’ stores are located or products are sold or produced or are planned to be sold or produced, as a result of civil conflict, war or terrorist acts, the threat of any of the foregoing, or political or labor instability, such as the current war in Ukraine that led to our exit from our retail business in Russia and the cessation of our wholesale operations in Russia and Belarus, and the temporary cessation of business by many of our business partners in Ukraine; (xii) disease epidemics and health-related concerns, such as the recent COVID-19 pandemic, which could result in (and, in the case of the COVID-19 pandemic, did result in some of the following) supply-chain disruptions due to closed factories, reduced workforces and production capacity, shipping delays, container and trucker shortages, port congestion and other logistics problems, closed stores, and reduced consumer traffic and purchasing, or governments implement mandatory business closures, travel restrictions or the like, and market or other changes that could result in shortages of inventory available to be delivered to our stores and customers, order cancellations and lost sales, as well as in noncash impairments of our goodwill and other intangible assets, operating lease right-of-use assets, and property, plant and equipment; (xiii) actions taken towards sustainability and social and environmental responsibility as part of our sustainability and social and environmental strategy may not be achieved or may be perceived to be falsely claimed, which could diminish consumer trust in our brands, as well as our brands’ values; (xiv) the failure of our licensees to market successfully licensed products or to preserve the value of our brands, or their misuse of our brands; (xv) significant fluctuations of the U.S. dollar against foreign currencies in which we transact significant levels of business; (xvi) our retirement plan expenses recorded throughout the year are calculated using actuarial valuations that incorporate assumptions and estimates about financial market, economic and demographic conditions, and differences between estimated and actual results give rise to gains and losses, which can be significant, that are recorded immediately in earnings, generally in the fourth quarter of the year; (xvii) the impact of new and revised tax legislation and regulations; and (xviii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

We do not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimate regarding revenue, earnings or cash flows, whether as a result of the receipt of new information, future events or otherwise.




PART I -- FINANCIAL INFORMATION














PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

PVH Corp.
Consolidated Statements of Operations
Unaudited
(In millions, except per share data)
Thirteen Weeks Ended
May 5,April 30,
20242023
Net sales    $1,850.2 $2,051.1 
Royalty revenue    81.2 84.7 
Advertising and other revenue    20.5 22.1 
Total revenue    1,951.9 2,157.9 
Cost of goods sold (exclusive of depreciation and amortization)753.2 907.6 
Gross profit    1,198.7 1,250.3 
Selling, general and administrative expenses    1,017.3 1,064.0 
Non-service related pension and postretirement income0.5 0.6 
Other gain10.0  
Equity in net income of unconsolidated affiliates13.2 11.9 
Income before interest and taxes 205.1 198.8 
Interest expense    23.3 25.3 
Interest income    5.6 3.3 
Income before taxes 187.4 176.8 
Income tax expense36.0 40.8 
Net income$151.4 $136.0 
Basic net income per common share $2.63 $2.17 
Diluted net income per common share
$2.59 $2.14 

See accompanying notes.
1


PVH Corp.
Consolidated Statements of Comprehensive Income
Unaudited
(In millions)
Thirteen Weeks Ended
May 5,April 30,
20242023
Net income$151.4 $136.0 
Other comprehensive (loss) income:
Foreign currency translation adjustments(14.8)(16.7)
Net unrealized and realized gain (loss) related to effective cash flow hedges, net of tax expense (benefit) of $0.3 and $(0.4)
1.4 (2.0)
Net gain (loss) on net investment hedges, net of tax expense (benefit) of $0.9 and $(3.2)
2.8 (9.8)
Total other comprehensive loss(10.6)(28.5)
Comprehensive income$140.8 $107.5 

See accompanying notes.

2



PVH Corp.
Consolidated Balance Sheets
(In millions, except share and per share data)
May 5,February 4,April 30,
202420242023
UNAUDITEDAUDITEDUNAUDITED
ASSETS
Current Assets:
Cash and cash equivalents    $376.2 $707.6 $373.8 
Trade receivables, net of allowances for credit losses of $43.9, $41.1 and $44.7
810.4 793.3 911.4 
Other receivables    24.6 13.9 16.9 
Inventories, net    1,346.8 1,419.7 1,718.1 
Prepaid expenses    263.8 237.7 254.4 
Other90.1 87.5 78.6 
Total Current Assets2,911.9 3,259.7 3,353.2 
Property, Plant and Equipment, net 824.7 862.6 885.7 
Operating Lease Right-of-Use Assets1,257.2 1,213.8 1,282.1 
Goodwill    2,315.2 2,322.1 2,357.7 
Tradenames    2,596.9 2,599.1 2,710.3 
Other Intangibles, net492.7 498.3 520.7 
Other Assets, including deferred taxes of $36.3, $33.8 and $30.7
390.1 417.3 381.5 
Total Assets$10,788.7 $11,172.9 $11,491.2 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable    $863.0 $1,073.4 $1,063.0 
Accrued expenses643.0 776.2 802.1 
Deferred revenue    55.3 55.5 59.6 
Current portion of operating lease liabilities304.2 288.9 342.2 
Short-term borrowings      17.3 
Current portion of long-term debt    11.9 577.5 112.0 
Total Current Liabilities    1,877.4 2,771.5 2,396.2 
Long-Term Portion of Operating Lease Liabilities1,101.0 1,075.8 1,123.0 
Long-Term Debt2,145.9 1,591.7 2,193.0 
Other Liabilities, including deferred taxes of $345.9, $346.1 and $345.5
605.2 615.0 652.6 
Stockholders’ Equity:
Preferred stock, par value $100 per share; 150,000 total shares authorized    
   
Common stock, par value $1 per share; 240,000,000 shares authorized; 88,904,351; 88,567,275 and 87,774,420 shares issued
88.9 88.6 87.8 
Additional paid-in capital - common stock    3,330.5 3,313.3 3,257.5 
Retained earnings    5,554.4 5,407.3 4,886.7 
Accumulated other comprehensive loss(764.2)(753.6)(741.6)
Less: 32,877,311; 30,934,587 and 24,986,324 shares of common stock held in treasury, at cost
(3,150.4)(2,936.7)(2,364.0)
Total Stockholders’ Equity    5,059.2 5,118.9 5,126.4 
Total Liabilities and Stockholders’ Equity$10,788.7 $11,172.9 $11,491.2 


See accompanying notes.
3



PVH Corp.
Consolidated Statements of Cash Flows
Unaudited
(In millions)
Thirteen Weeks Ended
May 5,April 30,
20242023
OPERATING ACTIVITIES
Net income$151.4 $136.0 
Adjustments to reconcile to net cash used by operating activities:
Depreciation and amortization    72.1 72.3 
Equity in net income of unconsolidated affiliates(13.2)(11.9)
Deferred taxes    (5.5)(3.0)
Stock-based compensation expense    10.5 13.1 
Other gain(10.0) 
Changes in operating assets and liabilities:
Trade receivables, net    (19.5)13.4 
Other receivables(0.8)4.2 
Inventories, net    69.9 76.2 
Accounts payable, accrued expenses and deferred revenue    (328.2)(315.0)
Prepaid expenses    (26.6)(44.3)
Other, net    33.2 (16.4)
Net cash used by operating activities(66.7)(75.4)
INVESTING ACTIVITIES
Purchases of property, plant and equipment    (38.8)(57.9)
Purchases of investments held in rabbi trust(2.5)(1.9)
Proceeds from investments held in rabbi trust0.1 0.2 
Net cash used by investing activities(41.2)(59.6)
FINANCING ACTIVITIES
Net payments on short-term borrowings (27.8)
Repayment of 2022 facilities(3.0)(3.0)
Net proceeds from settlement of awards under stock plans7.0 0.1 
Proceeds from 4 1/8% senior notes, net of related fees553.1  
Redemption of 3 5/8% senior notes(561.7) 
Cash dividends    (2.2)(2.4)
Acquisition of treasury shares    (214.0)(4.6)
Payments of finance lease liabilities(1.1)(1.2)
Net cash used by financing activities(221.9)(38.9)
Effect of exchange rate changes on cash and cash equivalents    (1.6)(3.0)
Decrease in cash and cash equivalents(331.4)(176.9)
Cash and cash equivalents at beginning of period    707.6 550.7 
Cash and cash equivalents at end of period    $376.2 $373.8 

See accompanying notes.
4



PVH Corp.
Consolidated Statements of Changes in Stockholders’ Equity
Unaudited
(In millions, except share and per share data)
Thirteen Weeks Ended April 30, 2023
Common StockAdditional
Paid-In
Capital-
Common
Stock
Accumulated
Other
Comprehensive Loss
Total Stockholders’ Equity
Preferred
Stock
Shares$1 par
Value
Retained
Earnings
Treasury
Stock
January 29, 2023$ 87,641,611 $87.6 $3,244.5 $4,753.1 $(713.1)$(2,359.4)$5,012.7 
Net income136.0 136.0 
Foreign currency translation adjustments(16.7)(16.7)
Net unrealized and realized loss related to effective cash flow hedges, net of tax benefit of $0.4
(2.0)(2.0)
Net loss on net investment hedges, net of tax benefit of $3.2
(9.8)(9.8)
Comprehensive income107.5 
Settlement of awards under stock plans132,809 0.2(0.1)0.1 
Stock-based compensation expense13.1 13.1 
Dividends declared ($0.0375 per common share)
(2.4)(2.4)
Acquisition of 53,950 treasury shares
(4.6)(4.6)
April 30, 2023$ 87,774,420 $87.8 $3,257.5 $4,886.7 $(741.6)$(2,364.0)$5,126.4 


Thirteen Weeks Ended May 5, 2024
Common StockAdditional
Paid-In
Capital-
Common
Stock
Accumulated
Other
Comprehensive Loss
Total Stockholders’ Equity
Preferred
Stock
Shares$1 par
Value
Retained
Earnings
Treasury
Stock
February 4, 2024$ 88,567,275 $88.6 $3,313.3 $5,407.3 $(753.6)$(2,936.7)$5,118.9 
Net income151.4 151.4 
Foreign currency translation adjustments(14.8)(14.8)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $0.3
1.4 1.4 
Net gain on net investment hedges, net of tax expense of $0.9
2.8 2.8 
Comprehensive income140.8 
Settlement of awards under stock plans337,076 0.3 6.7 7.0 
Stock-based compensation expense10.5 10.5 
Dividends declared ($0.075 per common share)
(4.3)(4.3)
Acquisition of 1,942,724 treasury shares, including excise taxes of $1.7
(213.7)(213.7)
May 5, 2024$ 88,904,351 $88.9 $3,330.5 $5,554.4 $(764.2)$(3,150.4)$5,059.2 

See accompanying notes.

5


PVH CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. GENERAL

PVH Corp. and its consolidated subsidiaries (collectively, the “Company”) constitute a global apparel company with a brand portfolio that includes TOMMY HILFIGER and Calvin Klein, which are owned, and Van Heusen, Nike and other brands, which the Company licenses for certain product categories. The Company designs and markets branded sportswear (casual apparel), jeanswear, performance apparel, intimate apparel, underwear, swimwear, dress shirts, handbags, accessories, footwear and other related products and licenses its owned brands globally over a broad array of product categories and for use in certain territories. The Company completed the sale of its Warner’s, Olga and True&Co. women’s intimates businesses to Basic Resources on November 27, 2023 (the “Heritage Brands intimates transaction”).

The consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated in consolidation. Investments in entities that the Company does not control but has the ability to exercise significant influence over are accounted for using the equity method of accounting. The Company’s Consolidated Statements of Operations include its proportionate share of the net income or loss of these entities.

The Company’s fiscal years are based on the 52-53 week periods ending on the Sunday closest to February 1 and are designated by the calendar year in which the fiscal year commences. References to a year are to the Company’s fiscal year, unless the context requires otherwise.

The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not contain all disclosures required by U.S. GAAP for complete financial statements. Reference is made to the Company’s audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended February 4, 2024.

The preparation of the interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates.

The results of operations for the thirteen weeks ended May 5, 2024 and April 30, 2023 are not necessarily indicative of those for a full fiscal year due, in part, to seasonal factors. Furthermore, the data contained in these consolidated financial statements are unaudited and are subject to year-end adjustments. However, in the opinion of management, all known adjustments have been made to present fairly the consolidated operating results for the unaudited periods.

There continues to be uncertainty in the current macroeconomic environment due to inflationary pressures globally, the Israel-Hamas war, the attacks on commercial shipping vessels in the Red Sea, the war in Ukraine, and foreign currency volatility. If economic conditions were to worsen, the Company’s results of operations, financial condition and cash flows from operations may be materially and adversely impacted.

Israel-Hamas War, Red Sea Shipping Disruption and War in Ukraine

The Israel-Hamas war, which began in October 2023, did not have a material impact on the Company’s business in 2023 and is not expected to have a material impact on the Company’s business in 2024. Less than 1% of the Company’s revenue in 2024 is expected to be generated in Israel, and less than 2% of the Company’s revenue in 2024 is expected to be generated in the Middle East, including Israel.

The recent attacks on commercial shipping vessels in the Red Sea have led to disruption and instability in global supply chains, which have resulted in shipment delays that are impacting, and could continue to impact, the Company’s inventory and sales volume. Shipping delays have also resulted in, and may continue to result in, increased freight costs, for reasons including the need to rely on more expensive shipping routes and shipping methods (such as air freight). Such impacts did not have a material impact on the Company’s business in 2023 or in the first quarter of 2024, and are not expected to have a material impact on the Company’s business for the remainder of 2024.

6


The war in Ukraine, which began in February 2022, did not have a material impact on the Company’s business in 2023 and is not expected to have a material impact on the Company’s business in 2024. Less than 1% 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.

2. REVENUE

The Company generates revenue primarily from sales of finished products under its owned trademarks through its wholesale and retail operations. The Company also generates royalty and advertising revenue from licensing rights to its trademarks to third parties. Revenue is recognized upon the transfer of control of products or services to the Company’s customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those products or services.
Performance Obligations Under License Agreements
As of May 5, 2024, the contractual minimum fees on the portion of all license agreements not yet satisfied totaled $759.0 million, of which the Company expects to recognize $219.3 million as revenue during the remainder of 2024, $229.9 million in 2025 and $309.8 million thereafter. The Company elected not to disclose the remaining performance obligations for contracts that have an original expected term of one year or less and expected sales-based percentage fees for the portion of all license agreements not yet satisfied.
Deferred Revenue
Changes in deferred revenue, which primarily relate to customer loyalty programs, gift cards and license agreements for the thirteen weeks ended May 5, 2024 and April 30, 2023 were as follows:
Thirteen Weeks Ended
(In millions)5/5/244/30/23
Deferred revenue balance at beginning of period$55.5 $54.3 
Net additions to deferred revenue during the period39.8 44.8 
Reductions in deferred revenue for revenue recognized during the period (1)
(40.0)(39.5)
Deferred revenue balance at end of period$55.3 $59.6 

(1) Represents the amount of revenue recognized during the period that was included in the deferred revenue balance at the beginning of the period and does not contemplate revenue recognized from amounts deferred during the period.

The Company also had long-term deferred revenue liabilities included in other liabilities in its Consolidated Balance Sheets of $8.7 million, $9.4 million and $11.4 million as of May 5, 2024, February 4, 2024 and April 30, 2023, respectively.

Please see Note 16, “Segment Data,” for information on the disaggregation of revenue by segment and distribution channel.

3. INVENTORIES

Inventories are comprised principally of finished goods and are stated at the lower of cost or net realizable value, except for certain retail inventories in North America that are stated at the lower of cost or market using the retail inventory method. Cost for all wholesale inventories in North America and certain wholesale and retail inventories in Asia is determined using the first-in, first-out method. Cost for all other inventories is determined using the weighted average cost method. The Company reviews current business trends and forecasts, inventory aging and discontinued merchandise categories to determine adjustments that it estimates will be needed to liquidate existing clearance inventories and record inventories at either the lower of cost or net realizable value or the lower of cost or market using the retail inventory method, as applicable.

4. DIVESTITURES

Sale of Warner’s, Olga and True&Co. Women’s Intimates Businesses

The Company entered into a definitive agreement on November 10, 2023 to sell its Warner’s, Olga and True&Co. women’s intimates businesses to Basic Resources for $160.0 million in cash and completed the sale on November 27, 2023 for net proceeds of $155.6 million, after transaction costs. The carrying value of the net assets sold on the closing date was $140.3 million, which consisted of $44.5 million of inventory and $95.8 million of tradenames.
7



In connection with the closing of the transaction, the Company recorded a gain of $15.3 million in the fourth quarter of 2023, which represented the excess of the amount of consideration received over the net carrying value of the assets, less costs to sell. An incremental gain of $10.0 million was recorded in the first quarter of 2024 due to the accelerated realization of the earnout provided for in the agreement with Basic Resources, which will be paid in installments to the Company during the remainder of 2024 and the first quarter of 2025. These gains were recorded in other gain in the Company’s Consolidated Statements of Operations for the respective period and included in the Heritage Brands Wholesale segment.

5. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the thirteen weeks ended May 5, 2024, by segment (please see Note 16, “Segment Data,” for further discussion of the Company’s reportable segments), were as follows:
(In millions)Calvin Klein North AmericaCalvin Klein InternationalTommy Hilfiger North AmericaTommy Hilfiger InternationalTotal
Balance as of February 4, 2024
Goodwill, gross    $781.8 $877.4 $203.0 $1,558.3 $3,420.5 
Accumulated impairment losses(449.9)(471.3)(177.2) (1,098.4)
Goodwill, net    331.9 406.1 25.8 1,558.3 2,322.1 
Currency translation (2.2) (4.7)(6.9)
Balance as of May 5, 2024
Goodwill, gross    781.8 875.2 203.0 1,553.6 3,413.6 
Accumulated impairment losses(449.9)(471.3)(177.2) (1,098.4)
Goodwill, net    $331.9 $403.9 $25.8 $1,553.6 $2,315.2 

The Company assesses the recoverability of goodwill and other indefinite-lived intangible assets annually, at the beginning of the third quarter of each fiscal year, and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the carrying amount may be impaired. Intangible assets with finite lives are amortized over their estimated useful life and are tested for impairment, along with other long-lived assets, when events and circumstances indicate that the assets might be impaired. Please see Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended February 4, 2024 for discussion of the Company’s goodwill and other intangible assets impairment testing process.

There have been no significant events or changes in circumstances during the thirteen weeks ended May 5, 2024 that would indicate the remaining carrying amount of the Company’s goodwill and other intangible assets may be impaired as of May 5, 2024.

6. RETIREMENT AND BENEFIT PLANS

The Company, as of May 5, 2024, has two noncontributory qualified defined benefit pension plans covering substantially all employees resident in the United States hired prior to January 1, 2022, who meet certain age and service requirements. The plans provide monthly benefits upon retirement generally based on career average compensation, subject to the change made in the fourth quarter of 2023 as discussed below, and years of credited service. The plans also provide participants with the option to receive their benefits in the form of lump sum payments. Vesting in plan benefits generally occurs after five years of service. The Company refers to these two plans as its “Pension Plans.”

The Company also has three noncontributory unfunded non-qualified supplemental defined benefit pension plans, the most significant of which is a supplemental pension plan for certain employees resident in the United States hired prior to January 1, 2022, who meet certain age and service requirements that provides benefits for compensation in excess of Internal Revenue Service earnings limits and requires payments to vested employees upon or after employment termination or retirement, according to their distribution election, and two other plans for select former senior management. The Company refers to these three plans as its “SERP Plans.”

8



In the fourth quarter of 2023, the Company’s Board of Directors approved changes to its Pension Plans and its supplemental pension plan to freeze the pensionable compensation and credited service amounts used to calculate participants’ benefits effective June 30, 2024, except for employees near retirement age that meet a specified service requirement, who will continue to accrue benefits under the Pension Plans and supplemental pension plan, as applicable, for two years after the effective date of the freeze.

The components of net benefit cost recognized were as follows:
Pension PlansSERP Plans
Thirteen Weeks EndedThirteen Weeks Ended
(In millions)5/5/244/30/235/5/244/30/23
Service cost$3.7 $5.0 $0.2 $0.4 
Interest cost    7.2 7.2 0.6 0.7 
Expected return on plan assets    (8.3)(8.5)  
Total    $2.6 $3.7 $0.8 $1.1 

The Company also provides certain postretirement health care and life insurance benefits to certain retirees resident in the United States under two plans. Retirees contribute to the cost of the applicable plan, which are unfunded and frozen. The Company refers to these two plans as its “Postretirement Plans.” Net benefit cost related to the Postretirement Plans was immaterial for the thirteen weeks ended May 5, 2024 and April 30, 2023.

The components of net benefit cost are recorded in the Company’s Consolidated Statements of Operations as follows: (i) the service cost component is recorded in selling, general and administrative (“SG&A”) expenses and (ii) the other components are recorded in non-service related pension and postretirement income.

Currently, the Company does not expect to make material contributions to the Pension Plans in 2024. The Company’s actual contributions may differ from planned contributions due to many factors, including changes in tax and other laws, as well as significant differences between expected and actual pension asset performance or interest rates.

7. DEBT

Short-Term Borrowings

The Company has the ability to draw revolving borrowings under the senior unsecured credit facilities discussed below in the section entitled “2022 Senior Unsecured Credit Facilities.” The Company had no revolving borrowings outstanding under these facilities as of May 5, 2024.

Additionally, the Company has the ability to borrow under short-term lines of credit, overdraft facilities and short-term revolving credit facilities denominated in various foreign currencies. These facilities provided for borrowings of up to $193.5 million based on exchange rates in effect on May 5, 2024 and are utilized primarily to fund working capital needs. The Company had no borrowings outstanding under these facilities as of May 5, 2024.

Commercial Paper

The Company has the ability to issue unsecured commercial paper notes with maturities that vary but do not exceed 397 days from the date of issuance primarily to fund working capital needs. The Company had no borrowings outstanding under the commercial paper note program as of May 5, 2024.

9



Long-Term Debt

The carrying amounts of the Company’s long-term debt were as follows:
(In millions)5/5/242/4/244/30/23
Senior unsecured Term Loan A facility due 2027 (1)
$457.8 $461.6 $478.8 
7 3/4% debentures due 2023  99.9 
3 5/8% senior unsecured euro notes due 2024 (1)
 565.7 574.6 
4 5/8% senior unsecured notes due 2025498.5 498.2 497.3 
3 1/8% senior unsecured euro notes due 2027 (1)
642.3 643.7 654.4 
4 1/8% senior unsecured euro notes due 2029 (1)
559.2   
Total    2,157.8 2,169.2 2,305.0 
Less: Current portion of long-term debt    11.9 577.5 112.0 
Long-term debt    $2,145.9 $1,591.7 $2,193.0 

(1) The carrying amount of the euro-denominated Term Loan A facility and the senior unsecured euro notes includes the impact of changes in the exchange rate of the United States dollar against the euro.

Please see Note 10, “Fair Value Measurements,” for the fair value of the Company’s long-term debt as of May 5, 2024, February 4, 2024 and April 30, 2023.

The Company’s mandatory long-term debt repayments for the remainder of 2024 through 2029 were as follows as of May 5, 2024:
(In millions)
Fiscal Year
Amount (1)
Remainder of 2024$8.9 
2025511.9 
202611.9 
20271,072.4 
2028 
2029565.0 

(1) A portion of the Company’s mandatory long-term debt repayments is denominated in euros and subject to changes in the exchange rate of the United States dollar against the euro.

Total debt repayments for the remainder of 2024 through 2029 exceed the total carrying amount of the Company’s debt as of May 5, 2024 because the carrying amount reflects the unamortized portions of debt issuance costs and the original issue discounts.

As of May 5, 2024, approximately 80% of the Company’s long-term debt had fixed interest rates, with the remainder at variable interest rates.

2022 Senior Unsecured Credit Facilities

On December 9, 2022, the Company entered into senior unsecured credit facilities (the “2022 facilities”). The 2022 facilities consist of (a) a €440.6 million euro-denominated Term Loan A facility (the “Euro TLA facility”), (b) a $1,150.0 million United States dollar-denominated multicurrency revolving credit facility (the “multicurrency revolving credit facility”), which is available in (i) United States dollars, (ii) Australian dollars (limited to A$50.0 million), (iii) Canadian dollars (limited to C$70.0 million), or (iv) euros, yen, pounds sterling, Swiss francs or other agreed foreign currencies (limited to €250.0 million), and (c) a $50.0 million United States dollar-denominated revolving credit facility available in United States dollars or Hong Kong dollars (together with the multicurrency revolving credit facility, the “revolving credit facilities”). The 2022 facilities are due on December 9, 2027.

10



The Company made payments of $3.0 million on its term loan under the 2022 facilities in each of the thirteen weeks ended May 5, 2024 and April 30, 2023.

The current applicable margin with respect to the Euro TLA facility as of May 5, 2024 was 1.250%. The current applicable margin with respect to the revolving credit facilities as of May 5, 2024 was 0.125% for loans bearing interest at the base rate, Canadian prime rate or daily simple euro short term rate and 1.125% for loans bearing interest at the euro interbank offered rate (“EURIBOR”) or any other rate specified in the 2022 facilities. The applicable margin for borrowings under the Euro TLA facility and each revolving credit facility is subject to adjustment (i) after the date of delivery of the compliance certificate and financial statements, with respect to each of the Company’s fiscal quarters, based upon the Company’s net leverage ratio or (ii) after the date of delivery of notice of a change in the Company’s public debt rating by Standard & Poor’s or Moody’s.

The 2022 facilities require the Company to comply with customary affirmative, negative and financial covenants, including a maximum net leverage ratio, calculated in a manner set forth in the terms of the 2022 facilities. Please see Note 8, “Debt,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended February 4, 2024 for further discussion of the 2022 facilities.

7 3/4% Debentures Due 2023

The Company had outstanding $100.0 million of debentures due November 15, 2023 that accrued interest at the rate of 7 3/4%. The Company repaid these debentures at maturity.

3 5/8% Euro Senior Notes Due 2024

The Company had outstanding €525.0 million principal amount of 3 5/8% senior notes due July 15, 2024. The Company redeemed these notes on April 25, 2024 utilizing the net proceeds from the issuance of the €525.0 million principal amount of 4 1/8% senior notes due July 16, 2029 together with other available funds, as discussed below. The Company recorded an immaterial amount of debt extinguishment costs to write-off previously capitalized debt issuance costs associated with these notes during the first quarter of 2024.

4 5/8% Senior Notes Due 2025

The Company has outstanding $500.0 million principal amount of 4 5/8% senior notes due July 10, 2025. The Company may redeem some or all of these notes at any time prior to June 10, 2025 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, the Company may redeem some or all of these notes on or after June 10, 2025 at their principal amount plus any accrued and unpaid interest.

3 1/8% Euro Senior Notes Due 2027

The Company has outstanding €600.0 million principal amount of 3 1/8% senior notes due December 15, 2027. The Company may redeem some or all of these notes at any time prior to September 15, 2027 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, the Company may redeem some or all of these notes on or after September 15, 2027 at their principal amount plus any accrued and unpaid interest.

4 1/8% Euro Senior Notes Due 2029

The Company issued on April 15, 2024 €525.0 million principal amount of 4 1/8% senior notes due July 16, 2029. The Company incurred €5.4 million ($5.7 million based on exchange rates in effect on the payment date) of fees in connection with the issuance of the notes, which are being amortized over the term of the notes.

The Company intends to allocate an amount equal to the net proceeds of the offering to finance or refinance new or existing environmental Eligible Projects focused mainly on sustainable materials, and packaging and circularity, as defined in the Company’s prospectus. Pending allocation to Eligible Projects, the Company utilized the net proceeds of the offering, together with other available funds, to redeem the €525.0 million principal amount of 3 5/8% senior notes due July 15, 2024, as discussed above.

The Company may redeem some or all of these notes at any time prior to April 16, 2029 by paying a “make whole” premium, plus any accrued and unpaid interest. In addition, the Company may redeem some or all of these notes on or after April 16, 2029, or all of these notes at any time in the event of certain developments affecting taxation, at their principal amount plus any accrued and unpaid interest.
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The Company’s financing arrangements contain financial and non-financial covenants and customary events of default. As of May 5, 2024, the Company was in compliance with all applicable financial and non-financial covenants under its financing arrangements.

The Company also has standby letters of credit primarily to collateralize the Company’s insurance and lease obligations. The Company had $72.1 million of these standby letters of credit outstanding as of May 5, 2024.

Please see Note 8, “Debt,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended February 4, 2024 for further discussion of the Company’s debt.

8. INCOME TAXES

The effective income tax rates for the thirteen weeks ended May 5, 2024 and April 30, 2023 were 19.2% and 23.1%, respectively. The effective income tax rate for the thirteen weeks ended May 5, 2024 was lower than the prior year period primarily due to the favorable resolution of uncertain tax positions and changes in the jurisdictional mix of earnings.

9. DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges

The Company has exposure to changes in foreign currency exchange rates related to anticipated cash flows associated with inventory purchases made by our foreign subsidiaries in a currency other than their functional currency. The Company uses foreign currency forward contracts to hedge against a portion of this exposure.

The Company records the foreign currency forward contracts at fair value in its Consolidated Balance Sheets and does not net the related assets and liabilities. The foreign currency forward contracts associated with certain international inventory purchases are designated as effective hedging instruments (“cash flow hedges”). As such, the changes in the fair value of the cash flow hedges are recorded in equity as a component of accumulated other comprehensive loss (“AOCL”). No amounts were excluded from effectiveness testing.

Net Investment Hedges

The Company has exposure to changes in foreign currency exchange rates related to the value of its investments in foreign subsidiaries denominated in a currency other than the United States dollar. To hedge against a portion of this exposure, the Company uses both non-derivative instruments (the par value of certain of its foreign-denominated debt) and derivative instruments (cross-currency swap contracts), which it designates as net investment hedges.

The Company designated (i) the par value of its €600.0 million principal amount of 3 1/8% senior notes due 2027, (ii) until their redemption on April 25, 2024, the par value of its €525.0 million principal amount of 3 5/8% senior notes due 2024, and (iii) as of April 25, 2024, the par value of its €525.0 million principal amount of 4 1/8% senior notes due 2029 (collectively, “foreign currency borrowings”), that were issued by PVH Corp., a U.S.-based entity, as net investment hedges of its investments in certain of its foreign subsidiaries that use the euro as their functional currency. Please see Note 7, “Debt,” for further discussion of the Company’s foreign currency borrowings.

The Company records the foreign currency borrowings at carrying value in its Consolidated Balance Sheets. The carrying value of the foreign currency borrowings is remeasured at the end of each reporting period to reflect changes in the foreign currency exchange spot rate. During the period in which the foreign currency borrowings are designated as net investment hedges, such remeasurement is recorded in equity as a component of AOCL. The fair value and the carrying value of the foreign currency borrowings designated as net investment hedges were $1,190.2 million and $1,201.5 million, respectively, as of May 5, 2024, $1,201.6 million and $1,209.4 million, respectively, as of February 4, 2024 and $1,203.8 million and $1,229.0 million, respectively, as of April 30, 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.

In 2023, the Company entered into multiple fixed-to-fixed cross-currency swap contracts, which, in aggregate, economically convert the Company’s $500.0 million principal amount of 4 5/8% senior notes due 2025 from a United States dollar-denominated obligation to a euro-denominated obligation of €457.2 million. As part of these swap contracts, the Company will receive fixed-rate United States dollar-denominated interest at a weighted average rate of 1.405% and pay fixed-rate euro-denominated interest at a rate of 0%. The cross-currency swap contracts expire on July 10, 2025. The Company designated
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these cross-currency swap contracts as net investment hedges of its investments in certain of its foreign subsidiaries that use the euro as their functional currency. The Company records the cross-currency swap contracts at fair value in its Consolidated Balance Sheets and does not net the related assets and liabilities. Changes in the fair value of the cross-currency swap contracts are recorded in equity as a component of AOCL. The Company evaluates the effectiveness of its derivative instrument net investment hedges at inception and each quarter thereafter. The interest components of the cross-currency swaps are excluded from the assessment of hedge effectiveness and are initially recorded in equity as a component of AOCL. Such amounts are recognized ratably over the term of the cross-currency swap contracts as a credit to interest expense in the Company’s Consolidated Statements of Operations.

Undesignated Contracts

The Company records immediately in earnings changes in the fair value of hedges that are not designated as effective hedging instruments (“undesignated contracts”), which primarily include foreign currency forward contracts related to third party and intercompany transactions, and intercompany loans that are not of a long-term investment nature. Any gains and losses that are immediately recognized in earnings on such contracts are largely offset by the remeasurement of the underlying balances.

The Company does not use derivative or non-derivative financial instruments for trading or speculative purposes. The cash flows from the Company’s hedges are presented in the same category in the Company’s Consolidated Statements of Cash Flows as the items being hedged.

The following table summarizes the fair value and presentation of the Company’s derivative financial instruments in its Consolidated Balance Sheets:
AssetsLiabilities
 5/5/242/4/244/30/235/5/242/4/244/30/23
(In millions)Other Current AssetsOther AssetsOther Current AssetsOther AssetsOther Current AssetsOther AssetsAccrued ExpensesOther LiabilitiesAccrued ExpensesOther LiabilitiesAccrued ExpensesOther Liabilities
Contracts designated as cash flow and net investment hedges:
Foreign currency forward contracts (inventory purchases)$15.0 $0.7 $13.2 $0.5 $11.4 $0.1 $2.2 $0.1 $2.4 $0.4 $24.0 $1.3 
Cross-currency swap contracts (net investment hedges)4.6 1.16.4       1.3   
Undesignated contracts:
Foreign currency forward contracts0.5  1.9  0.4  0.9  1.1  5.7  
Total$20.1 $1.8 $21.5 $0.5 $11.8 $0.1 $3.1 $0.1 $3.5 $1.7 $29.7 $1.3 

The notional amount outstanding of foreign currency forward contracts was $1,264.6 million at May 5, 2024. Such contracts expire principally between May 2024 and October 2025.

The following tables summarize the effect of the Company’s hedges designated as cash flow and net investment hedging instruments:
Gain (Loss) Recognized in Other Comprehensive (Loss) Income
(In millions)
Thirteen Weeks Ended5/5/244/30/23
Foreign currency forward contracts (inventory purchases)$7.4 $2.4 
Foreign currency borrowings (net investment hedges)3.1 (13.0)
Cross-currency swap contracts (net investment hedges)2.3  
Total    $12.8 $(10.6)

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Amount of Gain Reclassified from AOCL into Income, Consolidated Statements of Operations Location, and Total Amount of Consolidated Statements of Operations Line Item
(In millions)Amount ReclassifiedLocation
Total Statements of Operations Amount
Thirteen Weeks Ended5/5/244/30/235/5/244/30/23
Foreign currency forward contracts (inventory purchases)$5.7 $4.8 Cost of goods sold$753.2 $907.6 
Cross-currency swap contracts (net investment hedges)1.7  Interest expense23.3 25.3 
Total$7.4 $4.8 

A net gain in AOCL on foreign currency forward contracts at May 5, 2024 of $20.7 million is estimated to be reclassified in the next 12 months in the Company’s Consolidated Statement of Operations to cost of goods sold as the underlying inventory hedged by such forward exchange contracts is sold. Amounts recognized in AOCL for the effective portion of the Company’s net investment hedges, including amounts associated with the 3 5/8% senior notes redeemed in April 2024, would be recognized in earnings only upon the sale or substantially complete liquidation of the hedged net investment.

The following table summarizes the effect of the Company’s undesignated contracts recognized in SG&A expenses in its Consolidated Statements of Operations:
(In millions)Gain (Loss) Recognized in SG&A Expenses
Thirteen Weeks Ended5/5/244/30/23
Foreign currency forward contracts (1)
$1.4 $(1.0)

(1) Any gains and losses that are immediately recognized in earnings on such contracts are largely offset by the remeasurement of the underlying balances.

The Company had no derivative financial instruments with credit risk-related contingent features underlying the related contracts as of May 5, 2024.

10. FAIR VALUE MEASUREMENTS

In accordance with U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy prioritizes the inputs used to measure fair value as follows:

    Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

    Level 2 – Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.

    Level 3 – Unobservable inputs reflecting the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available.

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In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:
5/5/242/4/244/30/23
(In millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Foreign currency forward contracts    N/A$16.2 N/A$16.2 N/A$15.6 N/A$15.6 N/A$11.9 N/A$11.9 
Cross-currency swap contracts (net investment hedges)N/A5.7 N/A5.7 N/A6.4 N/A6.4 N/AN/AN/AN/A
Rabbi trust assets12.7 N/AN/A12.7 9.9 N/AN/A9.9 9.0 N/AN/A9.0 
Total Assets$12.7 $21.9 N/A$34.6 $9.9 $22.0 N/A$31.9 $9.0 $11.9 N/A$20.9 
Liabilities:
Foreign currency forward contracts    N/A$3.2 N/A$3.2 N/A$3.9 N/A$3.9 N/A$31.0 N/A$31.0 
Cross-currency swap contracts (net investment hedges)N/A N/A N/A1.3 N/A1.3 N/AN/AN/AN/A
Total LiabilitiesN/A$3.2 N/A$3.2 N/A$5.2 N/A$5.2 N/A$31.0 N/A$31.0 

The fair value of the foreign currency forward contracts is measured as the total amount of currency to be purchased, multiplied by the difference between (i) the foreign currency forward rate as of the period end and (ii) the settlement rate specified in each contract. The fair value of the cross-currency swap contracts is measured using the discounted cash flows of the contracts, which are determined based on observable inputs, including the foreign currency forward rates and discount rates, as of the period end. The fair value of the rabbi trust assets, which consist of investments in mutual funds, is valued at the net asset value of the funds, as determined by the closing price in the active market in which the individual fund is traded.

The Company established a rabbi trust that holds investments related to the Company’s supplemental savings plan. The rabbi trust is considered a variable interest entity and it is consolidated in the Company’s financial statements because the Company is considered the primary beneficiary of the rabbi trust. The rabbi trust assets generally mirror the investment elections made by eligible plan participants and are included as follows in the Company’s Consolidated Balance Sheets:
5/5/242/4/244/30/23
(In millions)Other Current AssetsOther AssetsOther Current AssetsOther AssetsOther Current AssetsOther Assets
Rabbi trust assets$1.0 $11.7 $0.8 $9.1 $0.9 $8.1 

The corresponding deferred compensation liability is included in accrued expenses and other liabilities in the Company’s Consolidated Balance Sheets. Unrealized gains recognized on the rabbi trust investments were immaterial during the thirteen weeks ended May 5, 2024 and April 30, 2023.

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

The Company’s non-financial assets, which primarily consist of goodwill, other intangible assets, property, plant and equipment, and operating lease right-of-use assets, are not required to be measured at fair value on a recurring basis, and instead are reported at their carrying amount. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying amount may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial assets are assessed for impairment. If the fair value is determined to be lower than the carrying amount, an impairment charge is recorded to write down the asset to its fair value. There were no impairments recorded during the thirteen weeks ended May 5, 2024 and April 30, 2023.

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The carrying amounts and the fair values of the Company’s cash and cash equivalents, short-term borrowings and long-term debt were as follows:
5/5/242/4/244/30/23
(In millions)Carrying AmountFair ValueCarrying AmountFair ValueCarrying AmountFair Value
Cash and cash equivalents$376.2 $376.2 $707.6 $707.6 $373.8 $373.8 
Short-term borrowings    17.3 17.3 
Long-term debt (including portion classified as current)2,157.8 2,141.7 2,169.2 2,159.5 2,305.0 2,278.0 

The fair values of cash and cash equivalents and short-term borrowings approximate their carrying amounts due to the short-term nature of these instruments. The Company estimates the fair value of its long-term debt using quoted market prices as of the last business day of the applicable quarter. The Company classifies the measurement of its long-term debt as a Level 1 measurement. The carrying amounts of long-term debt reflect the unamortized portions of debt issuance costs and the original issue discounts.

11. STOCK-BASED COMPENSATION

The Company grants stock-based awards under its Stock Incentive Plan (the “Plan”). Awards that may be granted under the Plan include, but are not limited to (i) service-based non-qualified stock options (“stock options”); (ii) service-based restricted stock units (“RSUs”); and (iii) contingently issuable performance share units (“PSUs”). Please see Note 13, “Stock-Based Compensation,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended February 4, 2024 for a detailed description of the Company’s stock-based compensation awards, including information relating to vesting terms and service, performance and market conditions, and additional information.

Net income for the thirteen weeks ended May 5, 2024 and April 30, 2023 included $10.5 million and $13.1 million, respectively, of pre-tax expense related to stock-based compensation, with related recognized income tax benefits of $1.4 million and $1.6 million, respectively.

Stock Options

The Company estimates the fair value of stock options at the date of grant using the Black-Scholes-Merton model. The estimated fair value of the stock options granted is expensed over the stock options’ requisite service periods.

The following summarizes the assumptions used to estimate the fair value of stock options granted during the thirteen weeks ended May 5, 2024 and the resulting weighted average grant date fair value per stock option:
5/5/24
Weighted average risk-free interest rate4.33 %
Weighted average expected stock option term (in years)6.25
Weighted average Company volatility53.32 %
Expected annual dividends per share    $0.15  
Weighted average grant date fair value per stock option$60.96  

Stock option activity for the thirteen weeks ended May 5, 2024 was as follows:
(In thousands, except per stock option data)Stock OptionsWeighted Average Exercise Price
Per Stock Option
Outstanding at February 4, 2024513 $94.05 
  Granted58 109.75 
  Exercised57 122.25 
  Forfeited / Expired4 124.53 
Outstanding at May 5, 2024510 $92.44 

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RSUs

The fair value of RSUs is equal to the closing price of the Company’s common stock on the date of grant and is expensed over the RSUs’ requisite service periods.

RSU activity for the thirteen weeks ended May 5, 2024 was as follows:
(In thousands, except per RSU data)RSUsWeighted Average Grant Date Fair Value Per RSU
Non-vested at February 4, 20241,175 $80.79 
  Granted472 109.75 
  Vested314 81.90 
  Forfeited41 82.94 
Non-vested at May 5, 20241,292 $91.02 

PSUs

PSU awards granted to employees have a three-year service period. Each award is subject to various performance and/or market conditions goals as follows:
Grant Year
Goal for 50% of the Award
Goal for 50% of the Award
2021Company total shareholder return (“TSR”) relative to a pre-established group of industry peers during a three-year period from the grant dateCompany’s earnings before interest and taxes (“EBIT”) during fiscal 2021
2022Company TSR relative to a pre-established group of industry peers during a three-year period from the grant dateCompany’s cumulative EBIT during a fiscal three-year performance period
2023Company TSR relative to a pre-established group of industry peers during a three-year period from the grant dateCompany’s average return on invested capital (“ROIC”) during a fiscal three-year performance period
2024Company TSR relative to a pre-established group of industry peers during a three-year period from the grant dateCompany’s average ROIC during a fiscal three-year performance period

The final number of shares to be earned, if any, is contingent upon the Company’s achievement of goals for the applicable performance period. For awards granted in 2021, the holders of the awards earned an aggregate of 55,000 shares. The Company achieved performance on the one-year EBIT measure above the maximum performance level. The Company achieved performance on the three-year TSR measure between the threshold and target levels.

The Company records expense ratably over the three-year service period, with expense determined as follows: (i) TSR-based portion of the awards is based on the grant date fair value regardless of whether the market condition is satisfied because the awards are subject to market conditions and (ii) EBIT- and ROIC-based portion of the awards are based on the grant date fair value per share and the Company’s current expectations of the probable number of shares that will ultimately be issued.

The grant date fair value of the awards is established as follows: (i) TSR-based portion of the awards uses a Monte Carlo simulation model and (ii) EBIT- and ROIC-based portion of the awards are based on the closing price of the Company’s common stock reduced for the present value of any dividends expected to be paid on such common stock during the three-year service period, as these contingently issuable PSUs do not accrue dividends.
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The following summarizes the assumptions used to estimate the fair value of PSUs subject to market conditions that were granted during the thirteen weeks ended May 5, 2024 and the resulting weighted average grant date fair value:
5/5/24
Weighted average risk-free interest rate4.71 %
Weighted average Company volatility48.28 %
Expected annual dividends per share$0.15 
Weighted average grant date fair value per PSU$138.12 

For certain of the awards granted, the after-tax portion of the award is subject to a holding period of one year after the vesting date. For these awards, the grant date fair value was discounted 4.40% for the restriction of liquidity, which was calculated using the Finnerty model.

Total PSU activity for the thirteen weeks ended May 5, 2024 was as follows:
(In thousands, except per PSU data)PSUsWeighted Average Grant Date Fair Value Per PSU
Non-vested at February 4, 2024236 $102.29 
  Granted127 122.76 
  Reduction due to market conditions achieved below target1 157.70 
  Vested55 124.12 
  Forfeited  
Non-vested at May 5, 2024307 $106.68 

12. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables present the changes in AOCL, net of related taxes, by component for the thirteen weeks ended May 5, 2024 and April 30, 2023:

(In millions)
Foreign currency translation adjustmentsNet unrealized and realized gain on effective cash flow hedgesTotal
Balance, February 4, 2024$(768.7)$15.1 $(753.6)
Other comprehensive (loss) income before reclassifications(10.7)
(1)
5.5 (5.2)
Less: Amounts reclassified from AOCL1.3 4.1 5.4 
Other comprehensive (loss) income(12.0)1.4 (10.6)
Balance, May 5, 2024$(780.7)$16.5 $(764.2)

(In millions)
Foreign currency translation adjustmentsNet unrealized and realized (loss) gain on effective cash flow hedgesTotal
Balance, January 29, 2023$(710.1)$(3.0)$(713.1)
Other comprehensive (loss) income before reclassifications(26.5)
(1)(2)
1.4 (25.1)
Less: Amounts reclassified from AOCL 

3.4 3.4 
Other comprehensive loss(26.5)(2.0)(28.5)
Balance, April 30, 2023$(736.6)$(5.0)$(741.6)

(1) Foreign currency translation adjustments included a net gain (loss) on net investment hedges of $4.1 million and $(9.8) million during the thirteen weeks ended May 5, 2024 and April 30, 2023, respectively.

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(2) Unfavorable foreign currency translation adjustments were principally driven by a strengthening of the United States dollar against certain currencies in the Asia-Pacific region (primarily the strengthening of the United States dollar against the Australian dollar), partially offset by a weakening of the United States dollar against the euro.

The following table presents reclassifications from AOCL to earnings for the thirteen weeks ended May 5, 2024 and April 30, 2023:

Amount Reclassified from AOCLAffected Line Item in the Company’s Consolidated Statements of Operations
Thirteen Weeks Ended
(In millions)5/5/244/30/23
Realized gain on effective cash flow hedges:
Foreign currency forward contracts (inventory purchases)$5.7 $4.8 Cost of goods sold
Less: Tax effect1.6 1.4 Income tax expense
Total, net of tax$4.1 $3.4 
Foreign currency translation adjustments:
Cross-currency swap contracts (net investment hedges)$1.7 $ Interest expense
Less: Tax effect0.4  Income tax expense
Total, net of tax$1.3 $ 

13. STOCKHOLDERS’ EQUITY

The Company’s Board of Directors has authorized over time beginning in 2015 an aggregate $5.0 billion stock repurchase program, which includes a $2.0 billion increase in the authorization and an extension through July 30, 2028 approved on March 27, 2024. Repurchases under the program may be made from time to time over the period through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as the Company deems appropriate. Purchases are made based on a variety of factors, such as price, corporate requirements and overall market conditions, applicable legal requirements and limitations, trading restrictions under the Company’s insider trading policy and other relevant factors. The program may be modified by the Board of Directors, including to increase or decrease the repurchase limitation or extend, suspend or terminate the program at any time, without prior notice. The Company’s share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act.

During the thirteen weeks ended May 5, 2024, the Company purchased 1.8 million shares of its common stock under the program in open market transactions for $200.0 million, excluding excise taxes of $1.7 million. The Company did not purchase any of its common stock under the program during the thirteen weeks ended April 30, 2023. As of May 5, 2024, the repurchased shares were held as treasury stock and $2.074 billion of the authorization remained available for future share repurchases, excluding excise taxes, as the excise taxes do not reduce the authorized amount remaining.

Treasury stock activity also includes shares that were withheld in conjunction with the settlement of RSUs to satisfy tax withholding requirements.

14. EXIT ACTIVITY COSTS

2022 Cost Savings Initiative

The Company announced in August 2022 that it would be taking steps to streamline its organization and simplify its ways of working. Included in this was a planned reduction in people costs in its global offices by approximately 10% by the end of 2023 to drive efficiencies and enable continued strategic investments to fuel growth, including in digital, supply chain and consumer engagement, which was completed. These reductions have resulted in annual cost savings of over $100 million, net of continued strategic people investments. In connection with this initiative, the Company recorded pre-tax costs of $81.5 million during 2022 and 2023. There were no costs incurred during the thirteen weeks ended April 30, 2023. All expected costs related to this initiative were incurred by the end of 2023.

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The pre-tax costs incurred in connection with the 2022 cost savings initiative were recorded in SG&A expenses of the Company’s segments as follows:
(In millions)
Cumulative Costs Incurred
Tommy Hilfiger North America$17.4 
Tommy Hilfiger International19.8
Calvin Klein North America13.7
Calvin Klein International14.3
Heritage Brands Wholesale10.4
Corporate (1)
5.9
Total$81.5 

(1) Corporate expenses are not allocated to any reportable segment.

Please see Note 16, “Segment Data,” for further discussion of the Company’s reportable segments.

The liabilities related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:
(In millions)
Liability at 2/4/24
Costs Paid During the Thirteen Weeks Ended 5/5/24
Liability at 5/5/24
Severance, termination benefits and other employee costs$20.4 $10.3 $10.1 

15. NET INCOME PER COMMON SHARE

The Company computed its basic and diluted net income per common share as follows:
Thirteen Weeks Ended
(In millions, except per share data)5/5/244/30/23
Net income$151.4 $136.0 
Weighted average common shares outstanding for basic net income per common share57.5 62.7 
Weighted average impact of dilutive securities0.9 0.8 
Total shares for diluted net income per common share58.4 63.5 
Basic net income per common share$2.63 $2.17 
Diluted net income per common share$