American clothing company Phillips-Van Heusen (PVH) Corporation is expecting pressure on its core profitability outlook as rising tariff headwinds and a challenging macroeconomic environment weigh on margins, even as the company maintained modest growth in 2025.
For 2026, PVH projects revenue to increase slightly, with non-GAAP operating margins projected to remain stable at around 8.8 per cent. However, the outlook incorporates a significant tariff burden, estimated to reduce EBIT by approximately $195 million, alongside continued mitigation efforts. Non-GAAP EPS is projected in the range of $11.8 to $12.1, supported partly by favourable currency movements.
Melissa Stone, interim chief financial officer, PVH Corp, said, “As we look towards 2026, we expect to deliver operating margins consistent with 2025, including modest gross margin expansion, despite the inclusion of a full year of tariffs, and strong expansion on an underlying basis.”
Strong Q4 performance lifts margins despite tariff impact
Meanwhile, in Q4 2025 ended February 1, 2026, revenue rose 6 per cent to $2.5 billion, beating expectations, while non-GAAP EPS reached $3.82, well above guidance. Operating margin for the quarter improved to 10 per cent on a non-GAAP basis, despite a 170 basis point tariff impact, reflecting improved cost discipline and operational execution.
Stefan Larsson, CEO at PVH Corp, commented, “We delivered a strong fourth quarter and finish to the year, driven by the strength of our two iconic global brands, Calvin Klein and Tommy Hilfiger, and the continued disciplined execution of our PVH+ Plan. In the fourth quarter, we beat our guidance across revenue, operating margin and EPS on a non-GAAP basis.”
Region-wise, the Americas and Europe, Middle East and Africa (EMEA) recorded growth in Q4, supported by wholesale strength and brand initiatives, while Asia-Pacific (APAC) declined due to softer demand and timing impacts related to the Lunar New Year. Direct-to-consumer (DTC) performance remained mixed, with modest gains offset by weakness in physical retail, while digital commerce continued to show gradual improvement.
The company reported full-year 2025 revenue of $8.95 billion, marking a 3 per cent increase year on year (YoY). However, on a constant currency basis, revenue rose less than 1 per cent, reflecting muted underlying demand across key markets, PVH said in a press release.
On the earnings front, PVH posted GAAP earnings per share (EPS) of $0.52, sharply lower than the prior year due to one-off items including impairment charges. On a non-GAAP basis, EPS stood at $11.4, exceeding revised guidance of $10.85 to $11, though falling short of earlier projections issued in 2024.
Fibre2Fashion News Desk (SG)
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