PVH Corp. (NYSE:PVH), which owns the clothing brands Calvin Klein and Tommy Hilfiger, saw its shares plummet almost 12% on Thursday as it warned of continued tariff impacts despite a third quarter earnings beat.
The apparel company reported revenue of $2.29 billion for the fiscal third quarter, a 2% increase from a year earlier and ahead of its guidance for flat to slightly higher sales. This was ahead of Wall Street estimates of $2.27 billion.
Earnings also came in stronger than anticipated. Adjusted earnings per share (EPS) were $2.83, beating both the company’s own forecast of $2.35 to $2.50 and Wall Street estimates of about $2.54.
Despite the topline and earnings beat, PVH narrowed its full-year guidance, reflecting continuing pressure from US import tariffs and uneven consumer demand.
The company now expects full-year revenue to rise in the low single digits, tightening its prior forecast of “increase slightly to up low single digits.” On a constant-currency basis, PVH reaffirmed its view for sales to be flat to slightly higher.
The company also narrowed its full-year adjusted EPS forecast to $10.85 to $11, compared with a previous range of $10.75 to $11. The outlook reflects a still-material but improving tariff burden.
PVH now anticipates a net negative tariff impact of about $1.05 per share, down from roughly $1.15 previously, partly offset by ongoing mitigation efforts. The company continues to expect a positive foreign-exchange impact of about $0.45 per share.
UBS analysts remain positive on PVH post-earnings, reiterating their ‘Buy’ rating and $148 price target, which they noted was 69% above the stock price at their time of writing.
The analysts wrote that they believe PVH has the “brand strength and balance sheet to drive earnings growth over the long term, despite macro headwinds,” and expect the company to deliver a double-digit EPS compound annual growth rate (CAGR) after fiscal 2025.
The UBS team emphasized that investor focus should shift to next year, writing that “fiscal 2026 is what matters,” and arguing the quarter shows encouraging progress toward strong double-digit EPS growth potential.
They also highlighted PVH’s substantial share repurchases, with its share count falling 15% year over year, and wrote that they expect the company to use strong cash flow to continue buying back stock early in fiscal 2026.
Among the key trends they identified were an improving sales picture in Asia, especially China; steady if uneven progress in Europe, where spring 2026 wholesale orders point to low-single-digit year-over-year growth; and inventories that appear aligned with sales growth once tariff effects are excluded. UBS wrote that this alignment is important because it indicates PVH is fixing the supply chain issues that weighed on margins earlier in the year.
The analysts also noted that PVH essentially held its full-year outlook steady, with the third-quarter beat driven largely by SG&A timing.
They pointed to the company’s comments that fourth-quarter-to-date and Thanksgiving weekend sales in both the US and Europe were “on plan.”
Further, UBS noted the gross margin miss resulted from “the timing of the sale of high tariff goods,” describing it as a one-off issue rather than a sign of broader deterioration.