Release Date: April 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Stefan, can you talk about what you've learned from the quality of sales initiative in Europe and how the PVH+ Plan's elevated level of execution is impacting the business? A: Absolutely. Europe is a great story of progress. We took three focused quality of sales actions: stopped third-party sales on digital platforms, reduced the number of platforms we sold to, and improved inventory in relation to sales. We leaned into the PVH+ execution, strengthening product relevance and consumer engagement. This resulted in high-quality growth and stronger gross margins in D2C, with forward-looking wholesale order books strengthening season by season.
Q: Zac, as you look at the margin drivers for 2026, how should we think about the multi-year margin profile? Are there any new headwinds or tailwinds to consider? A: The actions planned throughout the year are within our control, such as confirmed European order books and cost actions underway. We expect fourth-quarter operating margin to be much higher than 2024, setting a new starting point for 2026. The building blocks laid out will raise the water level, allowing us to move forward into 2026 with improved profitability.
Q: How do you plan to connect product and engagement across different global regions, and what does marketing spend look like to drive this engagement? A: We focus on a systematic approach to bring product strength and consumer engagement together. For example, Calvin Klein's underwear campaign with Bad Bunny connects product innovation with talent amplification, resulting in increased traffic and sales. Marketing spend continues to be a top priority to support these initiatives.
Q: Can you elaborate on your relationship with wholesale partners in North America and your outlook for growth with the business brought back from G-III? A: We have strong partnerships with our wholesale partners, focusing on driving product strength and relevance. For instance, Calvin Klein's launch at Macy's Herald Square with marketing support from Lilly Collins has resonated well. We aim for consistency in driving product and brand relevance to the North American wholesale consumer.
Q: Could you elaborate on the recent change in North America and how you're planning inventory across DTC at both Calvin and Tommy over the year? A: We saw a step back from the consumer in February, with March showing slight improvement. Our inventory levels are more fresh and less aged than last year, with better investments in core essentials and hero products. We feel good about our inventory composition as we become more data- and demand-driven.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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