PVH Corp. (NYSE:PVH) shares fell about 24% on Thursday after the apparel company lowered its full-year revenue guidance, overshadowing better-than-expected first-quarter earnings and revenue.
The owner of the Calvin Klein and Tommy Hilfiger brands now expects full-year 2026 revenue to be approximately flat compared with the prior forecast for a slight increase. On a constant-currency basis, revenue is now expected to decline slightly, versus previous expectations for flat to slight growth.
The company said its updated forecast reflects the estimated prolonged effects of the conflict in the Middle East, partially offset by anticipated tariff refunds.
While PVH maintained its full-year non-GAAP operating margin outlook of approximately 8.8% and reaffirmed adjusted earnings guidance of $11.80 to $12.10 per share, the reduction in expected sales growth weighed on sentiment.
The company reported Q1 adjusted earnings of $2.01 per share, ahead of Wall Street expectations of about $1.81 per share.
Revenue came in at $2.03 billion, exceeding analysts' estimates of approximately $2.00 billion and rising 2.1% from a year earlier.
Inventory at the end of the quarter declined 5% year over year to $1.51 billion.
PVH highlighted continued strength in its direct-to-consumer business, with revenue in that segment increasing 6%, or 3% on a constant-currency basis, driven by growth across both physical stores and e-commerce platforms for Calvin Klein and Tommy Hilfiger.
PVH also pointed to ongoing investments in product innovation and consumer engagement during the quarter, citing growth in key product categories including Calvin Klein denim and underwear, as well as Tommy Hilfiger sweaters and outerwear. The company said it also expanded marketing efforts and continued investments in e-commerce and store renovations across its global footprint.
"As we look forward, we are balancing two opposing forces: on one side, the increasing brand and business momentum we are driving in both Calvin and TOMMY, and on the other, the prolonged effects of the Middle East conflict, which is putting pressure on the consumer in Europe, the Middle East and Africa (EMEA),” PVH CEO Stefan Larsson said in a statement.
“We are adjusting to the moment, while keeping our long-term approach to fueling our brand and business momentum.”