PVH Corp. PVH posted second-quarter fiscal 2026 adjusted earnings of $3.70 per share, up 46.8% from $2.52 a year earlier and 20.1% above the Zacks Consensus Estimate of $3.08. The result included an approximately $1.80-per-share benefit from tariff refunds.
Revenues fell 3.2% year over year to $2.097 billion and were in line with the consensus mark. Owned and operated digital commerce revenues rose 4% year over year, while gross margin benefited from tariff refunds and lower product costs.
Over the past three months, shares of this Zacks Rank #3 (Hold) stock have lost 7.5% compared with the industry’s 0.8% decline.
PVH’s Regional Sales Show Mixed Trends
Europe, the Middle East and Africa revenues declined 6% year over year to $986.3 million, with weakness primarily stemming from the wholesale channel. The region continued to face soft consumer demand related to the prolonged effects of the Middle East conflict and broader macroeconomic pressures. Direct-to-consumer digital growth was more than offset by lower store revenues.
Americas revenues slipped 1% year over year to $680.1 million as a slight DTC increase was outweighed by lower wholesale sales. Asia-Pacific revenues rose 3% year over year to $343.7 million, or 1% at constant currency, on DTC growth. Licensing revenues fell 13% to $86.9 million due to planned North America license transitions.
PVH Corp. Price, Consensus and EPS Surprise
PVH Corp. price-consensus-eps-surprise-chart | PVH Corp. Quote
PVH Corp. Builds DTC and Digital Momentum
Tommy Hilfiger revenues were approximately flat year over year at $1.132 billion, including an approximately 3% lift from bringing previously licensed women’s categories in-house in the Americas. Calvin Klein revenues fell 7% to $913.3 million, including an approximately 4% drag from wholesale shipment timing in the Americas.
The Zacks Consensus Estimate for Tommy Hilfiger and Calvin Klein revenues is pegged at $1.108 billion and $953 million, respectively, for the second quarter of fiscal 2026.
By channel, DTC revenues were approximately flat year over year. Owned and operated store revenues fell 1%, while digital commerce advanced 4%, or 3% at constant currency. Wholesale revenues declined 6% across all regions.
PVH Margins Get a Lift From Tariff Refunds
Gross margin increased 530 basis points to 63% from 57.7%. The expansion included about 510 basis points from $107 million of tariff refunds. The remaining improvement reflected lower product costs, including favorable foreign exchange and a better mix, partly offset by promotions in EMEA, higher net tariff costs and North America license transitions.
Adjusted EBIT rose 30.5% to $232.6 million from $178.2 million, lifting adjusted operating margin by 290 basis points year over year to 11.1% from 8.2%. Adjusted SG&A expenses increased 1.7% to $1.1 billion. PVH continued targeted marketing and brand-building investments while maintaining cost discipline.
PVH Ends Q2 With Higher Cash and Lower Inventory
Inventory decreased 3% year over year to $1.7 billion. PVH ended the quarter with $965.9 million in cash and cash equivalents, up from $248.8 million a year earlier. Long-term debt totaled $2.2 billion, while stockholders’ equity was $4.8 billion.
Net cash provided by operating activities reached $336.4 million in the first six months of fiscal 2026, up from $141.7 million a year earlier. Capital expenditures totaled $76 million. The company made no common stock repurchases under its repurchase program in the first six months and expects at least $300 million of repurchases for fiscal 2026.
PVH Reaffirms Fiscal 2026 Outlook
For fiscal 2026, PVH continues to expect revenues to be approximately flat on a reported basis and down slightly at constant currency. Adjusted operating margin is still projected at approximately 8.8%, while adjusted earnings are forecast at $11.80-$12.10 per share compared with $11.40 a year ago. The outlook includes an estimated 40-cent favorable foreign-currency impact.
For the third quarter, revenues are projected to decline in the low single digits, with an adjusted operating margin of about 7.5%. Adjusted earnings are expected at $2.50-$2.65 per share, down from $2.83 recorded in the prior-year period. Management also plans higher year-over-year marketing investment in the fiscal third quarter to aid growth.
Key Picks in the Consumer Discretionary Space
Duluth Holdings Inc. DLTH, which deals in casual wear, workwear and accessories for men and women, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Duluth Holdings delivered a trailing four-quarter earnings surprise of 107.5%, on average. The Zacks Consensus Estimate for DLTH’s current financial-year EPS indicates a rise of 39.5% from the year-ago number.
Columbia Sportswear COLM engages in marketing and distribution of outdoor and active lifestyle apparel, footwear and accessories, and currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for COLM’s current financial-year sales is expected to rise 1.9% from the corresponding year-ago reported figure. COLM delivered a trailing four-quarter earnings surprise of 36%, on average.
Ralph Lauren Corporation RL, which is a designer and marketer of premium lifestyle products, currently carries a Zacks Rank of 2.
RL delivered a trailing four-quarter earnings surprise of 8.7%, on average. The Zacks Consensus Estimate for Ralph Lauren’s current financial-year sales indicates growth of 7.6% from the year-ago number.
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PVH Corp. (PVH): Free Stock Analysis Report
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Duluth Holdings Inc. (DLTH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).