PVH CORP. /DE/ [PVH] Filings

10-Q 1 pvh-20240804.htm 10-Q pvh-20240804

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 ended		August 4, 2024

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number 001-07572


PVH CORP.
(Exact name of registrant as specified in its charter)

Delaware

13-1166910

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

285 Madison Avenue,

New York,

New York

10017

(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 class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1.00 par value	PVH	New York Stock Exchange
4.125% Senior Notes due 2029	PVH29	New 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 Filer

☒

Accelerated 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 August 30, 2024 was 55,814,098.

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


Item 1 - Financial Statements

Consolidated Statements of Operations for the Thirteen and Twenty -S ix Weeks Ended August 4 , 2024 and July 30, 2023			1

Consolidated Statements of Comprehensive Income for the Thirteen and Twenty-Six Weeks Ended August 4, 2024 and July 30, 2023			2

Consolidated Balance Sheets as of August 4 , 2024, February 4, 2024 and July 30, 2023			3

Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended August 4 , 2024 and July 30, 2023			4

Consolidated Statements of Changes in Stockholders’ Equity for the T wenty-S ix Weeks Ended August 4 , 2024 and July 30, 2023			5

Notes to Consolidated Financial Statements			7

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations			29

Item 3 - Quantitative and Qualitative Disclosures About Market Risk			40

Item 4 - Controls and Procedures			42

PART II -- OTHER INFORMATION


Item 1 - Legal Proceedings			43

Item 1A - Risk Factors			43

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds			43

Item 5 - Other Information			44

Item 6 - Exhibits			45

Signatures			47

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

PVH Corp.

Consolidated Statements of Operations

Unaudited

(In millions, except per share data)


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	August 4,		July 30,		August 4,		July 30,
	2024		2023		2024		2023
Net sales	$	1,965.1	$	2,105.2	$	3,815.3	$	4,156.3
Royalty revenue	87.7		80.1		168.9		164.8
Advertising and other revenue	21.5		21.7		42.0		43.8
Total revenue	2,074.3		2,207.0		4,026.2		4,364.9
Cost of goods sold (exclusive of depreciation and amortization)	828.4		934.7		1,581.6		1,842.3
Gross profit	1,245.9		1,272.3		2,444.6		2,522.6
Selling, general and administrative expenses	1,083.3		1,138.5		2,100.6		2,202.5

Non-service related pension and postretirement income	0.4		0.3		0.9		0.9
Other gain	—		—		10.0		—
Equity in net income of unconsolidated affiliates	10.9		9.2		24.1		21.1
Income before interest and taxes	173.9		143.3		379.0		342.1
Interest expense	22.8		25.9		46.1		51.2
Interest income	3.7		2.3		9.3		5.6
Income before taxes	154.8		119.7		342.2		296.5
Income tax (benefit) expense	(3.2)		25.5		32.8		66.3
Net income	$	158.0	$	94.2	$	309.4	$	230.2
Basic net income per common share	$	2.83	$	1.52	$	5.46	$	3.69
Diluted net income per common share	$	2.80	$	1.50	$	5.39	$	3.65

See accompanying notes.

PVH Corp.

Consolidated Statements of Comprehensive Income

Unaudited

(In millions)


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	August 4,		July 30,		August 4,		July 30,
	2024		2023		2024		2023

Net income	$	158.0	$	94.2	$	309.4	$	230.2
Other comprehensive income (loss):
Foreign currency translation adjustments	12.7		21.1		(2.1)		4.4
Net unrealized and realized (loss) gain related to effective cash flow hedges, net of tax benefit of $2.6, $0.1, $2.3, and $0.5	(7.2)		0.3		(5.8)		(1.7)
Net loss on net investment hedges, net of tax benefit of $5.3, $1.0, $ 4.4, and $4.2	(16.1)		(2.9)		(13.3)		(12.7)
Total other comprehensive (loss) income	(10.6)		18.5		(21.2)		(10.0)
Comprehensive income	$	147.4	$	112.7	$	288.2	$	220.2

See accompanying notes.

PVH Corp.

Consolidated Balance Sheets

(In millions, except share and per share data)


	August 4,		February 4,		July 30,
	2024		2024		2023
	UNAUDITED		AUDITED		UNAUDITED
ASSETS
Current Assets:
Cash and cash equivalents	$	610.0	$	707.6	$	372.8
Trade receivables, net of allowances for credit losses of $43.2, $41.1 and $42.0	889.7		793.3		889.2
Other receivables	17.2		13.9		20.8
Inventories, net	1,582.8		1,419.7		1,795.5
Prepaid expenses	234.6		237.7		256.0
Other	80.1		87.5		79.8

Total Current Assets	3,414.4		3,259.7		3,414.1
Property, Plant and Equipment, net	806.9		862.6		876.0
Operating Lease Right-of-Use Assets	1,224.0		1,213.8		1,291.2
Goodwill	2,333.9		2,322.1		2,354.7
Tradenames	2,608.9		2,599.1		2,713.1

Other Intangibles, net	481.7		498.3		518.7
Other Assets, including deferred taxes of $28.7, $33.8 and $24.1	367.9		417.3		374.6
Total Assets	$	11,237.7	$	11,172.9	$	11,542.4

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,200.9	$	1,073.4	$	1,242.9
Accrued expenses	676.2		776.2		773.6
Deferred revenue	61.0		55.5		74.4
Current portion of operating lease liabilities	302.8		288.9		328.6
Short-term borrowings	8.4		—		15.2
Current portion of long-term debt	510.8		577.5		688.9

Total Current Liabilities	2,760.1		2,771.5		3,123.6
Long-Term Portion of Operating Lease Liabilities	1,069.1		1,075.8		1,136.9
Long-Term Debt	1,668.2		1,591.7		1,619.6
Other Liabilities, including deferred taxes of $328.5, $346.1 and $321.3	548.5		615.0		624.7

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; 89,045,598; 88,567,275 and 88,161,386 shares issued	89.0		88.6		88.2
Additional paid-in capital - common stock	3,347.1		3,313.3		3,271.4
Retained earnings	5,712.4		5,407.3		4,978.5
Accumulated other comprehensive loss	(774.8)		(753.6)		(723.1)
Less: 33,150,579; 30,934,587 and 27,481,695 shares of common stock held in treasury, at cost	(3,181.9)		(2,936.7)		(2,577.4)
Total Stockholders’ Equity	5,191.8		5,118.9		5,037.6
Total Liabilities and Stockholders’ Equity	$	11,237.7	$	11,172.9	$	11,542.4

See accompanying notes.

PVH Corp.

Consolidated Statements of Cash Flows

Unaudited

(In millions)


	Twenty-Six Weeks Ended
	August 4,		July 30,
	2024		2023
OPERATING ACTIVITIES
Net income	$	309.4	$	230.2
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization	141.9		147.8
Equity in net income of unconsolidated affiliates	(24.1)		(21.1)
Deferred taxes	(7.3)		(22.1)
Stock-based compensation expense	26.9		27.4



Other gain	(10.0)		—
Changes in operating assets and liabilities:
Trade receivables, net	(91.4)		36.2
Other receivables	3.5		0.9
Inventories, net	(155.3)		1.2
Accounts payable, accrued expenses and deferred revenue	37.5		(153.0)
Prepaid expenses	4.0		(45.9)

Other, net	(9.4)		(5.4)
Net cash provided by operating activities	225.7		196.2
INVESTING ACTIVITIES

Purchases of property, plant and equipment	(75.4)		(115.9)



Proceeds from sale of Warner’s, Olga and True&Co. women’s intimates businesses	2.5		—


Purchases of investments held in rabbi trust	(3.0)		(2.4)
Proceeds from investments held in rabbi trust	0.4		0.9
Proceeds from cross-currency swap contracts (net investment hedges)	3.5		—
Net cash used by investing activities	(72.0)		(117.4)
FINANCING ACTIVITIES
Net proceeds from (payments on) short-term borrowings	8.3		(28.8)




Repayment of 2022 facilities	(5.9)		(6.0)

Net proceeds from settlement of awards under stock plans	7.3		0.1
Proceeds from 4 1/8% senior notes, net of related fees	553.1		—
Redemption of 3 5/8% senior notes	(561.7)		—
Cash dividends	(4.3)		(4.8)
Acquisition of treasury shares	(245.4)		(214.2)
Payments of finance lease liabilities	(2.2)		(2.5)

Net cash used by financing activities	(250.8)		(256.2)
Effect of exchange rate changes on cash and cash equivalents	(0.5)		(0.5)
Decrease in cash and cash equivalents	(97.6)		(177.9)
Cash and cash equivalents at beginning of period	707.6		550.7
Cash and cash equivalents at end of period	$	610.0	$	372.8

See accompanying notes.

PVH Corp.

Consolidated Statements of Changes in Stockholders’ Equity

Unaudited

(In millions, except share and per share data)


	Twenty-Six Weeks Ended July 30, 2023

			Common Stock			Additional 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 income								136.0						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 income														107.5


Settlement of awards under stock plans			132,809	0.2		(0.1)								0.1

Stock-based compensation expense						13.1								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
Net income								94.2						94.2
Foreign currency translation adjustments										21.1				21.1
Net unrealized and realized gain related to effective cash flow hedges, net of tax benefit of $0.1										0.3				0.3
Net loss on net investment hedges, net of tax benefit of $1.0										(2.9)				(2.9)
Comprehensive income														112.7


Settlement of awards under stock plans			386,966	0.4		(0.4)								—

Stock-based compensation expense						14.3								14.3
Dividends declared ($0.0375 per common share)								(2.4)						(2.4)
Acquisition of 2,495,371 treasury shares, including excise taxes of $1.7												(213.4)		(213.4)



July 30, 2023	$	—	88,161,386	$	88.2	$	3,271.4	$	4,978.5	$	(723.1)	$	(2,577.4)	$	5,037.6

PVH Corp.

Consolidated Statements of Changes in Stockholders’ Equity (continued)

Unaudited

(In millions, except share and per share data)


	Twenty-Six Weeks Ended August 4, 2024

			Common Stock			Additional 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 income								151.4						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 income														140.8


Settlement of awards under stock plans			337,076	0.3		6.7								7.0

Stock-based compensation expense						10.5								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
Net income								158.0						158.0
Foreign currency translation adjustments										12.7				12.7
Net unrealized and realized loss related to effective cash flow hedges, net of tax benefit of $2.6										(7.2)				(7.2)
Net loss on net investment hedges, net of tax benefit of $5.3										(16.1)				(16.1)
Comprehensive income														147.4


Settlement of awards under stock plans			141,247	0.1		0.2								0.3

Stock-based compensation expense						16.4								16.4

Acquisition of 273,268 treasury shares, including excise taxes of $0.2												(31.5)		(31.5)


August 4, 2024	$	—	89,045,598	$	89.0	$	3,347.1	$	5,712.4	$	(774.8)	$	(3,181.9)	$	5,191.8

See accompanying notes.

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 women’s intimates businesses conducted under the Warner’s, Olga and True&Co. trademarks 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 and twenty-six weeks ended August 4, 2024 and July 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 and the war in Ukraine. 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 half of 2024, and are not expected to have a material impact on the Company’s business for the remainder of 2024.

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 August 4, 2024, the contractual minimum fees on the portion of all license agreements not yet satisfied totaled $696.9 million, of which the Company expects to recognize $140.5 million as revenue during the remainder of 2024, $231.2 million in 2025 and $325.2 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 twenty-six weeks ended August 4, 2024 and July 30, 2023 were as follows:


	Twenty-Six Weeks Ended
(In millions)	8/4/24		7/30/23
Deferred revenue balance at beginning of period	$	55.5	$	54.3

Net additions to deferred revenue during the period	52.3		62.4
Reductions in deferred revenue for revenue recognized during the period (1)	(46.8)		(42.3)

Deferred revenue balance at end of period	$	61.0	$	74.4

(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 amounts include $6.8 million and $2.8 million of revenue recognized during the thirteen weeks ended August 4, 2024 and July 30, 2023, respectively.

The Company also had long-term deferred revenue liabilities included in other liabilities in its Consolidated Balance Sheets of $8.1 million, $9.4 million and $10.8 million as of August 4, 2024, February 4, 2024 and July 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 women’s intimates businesses conducted under the Warner’s, Olga and True&Co. trademarks 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.

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 is being paid in installments to the Company through the first quarter of 2025. The Company received $2.5 million of the earnout during the second quarter of 2024. 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 twenty-six weeks ended August 4, 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 America		Calvin Klein International		Tommy Hilfiger North America		Tommy Hilfiger International		Total
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	—		(1.8)		—		13.6		11.8
Balance as of August 4, 2024
Goodwill, gross	781.8		875.6		203.0		1,571.9		3,432.3
Accumulated impairment losses	(449.9)		(471.3)		(177.2)		—		(1,098.4)
Goodwill, net	$	331.9	$	404.3	$	25.8	$	1,571.9	$	2,333.9

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 twenty-six weeks ended August 4, 2024 that would indicate the remaining carrying amount of the Company’s goodwill and other intangible assets may be impaired as of August 4, 2024.

6. RETIREMENT AND BENEFIT PLANS

The Company, as of August 4, 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.”

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 Plans				Pension Plans
	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(In millions)	8/4/24		7/30/23		8/4/24		7/30/23

Service cost	$	3.2	$	5.8	$	6.9	$	10.8
Interest cost	7.1		7.4		14.3		14.6
Expected return on plan assets	(8.1)		(8.4)		(16.4)		(16.9)






Total	$	2.2	$	4.8	$	4.8	$	8.5


	SERP Plans				SERP Plans
	Thirteen Weeks Ended				Twenty-Six Weeks Ended
(In millions)	8/4/24		7/30/23		8/4/24		7/30/23

Service cost	$	0.3	$	0.4	$	0.5	$	0.8
Interest cost	0.6		0.7		1.2		1.4







Total	$	0.9	$	1.1	$	1.7	$	2.2

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 and twenty-six weeks ended August 4, 2024 and July 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 August 4, 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 $195.4 million based on exchange rates in effect on August 4, 2024 and are utilized primarily to fund working capital needs. The Company had $8.4 million outstanding under these facilities as of August 4, 2024. The weighted average interest rate on funds borrowed as of August 4, 2024 was 3.36%.

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 August 4, 2024.

Long-Term Debt

The carrying amounts of the Company’s long-term debt were as follows:


(In millions)	8/4/24		2/4/24		7/30/23

Senior unsecured Term Loan A facility due 2027 (1)	$	461.2	$	461.6	$	477.3

7 3/4% debentures due 2023	—		—		100.0
3 5/8% senior unsecured euro notes due 2024 (1)	—		565.7		576.8
4 5/8% senior unsecured notes due 2025	498.8		498.2		497.6
3 1/8% senior unsecured euro notes due 2027 (1)	651.5		643.7		656.8
4 1/8% senior unsecured euro notes due 2029 (1)	567.5		—		—
Total	2,179.0		2,169.2		2,308.5
Less: Current portion of long-term debt	510.8		577.5		688.9
Long-term debt	$	1,668.2	$	1,591.7	$	1,619.6

(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 August 4, 2024, February 4, 2024 and July 30, 2023.

The Company’s mandatory long-term debt repayments for the remainder of 2024 through 2029 were as follows as of August 4, 2024:


(In millions)
Fiscal Year	Amount (1)
Remainder of 2024	$	6.0
2025	512.0
2026	12.0
2027	1,087.3
2028	—
2029	572.8

(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 August 4, 2024 because the carrying amount reflects the unamortized portions of debt issuance costs and the original issue discounts.

As of August 4, 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.

The Company made payments totaling $5.9 million and $6.0 million on its term loan under the 2022 facilities during the twenty-six weeks ended August 4, 2024 and July 30, 2023, respectively.

The current applicable margin with respect to the Euro TLA facility as of August 4, 2024 was 1.250%. The current applicable margin with respect to the revolving credit facilities as of August 4, 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 paid €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.

The Company’s financing arrangements contain financial and non-financial covenants and customary events of default. As of August 4, 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 and bank guarantees primarily to collateralize the Company’s insurance and lease obligations. The Company had $85.2 million of these standby letters of credit and bank guarantees outstanding as of August 4, 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 August 4, 2024 and July 30, 2023 were (2.1)% and 21.3%, respectively. The effective income tax rates for the twenty-six weeks ended August 4, 2024 and July 30, 2023 were 9.6% and 22.4%, respectively.

The effective income tax rates for the thirteen and twenty-six weeks ended August 4, 2024 were lower than the prior year periods primarily due to a favorable change in the Company’s uncertain tax positions resulting in a benefit to the Company’s 2024 effective income tax rate of 21.2% and 9.6% in the thirteen and twenty-six week periods, respectively, from the settlement of a multi-year audit in an international jurisdiction.

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 its 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 $1,234.0 million and $1,218.9 million, respectively, as of August 4, 2024, $1,201.6 million and $1,209.4 million, respectively, as of February 4, 2024 and $1,199.1 million and $1,233.6 million, respectively, as of July 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 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:


	Assets												Liabilities
	8/4/24				2/4/24				7/30/23				8/4/24				2/4/24				7/30/23
(In millions)	Other Current Assets		Other Assets		Other Current Assets		Other Assets		Other Current Assets		Other Assets		Accrued Expenses		Other Liabilities		Accrued Expenses		Other Liabilities		Accrued Expenses		Other Liabilities
Contracts designated as cash flow and net investment hedges:
Foreign currency forward contracts (inventory purchases)	$	7.4	$	0.2	$	13.2	$	0.5	$	6.7	$	—	$	1.9	$	0.4	$	2.4	$	0.4	$	21.8	$	1.4


Cross-currency swap contracts (net investment hedges)	1.1		—		6.4		—		—		—		—		—		—		1.3		—		—
Undesignated contracts:
Foreign currency forward contracts	1.0		—		1.9		—		0.2		—		4.6		—		1.1		—		4.3		—


Total	$	9.5	$	0.2	$	21.5	$	0.5	$	6.9	$	—	$	6.5	$	0.4	$	3.5	$	1.7	$	26.1	$	1.4

The notional amount outstanding of foreign currency forward contracts was $1,345.5 million at August 4, 2024. Such contracts expire principally between August 2024 and January 2026.

The following tables summarize the effect of the Company’s hedges designated as cash flow and net investment hedging instruments:


	(Loss) Gain Recognized in Other Comprehensive (Loss) Income

(In millions)

Thirteen Weeks Ended	8/4/24		7/30/23
Foreign currency forward contracts (inventory purchases)	$	(3.5)	$	5.6

Foreign currency borrowings (net investment hedges)	(16.8)		(3.9)
Cross-currency swap contracts (net investment hedges)	(2.8)		—
Total	$	(23.1)	$	1.7

Twenty-Six Weeks Ended	8/4/24		7/30/23
Foreign currency forward contracts (inventory purchases)	$	3.9	$	8.0

Foreign currency borrowings (net investment hedges)	(13.7)		(16.9)
Cross-currency swap contracts (net investment hedges)	(0.5)		—
Total	$	(10.3)	$	(8.9)


	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 Reclassified				Location	Total Statements of Operations Amount

Thirteen Weeks Ended	8/4/24		7/30/23			8/4/24		7/30/23
Foreign currency forward contracts (inventory purchases)	$	6.3	$	5.4	Cost of goods sold	$	828.4	$	934.7


Cross-currency swap contracts (net investment hedges)	1.8		—		Interest expense	22.8		25.9
Total	$	8.1	$	5.4

Twenty-Six Weeks Ended	8/4/24		7/30/23			8/4/24		7/30/23
Foreign currency forward contracts (inventory purchases)	$	12.0	$	10.2	Cost of goods sold	$	1,581.6	$	1,842.3


Cross-currency swap contracts (net investment hedges)	3.5		—		Interest expense	46.1		51.2
Total	$	15.5	$	10.2

A net gain in AOCL on foreign currency forward contracts at August 4, 2024 of $12.6 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)	Loss Recognized in SG&A Expenses
Thirteen Weeks Ended	8/4/24		7/30/23

Foreign currency forward contracts (1)	$	(3.6)	$	(1.8)

Twenty-Six Weeks Ended	8/4/24		7/30/23

Foreign currency forward contracts (1)	$	(2.2)	$	(2.8)

(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 August 4, 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.

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:


	8/4/24							2/4/24							7/30/23
(In millions)	Level 1		Level 2		Level 3	Total		Level 1		Level 2		Level 3	Total		Level 1		Level 2		Level 3	Total
Assets:
Foreign currency forward contracts	N/A		$	8.6	N/A	$	8.6	N/A		$	15.6	N/A	$	15.6	N/A		$	6.9	N/A	$	6.9
Cross-currency swap contracts (net investment hedges)	N/A		1.1		N/A	1.1		N/A		6.4		N/A	6.4		N/A		N/A		N/A	N/A
Rabbi trust assets	13.2		N/A		N/A	13.2		9.9		N/A		N/A	9.9		9.4		N/A		N/A	9.4



Total Assets	$	13.2	$	9.7	N/A	$	22.9	$	9.9	$	22.0	N/A	$	31.9	$	9.4	$	6.9	N/A	$	16.3

Liabilities:
Foreign currency forward contracts	N/A		$	6.9	N/A	$