Q4 2024 PVH Corp Earnings Call

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Operator: Good morning, everyone, and welcome to today's PVH fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen only mode. Later, you will have an opportunity to ask questions during the question and answer session.

Speaker Change: Good morning, everyone and welcome to todays PVH fourth quarter and full year 2024 earnings conference call.

At this time all participants are in a listen only mode.

Speaker Change: You will have an opportunity to ask questions. During the question and answer session. You May Register to ask a question at any time by pressing the star and one key on your Touchtone phone. Please note. This call may be recorded and then I will be standing by should you need any assistance. It is now my pleasure to turn the program over to Cheryl Freeman Senior Vice President of Investor Relations.

Operator: You may register to ask a question at any time by pressing the star and one key on your touchtone phone. Please note this call may be recorded and that I will be standing by should you need any assistance.

Sheryl Freeman: It is now my pleasure to turn the program over to Sheryl Freeman, Senior Vice President of Investor Relations. Please go ahead. Thank you, operator.

Speaker Change: Go ahead.

Cheryl Freeman: Thank you operator, good morning, everyone and welcome to the PVH Corp, fourth quarter and full year 'twenty 'twenty four earnings conference call, leading the call today will be Stefan Larsson, Chief Executive Officer, and Zach Coghlan Chief Financial Officer.

Sheryl Freeman: Good morning, everyone, and welcome to the PBH Corp fourth quarter and full year 2024 earnings conference call.

Operator: Leading the call today will be Stefan Larsson, Chief Executive Officer, and Zach Coughlin, Chief Financial This webcast and conference call is being recorded on behalf of PVH and consists of copyrighted material. It may not be recorded, rebroadcast, or otherwise transmitted without PVH's written permission. Your participation constitutes your consent to having anything you say appear in any transcript or replay of the webinar.

Speaker Change: This webcast and conference call is being recorded on behalf of PVH and consist of copyrighted material. It may.

Speaker Change: Not be recorded rebroadcast or otherwise transmitted without pvh's written permission your participation constitutes your consent to having anything you say appear on any transcript or replay of this call. The information to be discussed includes forward looking statements that reflect pvh's view as of March 31, 2025 of future events.

Sheryl Freeman: The information to be discussed includes forward-looking statements that reflect PVH's view, as of March 31, 2025, of future events and financial performance. These statements are subject to risks and uncertainties indicated in the company's SEC filings, and the safe harbor statement included in the press release that is the subject of the statement. These include PVH's right to change its strategies, objectives, expectations, and intentions, and the company's ability to realize anticipated benefits and savings from divestitures, restructurings, and similar plans, such as the Headcount Cost Reduction Initiative announced in August 2022, the 2021 sale of Assets of and Exits From its Heritage Brands menswear and retail businesses, the November 2023 sale of the Heritage Brands women's intimate apparel business to focus on its Calvin Klein and Tommy Hilfiger businesses, and its current multi-year initiative to simplify its operating costs.

Speaker Change: Financial performance. These statements are subject to risks and uncertainties indicated in the Companys SEC filings and the Safe Harbor statement included in the press release that is the subject of this call. These include Pvh's right to change its strategies objectives expectations and intentions and the companys ability to realize the anticipated benefits and savings from that.

Speaker Change: That's the truth restructures and similar plans such as the head count cost reduction initiative announced in August 2022, the 2021 selling assets at an exit from its heritage brands menswear and retail businesses.

Speaker Change: Remember 2023 sale of the heritage brands Womens intimate apparel business to focus on is Calvin Klein and Tommy Hilfiger businesses and its current and multi year initiative to simplify our operating model PVH does not undertake any obligation to update publicly any forward looking statement, including without limitation any estimates regarding rep.

Sheryl Freeman: PVH does not undertake any obligation to update publicly any forward-looking statement, including without limitation, any estimates regarding revenue or earnings.

Speaker Change: Venue or earnings generally the financial information and projections to be discussed will be on a non-GAAP basis as defined under SEC rules reconciliations to GAAP amounts are included in PVH as fourth quarter 2024 earnings release, which can be found on www dot PVH dot com and in the company's current report on form 8-K.

Sheryl Freeman: Generally, the financial information and projections to be discussed will be on a non-GAAP basis as defined under SEC Regulations.

Sheryl Freeman: Reconciliations to GAAP amounts are included in PVH's fourth quarter 2024 earnings release, which can be found on www.pvh.com and in the company's current report on Form 8K, furnished to the SEC in connection with the release.

Speaker Change: <unk> furnished to the SEC in connection with the release at this time I am pleased to turn the conference over to Stefan Larsson.

Stefan Larsson: At this time, I am pleased to turn the conference over to Stefan Larsson. Thank you, Sheryl. Good morning, everyone, and thank you for joining our call today. I want to start by thanking our teams around the world for delivering a strong fourth quarter and finish to the year. Through the strength of our two iconic global brands, Calvin Klein and Tommy Hilfiger, and the disciplined execution of our multi-year brand building growth plan, the PVH Plus plan, we over-delivered on both the top and bottom line versus our initial fiscal 2024 guidance. with stronger-than-expected revenue on a constant currency basis and higher-than-expected non-GAAP EPS.

Stefan Larsson: Thank you Cheryl good morning, everyone and thank you for joining our call today I want to start by thanking our teams around the world for delivering a strong fourth quarter and finish to the year.

Stefan Larsson: Through the strength of our two iconic global brands, Calvin Klein and Tommy Hilfiger, and the disciplined execution of our multi year brand building growth plan the Pvs plus.

Stefan Larsson: We over delivered on both the top and bottom line versus our initial fiscal 2024 guidance with stronger than expected revenue on a constant currency basis and higher than expected non-GAAP EPS.

Stefan Larsson: In addition, we increased our gross margin by 120 basis points to a new record, and even with the fixed cost deleveraging from our Europe business, we maintained our double-digit EBIT margins at 10% as we focused on driving cost efficiencies across For more information visit www.fema.gov For the fourth quarter, we delivered a strong holiday performance that beat our expectations. On a constant currency basis, we drove low single digit revenue growth, with growth in both our D2C and wholesale channels, excluding the sale of our heritage business and the 53rd week in 2022. which supports our planned return to growth during 2020.

Stefan Larsson: In addition, we increased our gross margin by 120 basis points to a new record and even with the fixed cost deleveraging from our Europe business, we maintained our double digit EBIT margins at 10% as we focus on driving cost efficiencies across the company.

Stefan Larsson: For the fourth quarter, we delivered a strong holiday performance that beat our expectations on a constant currency basis, we drove low single digit revenue growth with growth in both our D to C and wholesale channels, excluding the sale of our heritage business and the 50 <unk> week in 2023.

Stefan Larsson: Which supports our planned return to growth during 2025.

Stefan Larsson: 2024 marked a major step towards our vision to build Calvin and Tommy into the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our. We connected both Calvin and Tommy to the site guys through our marketing, driving a record consumer engagement. We improve the relevance of sell-through of our fall 24 product assortment across both. We're turning Europe back to growth with improved performance in both D2C and wholesale, where we drove two consecutive quarters of growth in our stores, as well as moving our European wholesale order books back to growth.

2024 marks a major step towards our vision to build Calvin and Tommy into the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our sector.

Stefan Larsson: We connected both Calvin and Tommy to decide guys through our marketing driving our record consumer engagement, we improved our relevance as sell through of our fall 'twenty four product assortment across both fronts, returning Europe back to growth with improved performance in both D.

Stefan Larsson: To see in wholesale where we drove two consecutive quarters of growth in our stores as well as moving our European wholesale order books back to growth.

Stefan Larsson: Despite the tough macro, we kept Asia growing on a constant currency basis, on top of two consecutive years of double-digit constant currency. And we significantly increased our profitability in North America, including a double-digit EBIT margin rate for our combined Calvin and Tommy business in the region. We are working more closely than ever with our wholesale partners. And in January, we brought together more than 300 key partners for one of our largest ever global partner days to kick off fall 25 marketing. Their feedback was very positive around the improved product, marketing, and marketplace execution, and we'll build on this momentum together in 2021.

Stefan Larsson: Despite the tough macro we kept to Asia growing on a constant currency basis on top of two consecutive years of double digit constant currency growth and we significantly increased our profitability in North America, including a double digit EBIT margin rate for our combined Calvin.

Stefan Larsson: Tommy business in the region.

Stefan Larsson: We are working more closely than ever with our wholesale partners and in January we brought together more than 300 key partners for one of our largest ever Global Park 10 days to kick off for 25 market launch their feedback was very positive around the improved product.

Stefan Larsson: Marketing and marketplace execution, and we'll build on this momentum together in 2025.

Stefan Larsson: We stood up our global product kitchen for Calvin and created the strongest product assortment so far for Tommy, which launches this fall. And it was a big part of helping to return our European order books back to growth for 2020. We drove significant cost efficiencies while simplifying our organization and shifting our culture to become brand builders with a strong consumer focus. We put in place our technology roadmap, taking important steps to becoming a data and demand-driven company. We have a strong management team in place with experience and capabilities to bring our vision to life. For all this progress, there is no question that 2024 was a challenging environment.

Stefan Larsson: We stood up our global product kitchen for Calvin and created the strongest product assortment, so far for Tommy which launches this fall.

Stefan Larsson: It was a big part of helping to return our European order books back to growth for 2025.

Stefan Larsson: We drove significant cost efficiencies, while simplifying our organization and shifting our culture to become brand builders with a strong consumer focus.

Stefan Larsson: We put in place our technology roadmap, taking important steps to becoming a data and demand driven company.

Stefan Larsson: We have a strong management team in place with experience and capabilities to bring our vision to life.

Stefan Larsson: For all of this progress there is no question that 2024 was a challenging environment and I'm, especially proud of our team for executing so well despite the macro issues at hand.

Stefan Larsson: And I'm especially proud of our team for executing so well, despite the macro issues.

Stefan Larsson: Now let me share a bit more of what drove our performance in the fourth quarter, full year, both from a global brand and regional perspective, and then I'll move into how we will drive growth during 2025.

Stefan Larsson: Now, let me share a bit more on what drove our performance in the fourth quarter full year, both from a global brand and regional perspective, and then I'll move into how we will drive growth during 2025.

Stefan Larsson: Starting with Calvin Klein. We started 2024 with Calvin's explosive spring campaign featuring Jeremy Allen White, driving record visibility and engagement, which we continue to build on through the year. In the fourth quarter, we continue to tap into Calvin's iconic DNA to drive global brand heat, chatting through with mega-talent Kendall Jenner, Idris Elba, Min Ju, Alexander Skarsgård, and for Fall, Greta Lee and Jeremy Ellen White, headlining global campaigns for our iconic underwear and denim.

Stefan Larsson: Starting with Calvin Klein, we started 2024 retail names explosives spring campaign, featuring Jeremy male and white driving record disability and engagement, which we continue to build on through the year in.

Stefan Larsson: In the fourth quarter, we continued to tap into Calvin cyclonic DNA to drive global brand heat shopping through with Mega talent Kendall Jenner Idris Elba menu Alexander scores scored and for fall rapidly and Jeremy male and white headline global campaigns for our electronic omni.

Stefan Larsson: We're in denim.

Stefan Larsson: and we elevated the brand in the market.

Stefan Larsson: And we elevated the brand in the marketplace, including an opening of our flagship store on the Iconix showing some of the same Paris.

Stefan Larsson: including an opening of a flagship store on the iconic Champs-Élysées in Paris. These impactful moments resonated with consumers, driving strong engagement and growth in key product categories, such as underwear, denim, outerwear, and knit. Turning to Tommy Hilfiger, Tommy had a very strong brand-building year and continued to tap into the cultural conversation by leaning into its classic American cool DNA, amplified by global talent including Stray Kids, Sofia Richie Grange, Damson Idris, Patrick Schwarzenegger, Louis Hamilton, and George Russell, to name a few. Tommy cut through major cultural moments from the Met Gala to Formula One, driving new levels of consumer engagement with a continued focus on fames, fashion, art, music, entertainment, and sports.

Stefan Larsson: This impactful moments resonated with consumers driving strong engagement and growth in key product categories, such as outerwear denim outerwear and knits.

Stefan Larsson: Turning to Tommy Hilfiger, Tommy had a very strong brand building year and continued to tap into the cultural conversation by leaning into its classic American cool DNA.

Stefan Larsson: Amplified by global talent, including stray Kids Sofia, Richie Grange, Dunson address Patrick's Schwarzenegger Lewis Hamilton and George Russell to name a few.

Stefan Larsson: Told me cut through major cultural moments from the met gala to Formula one driving new levels of consumer engagement with a continued focus on phase fashion Art music Entertainment and sports.

Stefan Larsson: We started the year with a return to New York Fashion Week, built on that momentum with our Staten Island Ferry runway show in the fall, and we ended the year with a capsule collection starring global brand ambassador Jisoo, followed by the launch of our denim-focused Spring 25 campaign with damson and supermodel Abby Chan. Turning to our regional performance, starting with North America, the team continued to lean into the next-level execution of the PVH Plus. driving a double-digit EBIT margin each quarter, a significant step change in trajectory. Our Calvin and Tommy businesses together delivered EBIT dollars up 40% to an 11.9% EBIT margin for the year, up more than 350 basis points year-over-year on flat revenues, demonstrating the progress we are making in building the foundation for long-term brand accretive growth in the region.

Stefan Larsson: We started the year with a return to New York fashion week built on that momentum with our Staten Island Ferry runway show in the fall and we ended the year with a capsule collection starring Global brand Ambassador Jesu, followed by the launch of our denim focused spring 'twenty five campaign with Dunson and soup.

Abbott: Model Abbott champion.

Turning to our regional performance, starting with North America. The team continue to lean into the next level of execution of the PVH plus plan driving a double digit EBIT margin each quarter.

Abbott: Inefficient step change in trajectory, our Calvin and Tommy businesses together delivered EBIT dollars up 40% to an 11, 9% EBIT margin for the year up more than 350 basis points year over year on flat revenues demonstrating the progress.

Abbott: We are making in building the foundation for long term brand accretive growth in the region in.

Stefan Larsson: In the fourth quarter, Tommy and Calvin together achieved low single-digit revenue growth on a reported basis and mid-single-digit growth, excluding the 53rd quarter. and again delivered significant improvement in profitability to 12.1%. For both Calvin and Tommy, we drove double-digit growth in our full product collection in detail. We also had strong growth in e-commerce, with higher traffic, higher average order value, and higher conversion, supported by the investments we made to elevate the online shopping experience. And for both brands, we continue to partner closely with our key wholesale partners in developing joint growth targets based on elevated product assortments, better floor space, and improved in-stock rates to drive our performance.

Abbott: In the fourth quarter, Tommy and Calvin together achieved low single digit revenue growth on a reported basis and mid single digit growth. Excluding the 50, <unk> week and again delivered significant improvement in profitability to 12, 1%.

Speaker Change: But both Calvin and Tommy we drove double digit growth in our full product collection in DTC.

Speaker Change: We also had strong growth in ecommerce with higher traffic higher average order values and higher conversion supported by the investments we made to elevate the online shopping experience.

Speaker Change: And for both brands, we continue to partner closely with our key wholesale partners in developing joined growth targets based on elevated product assortments better floor space and improved in stock rates to drive outperformance.

Stefan Larsson: Turning to our international business. Europe was a strong proof point of our improved next level PVH plus plan execution for both the fourth quarter and the full year. For 2024, in the face of a tougher macro, we made the proactive decision to drive higher quality of sales to build our brands for the long term and position us for sustainable brand accretive growth in the region.

Speaker Change: Turning to our international business Europe was a strong proof point of our improved next level PVH plus plan execution for both the fourth quarter and the full year for 2024 in the face of the tougher macro we made the proactive decision to drive higher <unk>.

Speaker Change: Quality of sales to build our brands for the long term and position us for sustainable brand accretive growth in the region now one year later I feel very good about how we delivered having solidified the very strong brand position, we have in Europe builds for high quality growth with our key part.

Stefan Larsson: Now, one year later, I feel very good about how we delivered, having solidified the very strong brand position we have in Europe, built for high quality growth with our key partners. From our quality of sales actions, which had a planned 5% negative impact, 2024 sales in the region declined mid-single digits, which was better than what we had initially projected. And importantly, we delivered it with higher gross margin. In the fourth quarter, excluding the 53rd week comparison, overall revenue was flat in euros, which included a 3% impact from our quality of sales.

Speaker Change: <unk> from our quality of sales actions, which had a planned 5% negative impact 2024 sales in the region declined mid single digits, which was better than what we had initially projected and importantly, we delivered it with higher gross margins.

Speaker Change: In the fourth quarter, excluding the 50 <unk> week comparison overall revenue was flat in Europe, which included a 3% impact from our quality of sales actions.

Stefan Larsson: For the second consecutive quarter, we drove growth in our retail stores, reflecting our enhanced in-store experience. Building on the significant product improvements over the past year, we continue to drive higher sell-through trends from our successful fall season product, supported by stronger core product inventory. This, combined with quality of sales, directly translated into stronger business with our key partners, leading to the sequentially improved wholesale order.

Speaker Change: For the second consecutive quarter, we drove growth in our retail stores, reflecting our enhanced in store experience.

Speaker Change: Building on the significant product improvements over the past year, we continued to drive higher sell through trends from our successful full see some product supported by stronger core product inventory.

Speaker Change: This combined with quality of sales directly translated into stronger business with our key partners leading to the sequentially improved wholesale order books.

Stefan Larsson: Moving to Asia-Pacific. Our team's disciplined PVH plus plan execution across both Calvin and Tommy grows for the quarter and the full year in constant current. For the year, the region delivered low single-digit revenue growth in constant currency, including 3% growth in the fourth quarter, excluding the 53rd-week class. Growth was led by China, which increased 3% in constant currency, excluding the 53rd week, benefiting from an earlier Lunar New Year from both a calendar and an overall shopping behavior. and we grew in Japan and Korea.

Speaker Change: Moving to Asia Pacific our teams discipline, PVH plus plan execution across both Calvin and Tommy drove growth for the quarter and the full year in constant currency for the year. The region delivered low single digit revenue growth in constant currency, including 3%.

Speaker Change: Both in the fourth quarter, excluding the 50 <unk> week last year.

Speaker Change: Growth was led by China, which increased 3% in constant currency, excluding the 50 <unk> week benefiting from an earlier lunar new year from both the calendar and an overall shopping behavior perspective, and we grew in Japan and Korea.

Stefan Larsson: The region's ability to ignite and amplify global talent continue to be a key growth driver through powerful brand ambassadors, including Min-Yu for Calvin and Jisoo for Tommy. We captured key local consumer moments through activations that continuously fuel the brand heat in the region.

Speaker Change: The region's ability to ignite and amplify global talent continue to be a key growth driver through powerful brand ambassadors, including menu for Calvin and G suite for Tommy we captured key local consumer moments through activation staff continuously fueled.

Speaker Change: And Heath in the region.

Stefan Larsson: Now let's switch gears and turn to our overall outlook for 2020. For all the progress of 2024, we're starting 2025 with some obvious headwinds. Our industry is facing uncertainty around the U.S. consumer demand, and with macro pressures in mind, we have already taken proactive cost and efficiency actions to reflect the current demand.

Speaker Change: Now, let's switch gears and turn to our overall outlook for 2025.

Speaker Change: For all the progress of 2024 were starting 2025 with some obvious headwinds our industry is facing uncertainty around the U S consumer demand and with macro pressures in mind, we have already taken proactive cost and efficiency actions to reflect the current environment.

Stefan Larsson: In addition, as you know, PVH has been added to Mofconn's unreliable entity list, which is unprecedented for a global consumer company. We remain fully committed to serving our Chinese consumers, as we have for the last 20 years, and we are investing in our growth in China for the long term. We continue to engage with MOFCON, and we work towards a positive resolution. Our team is, of course, fully focused on responding to the moment, while at the same time not losing sight of our longer-term commitment. We have two of the most globally iconic and beloved brands, and from the eye of the consumer, both have the right to play as part of the most desirable brands in the market.

Speaker Change: In addition, as you know PVH has been added to MOFCOM unreliable entity list, which is unprecedented for a global consumer company, we remain fully committed to serving our Chinese consumers as we have for the last 20 years and we are investing in our growth in China.

Long term, we continue to engage with MOFCOM and we work towards a positive resolution.

Speaker Change: Our team is of course fully focused on responding to the moment, while at the same time, not losing sight of our longer term commitments.

Speaker Change: We have two of the most globally iconic and beloved brands and from the eye of the consumer both have the right to play as part of the most desirable brands in the market and through the PVH plus plan, that's where we're taking them as.

Stefan Larsson: And through the PVH Plus plan, that's where we are taking.

Stefan Larsson: As we look at the 2025 outlook for Calvin Klein, we kicked off the year with a historic return to runway at New York Fashion Week, which dominated the conversation. Calvin Klein himself, for the first time in 20 years, sat front row, alongside with his original muses, Kate Moss and Christy Turlington, who wore a custom Calvin Klein collection. and global talent who joined us for shockable fall and spring start. We're excited for Creative Director Veronica Leone's Fall 25 collection to come to life this year in our flagship stores and our select premium wholesale partners such as Harvey Nichols, Mytheresa, Prontom, Browns, and Metaport.

Speaker Change: As we look at the 2025 outlook for Calvin Klein, we kicked off the year with a historic return to runway at New York fashion week, which dominated the conversation.

Speaker Change: <unk> signed himself for the first time in 20 years sat front row alongside with his original Muses pay small San Christy Turlington, who wore touchstone Calvin Klein collection, and global talent, who joined US War shopper, both fall and spring stars we're excited for creative.

Speaker Change: Directive Veronica <unk> fall 25 collection to come to life. This year in our flagship stores and a select premium wholesale partners such as Harvey Nichols My theories pronged Tong Browns and net a porter.

Stefan Larsson: We have leaned into Calvin's product strength as the number one men's premium underwear brand globally and took one of our biggest and best-selling product franchises, the Cotton Stretch underwear, and brought unprecedented innovation in it, building it into the new Icon Cotton Stretch with an industry-leading infinity waistband and improved fit and fitability. We launched this product innovation in our biggest category globally, in D2C and in close collaboration with our key wholesalers. together with multi-platinum recording artist Bad Bunny, one of the most popular artists of our time. And in the first 48 hours, we reached over 29 million users on Calvin's Instagram page alone and added nearly 100,000 followers within the first week of launch, bringing our brand and our iconic underwear to the consumer with unprecedented excitement and newness, and we direct commercial impact.

Speaker Change: We have leaned into calvin's product strength as the number one men's premium underwear brand globally and took one of our biggest and best selling product franchises to coastal stretch underwear and brought unprecedented innovation and building it into the new icon courtauld stretch with an industry.

Speaker Change: Leading infinity waistband and improved fit and fabric. We launched this product innovation in our biggest category globally in D C and in close collaboration with our key wholesale partners together with multi platinum recording artist Bad bumpy one of the most popular artists.

Speaker Change: Our time and in the first 48 hours, we reached over 29 million users on Calvin Instagram page alone and added nearly 100000 followers within the first week of launch, bringing our brand and our iconic underwear to the consumer with unprecedented excites me.

Speaker Change: <unk> and newness and we direct commercial employer.

Stefan Larsson: In 2025, you'll also see Calvin relaunch its women's sportswear business at U.S. Holds. following the take back of this license from Jesus. We kick this off tapping into the zeitgeist with a campaign featuring actress Lily Collins that will span the full marketing. We continue to make important progress to align Calvin Klein to one global brand vision to win in all markets. Spring 25 was the first season where we centralized Calvin's global product capabilities, bringing product creation across Europe, Asia, and North America to our team in New York. This was a significant undertaking, given the highly fragmented and decentralized legacy model we had before.

In 2025, you'll also see Calvin relaunch its women's sportswear business at U S. Wholesale following the take back of this license from G. III. We kicked this off tapping into the site <unk> weighted campaign, featuring actress Lilly callers that will span the full marketing.

Speaker Change: Funnel.

Speaker Change: We continued to make important progress to align Calvin Klein to one global brand vision to win in all markets Spring 25 was the FERC somewhere with centralized <unk> global product capabilities, bringing in product creation across Europe, Asia, and North America to our team in New York.

Speaker Change: This was a significant undertaking given the highly fragmented and decentralized legacy model we had before.

Stefan Larsson: As we brought this first season to life, the team had to work through a number of complexities, including centralizing disparate systems and processes that existed around the world. This initial transition took longer than we expected and led to extended product development timelines, constrained sourcing and shipping options, and pressure production costs for the season, which we decided not to pass on to partners or the culture. Soon as we experienced these challenges, we took action. And go forward, we now have a simplified and improved go-to-market process in place with a standard global buy approach, and we are upgrading our technology capabilities to support.

Speaker Change: We brought this first season to life the team had to work through a number of complexities, including centralizing disparate systems. Some processes that exist around the world. This initial transition took longer than we expected and led to extended product development timelines constrained.

Speaker Change: Sourcing and shipping options and fresh production costs for the season, which we decided not to pass on to partners or the cold summer as soon as we experience. These challenges we took action and go forward. We now have a simplified and improved go to market process in place with a standard global.

Speaker Change: By approach and we are upgrading our technology capabilities to support it.

Stefan Larsson: While the compounding effect of these factors created a temporary margin headwind that will be most pronounced in the first half of this year, importantly, we see the improvements already for the fall 25. And we'll be fully through this transition for the spring 26 product season that we are working on right now. Even though the work to set up Calvin's Engine for global product creation initially was tougher than expected, it was absolutely the right thing to do. And we can already see the strength and benefits coming out of it.

Speaker Change: While the compounding effect of these factors created a temporary margin headwind that will be most pronounced in the first half of this year importantly, we see the improvements already for the full 25 seats and will be fully through this transition for the spring 2006 product season that we are working.

Speaker Change: Going on right now.

Speaker Change: Even though the words to setup Kelvin and Jim for global product creation. Initially was tougher than expected. It was absolutely the right thing to do and we can already see the strength and benefits coming out of it.

Stefan Larsson: And finally, we will continue to elevate the Calvin brand in the marketplace, and we are excited for this year's launch of our Soho flagship store here in New York, as well as other store enhancements and key openings as we expand our own and operated footprint of Calvin around the world.

Speaker Change: And finally, we will continue to elevate the Calvin brand in the marketplace and we are excited for this years launch of our Soho flagship store here in New York as well as other store enhancements and key openings as we expand our owned and operated footprint of traveling around the world.

Stefan Larsson: For Tommy in 2025, the brand continues to regenerate strong consumer relevance, launching its Spring 2025 campaigns, featuring Sophia Richie Grange, global K-pop sensation Stray Kids, and brand ambassador Patrick Schwarzenegger, who wore Tommy to the highly anticipated global premiere of the White Lotus in Bangkok. Together with Sophia, we also launched Sophia for Tommy, a women's capsule collection that introduces a new elevated brand expression designed to create the halo for our women's mainline. This campaign drove strong engagement among our core demographic and new consumers through a full funnel storytelling approach. It's also been very well received by our key partners globally.

Speaker Change: But Tommy in 2025, the brand continues to regenerate strong consumer relevance launching its spring 2025 campaigns, featuring Sofia Richie range Global K pop sensation stray kids and brand Ambassador Patrick Swartz Snagger, who wore told me to the <unk>.

Speaker Change: <unk> anticipated global premiere of the White Lotus in Bangkok.

Speaker Change: Together with Sofia, We also launched Sofia for Tommy Womens capsule collection that introduces a new elevated brand expression designed to create a halo for our womens mainline. This campaign drove strong engagement among our core demographic and new consumers through a full funnel.

Speaker Change: Storytelling approach. It's also been very well received by our key partners globally.

Stefan Larsson: Tommy is also preparing a very special appearance at the Met Gala. And this summer, we'll play an exciting role in the highly anticipated F1 movie. starring Tommy Hilfiger brand ambassador, Damson Idris, alongside Brad Pitt. The film, where Tommy is a key partner, brings the adrenaline-fueled world of Formula One to the big screen. Finally, to amplify our summer lifestyle shops in both DTC and with our wholesale partners. told me gather key talent from around the world at a hill figure resort themed event in the Caribbean. This event will be captured as a campaign launching in May across our talent's own channels, our brand channels, on tommy.com and with our partners.

Speaker Change: Tell me a source of preparing a very special appearance at the met the Gallo and this summer will play an exciting role in the highly anticipated F. One movie starring Tommy Hilfiger brand Ambassador Thompson address alongside Brad Pitt.

Speaker Change: Film, We're told me as a key partner brings to adrenalin fuelled world of Formula one to the big screen.

Speaker Change: Finally to amplify our summer lifestyle shops in both D C and with our wholesale partners.

Speaker Change: <unk> gathered key talent from around the world are the hilfiger restored themed event in the Caribbean.

Speaker Change: This event will be captured as a campaign launching in may across our talents own channels, our brand channels on <unk> dot com and with our partners the organic social media impact from this event tests already pre launch generated 160 million impressions with high engagement rates.

Stefan Larsson: The organic social media impact from this event has already pre-launched, generated 160 million impressions with high engagement.

Stefan Larsson: Turning to our region. In Europe, as I mentioned earlier, following our successful quality of sales initiative, we have driven two consecutive quarters of growth in our stores. And I'm so pleased to share that our Fall 25 order books have returned to growth. Our Spring 25 order book finalized down low single digits as we expected, an important sequential improvement from Fall 24. And our Fall 25 order book took another big step forward, and it's now up low single digits with growth across both Tommie and Cal. This return to growth for Fall 25 is a testament to the strong execution from our global and regional teams to improve the overall assortment and drive higher quality of sales across the market.

Speaker Change: Turning to our regions in Europe as I mentioned earlier following our successful quality of sales initiatives, we have driven two consecutive quarters of growth in our stores and I'm. So pleased to share that our full 25 order books have returned to growth our <unk>.

Speaker Change: <unk> 25 order book finalized down low single digits as we expected an important sequential improvement from $4 24, and our full 25 order book took another big step forward and is now up low single digits with growth across both Tommy and Calvin.

Speaker Change: This return to growth for fall 'twenty five is a testament to the strong execution from our global and regional teams to improve the overall assortment and drive higher quality sales across the marketplace.

Stefan Larsson: In 2025, we build on this momentum through continued execution of our PBH plus. In product, you will see us further strengthening key product categories, infusing more innovation and elevation of our hero products, and together with even stronger product segmentation between channels. Our strong seasonal campaigns would cut through the full marketing funnel, led by aspirational talent, amplified by mid funnel product storytelling, and cut through all the way into our whole set doors, and our elevated D2C execution in stores and online. In North America this year, we expect to continue to drive a double-digit EBIT margin through our PVH Plus execution.

Speaker Change: In 2025, we build on this momentum through continued execution of our PVH plus plan.

Speaker Change: In product you will see us further strengthening key product categories infusing more innovation and elevation of our hero products and together with even stronger product segmentation between channels.

Speaker Change: Strong seasonal campaigns with <unk> through the full marketing funnel led by aspirational talent amplified by mid funnel product storytelling and cut through all the way into our wholesale doors and our elevated D to C execution in stores and online.

Speaker Change: In North America. This year, we expect to continue to drive a double digit EBIT margin through our PVH plus execution.

Stefan Larsson: further unlocking our business across China. Just like in Europe, our key business drivers in the region will come from continued improvements in product, marketing, and the marketplace execution. and Asia will continue to be a growth and for us long.

Speaker Change: Further unlocking our business across channels, just like in Europe, our key business drivers in the region, where it come from continued improvements in product marketing and the marketplace execution.

Speaker Change: And Asia will continue to be a growth engine for us long term, we have a diversified business across the region, where we will continue to build strength this year.

Stefan Larsson: We have a diversified business across the region, where we will continue to build strength this As we look at the year ahead, like others in our industry, we are navigating global macro volatility, particularly in North America. Following a strong holiday in January, in February, retail traffic trends took a step down, a dynamic affecting the entire sector. And despite this lower traffic, we're driving higher conversion, a reflection of our execution improvements in the region. Also, starting in February, we began to face incrementally tougher headwinds in China, including a post-New Year holiday slowdown that led to a step-down in revenue.

Speaker Change: As we look at the year ahead like others in our industry. We are navigating global macro volatility, particularly in North America. Following a strong holiday in January and February retail traffic trends took a step down and dynamic affecting the entire sector and despite this lower trough.

Speaker Change: We are driving higher conversion a reflection of our execution improvements in the region.

Speaker Change: Also starting in February we began to face incrementally tougher headwinds in China, including a pulse new year holiday slowdown that led to a step down in revenue. The trend has same stabilized at these new lower levels importantly, we remain fully committed.

Stefan Larsson: The trend has since stabilized at these new lower levels.

Stefan Larsson: Importantly, we remain fully committed to serving our Chinese consumers and partners for the long turning to our licensing business. Across both Calvin and Tommy, we have a large and diversified global licensing business, which is a key competitive advantage. Our licensing partners help bring our vision to life across multiple lifestyle categories.

Speaker Change: So serving our Chinese consumers and partners for the long term.

Speaker Change: Turning to our licensing business across both Calvin and Tommy we have a large and diversified global licensing business, which is a key competitive advantage. Our licensing partners helped bring our vision to life across multiple lifestyle categories from watches and <unk>.

Stefan Larsson: from watches and fragrances to eyewear and are important to how we drive sustainable, Before I give you an update on the multi-year transition away from G3, I would like to share some important context on our licensing business over. 80% of PBH licensing revenues this year are from strong, long-term brand-building partnerships, where we have full alignment on where we are taking the brands, and where our partners bring unique expertise. A concrete example of this includes how we work with Cody, where Cody's CEO, Sue Navi, and I have engaged both our teams on something big that's in the works for Calvin Klein Fragrance in 2020.

Speaker Change: Fragrances to eyewear and are important to how we drive sustainable profitable growth.

Speaker Change: Before I give you an update on the multiyear transition away from <unk> I would like to share some important context on our licensing business overall.

Speaker Change: 80% of PVH licensing revenues. This year are from strong long term brand building partnerships, where we have full alignment on where we are taking the brands and where our partners bring unique expertise.

Speaker Change: A concrete example of this includes how we work with Cody, we're told as CEO, a tsunami and I have engaged both our teams on something big that's in the works for Calvin Klein fragrance in 2026.

Stefan Larsson: There are many more examples like this. And these go-forward licensing partnerships will drive high-quality growth for 2025 and for many years.

Speaker Change: There are many more examples like this and this go forward licensing partnerships will drive high quality growth for 2025 and for many years to come.

Stefan Larsson: When it comes to the G3 transition, the overall contribution to our total global licensing business is relatively small, at only 20% of our expected licensing revenues for 2021. This is following the take back of the North America women's sportswear categories for the Wholesale Channel, which represented approximately 20% of the G3 business previously. While still early, our new product is driving significant increase in AURs, with consumers describing it as fresh, modern, and elegant. And we are looking forward to building long-term sustainable growth of our women's business in North America wholesale, just as we already do in the rest of the world.

Speaker Change: When it comes to the G. III transition the overall contribution to our total global licensing business is relatively small at only 20% of our expected licensing revenues for 2025.

Speaker Change: This is following the take back of the North America Women's sportswear categories for the wholesale channel.

Each represented approximately 20% of the G III business previously.

Speaker Change: While still early our new product is driving significant increase in AUR is will consumers describing it as fresh modern and elevated.

Speaker Change: And we're looking forward to building long term sustainable growth of our womens business in North America wholesale just us we already do in the rest of the world.

Stefan Larsson: Shifting to our guidance. Building on the momentum of 2024 and the benefits arising from our ongoing discipline execution of our PBH Plus plan, we are positive on our prospects for 2020. while recognizing the challenges of the moment. We expect revenue to be flat to up slightly on both the reported and constant currency basis. we expect EBIT margins to also be flat to up slightly, with a stronger second half of the year having the benefit of both the strength in the European order books, as well as more of our structural cost efficiencies having fully. We will also make meaningful increases in our capital return to share.

Speaker Change: Shifting to our guidance built.

Speaker Change: Building on the momentum of 2024, and the benefits arising from our ongoing disciplined execution of our PVH plus plan were positive on our prospects for 2025, while recognizing the challenges of the moment.

Speaker Change: We expect revenue to be flat to up slightly on both a reported and constant currency basis.

Speaker Change: We expect EBIT margins to also be flat to up slightly with a stronger second half for the year, having the benefit of both the strength in the European order books as well as more of a structural cost efficiencies having full impact.

Speaker Change: We will also make meaningful increases in our capital return to shareholders with accelerated stock buybacks in 2025.

Stefan Larsson: with Accelerator Stock Buybacks in 2020. These actions will help us take advantage of the current valuations while accelerating our EPS growth, even in a weaker macro balance. And in 2025, we will be well-positioned to deliver another year of record non-GAAP EPS.

Speaker Change: These actions will help us take advantage of the current valuations, while accelerating our EPS growth even in a weaker macro backdrop.

Speaker Change: And in 2025, we will be well positioned to deliver another year of record non-GAAP EPS.

Stefan Larsson: In conclusion, our vision and our long-term commitment are to build Calvin Klein and Tommy Hilfiger into the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our country. This is the heart of the PVH Plus. 2024 was a year of significant progress in both brands across all regions. In 2025, it's all about executing at pace, building on this momentum, and I'm so proud of our teams and partners, and we are full steam ahead.

Speaker Change: In conclusion, our vision and our long term commitment or to build Calvin Klein and Tommy Hilfiger into the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our sector. This is the heart of the PVH plus plan 2024.

Speaker Change: Was a year of significant progress in both brands across all regions. In 2025 is all about executing at pace.

Speaker Change: Building on this momentum and I'm, so proud of our teams and partners and we are full steam ahead and with that I'll turn the call over to <unk>.

Zach Coughlin: And with that, I'll turn the call over. Thanks, Stefan, and good morning. My comments are based on non-GAAP results and are reconciled in our press release. As Stefan discussed, we are pleased with our fourth quarter and four year financial results, driven by the strength of our two iconic global brands and disciplined execution of the PBH Plus. For the fourth quarter, Revenue and EPS came in slightly ahead of Guidance, with Operating Margin in line with expectations. Importantly, for the full year 2024, we deliver on the commitments we made at the start of the year for both revenue and profit.

Speaker Change: Thanks, Stefan and good morning, My comments are based on non-GAAP results and are reconciled in our press release.

Speaker Change: Stefan discussed we are pleased with our fourth quarter and full year financial results driven by the strength of our two iconic global brands and disciplined execution of the PVH plus plan.

Speaker Change: For the fourth quarter revenue and EPS came in slightly ahead of guidance with operating margin in line with expectations.

Speaker Change: Importantly for the full year 2024, we deliver on the commitments we made at the start of the year for both revenue and profit.

Zach Coughlin: We achieved a record high of 59.4% gross margin this year and delivered record high non-GAAP earnings per share of $11.74, up 10% versus 2023, and exceeding our initial start of year guidance range of $10.75 to $11. And we delivered this in spite of an increasingly challenging consumer backdrop in China and North America that began around mid-year. In North America, for Calvin Klein and Tommy Hilfiger combined, we delivered an increase in EBIT of over 40 percent and drove over 350 basis points of operating margin expansion. In Europe, we ended the year with two consecutive quarters of DTC store revenue growth and confirmed positive Fall 25 order In Asia Pacific, we deliver yet another year of revenue growth and constant currency in our most profitable region, on top of two consecutive years of double-digit constant currency growth.

Speaker Change: We achieved a record high of 59, 4% gross margin this year and delivered record high non-GAAP earnings per share of $11 74.

Up 10% versus 2023 and exceeding our initial start of your guidance range of $10 75 to $11 and we delivered this in spite of an increasingly challenging consumer backdrop in China, and North America that began around mid year.

Speaker Change: In North America for Calvin Klein, and Tommy Hilfiger, combined we delivered an increase in EBIT of over 40% and drove over 350 basis points of operating margin expansion in Europe. We ended the year with two consecutive quarters of DTC store revenue growth and confirmed positive fall 25 order books.

Speaker Change: In Asia Pacific, we delivered yet another year of revenue growth in constant currency and our most profitable region on top of two consecutive years of double digit constant currency growth.

Zach Coughlin: And across the world, we made significant progress in the next phase of Growth Driver 5 of the PBH Plus Plan to simplify our operating model and drive SG&A efficiency. Additionally, we delivered strong cash flow again this year, with free cash flow of nearly $600 million, enabling us to return $500 million to shareholders during the year through the repurchase of 4.7 million shares of Common Sense.

Speaker Change: And across the World, we made significant progress in the next phase of growth driver five of the PVH plus plan to simplify our operating model and drive SG&A efficiencies.

Speaker Change: Additionally, we delivered strong cash flow again, this year with free cash flow of nearly $600 million, enabling us to return $500 million to shareholders. During the year through the repurchase of $4 7 million shares of common stock.

Zach Coughlin: I will now discuss our 2024 results in more detail and then move on to our outlook for 2024. Revenue for the fourth quarter was down 2% on a constant currency basis, including a 3% decline due to the 53rd week in 2023, and a 1% decline due to the sale of the Heritage Intimates business. Excluding these impacts, revenue on a constant currency basis was up 2%, with growth in both DTC and wholesale, an important milestone in our plan to return to growth during 2025. On a reported basis, revenue through the quarter was down 5%. From a regional perspective, fourth quarter revenue for our international businesses was down 3% on a constant currency basis, including a 3% decline from the 53rd week in 2023.

Speaker Change: I will now discuss our 2024 results in more detail and then move onto our outlook for 2025.

Speaker Change: Revenue for the fourth quarter was down 2% on a constant currency basis, including a 3% decline due to the 50 <unk> week in 2023, and a 1% decline due to the sale of the heritage Intimates business. Excluding these impacts revenue and constant currency basis was up 2% with growth in both DTC.

Speaker Change: In wholesale and important milestone in our plan to return to growth during 2025.

Speaker Change: On a reported basis revenues grew in the quarter was down 5%.

Speaker Change: From a regional perspective.

Speaker Change: Fourth quarter revenue for our international businesses was down 3% on a constant currency basis, including a 3% decline from the 50 <unk> week in 2023.

Zach Coughlin: Excluding the impact of the 53rd week, our Asia Pacific business was up 3% on a constant currency basis, benefiting from the earlier Lunar New Year, as well as growth in Japan and Korea. Sales for our Asia-Pacific business were down 4% on a reported basis and down 1% in constant currency. In our European business, sales in Euros were flat compared to last year, excluding the impact of the 53rd week. Low single-digit growth in our retail stores offset a planned decrease in wholesale sales. Sales for our European business were down 7% on a reported basis and down 4% in Europe.

Speaker Change: Excluding the impact of the 50 <unk> week, our Asia Pacific business was up 3% on a constant currency basis benefiting from the earlier lunar new year as well as growth in Japan and Korea.

Speaker Change: Sales for Asia Pacific business were down 4% on a reported basis and down 1% in constant currency.

Speaker Change: In our European business sales in euros were flat compared to last year, excluding the impact of the 50 <unk> week.

Speaker Change: Low single digit growth in our retail stores offset a planned decrease in wholesale.

Speaker Change: Sales for our European business were down 7% on a reported basis and down 4% in euros.

Zach Coughlin: In North America, excluding the impact of the 53rd week, revenue for our Tommy Hilfiger and Calvin Klein businesses combined increased 4% versus last year, reflecting the wholesale timing shift from the third quarter into the fourth quarter that I discussed last quarter. DTC was flat compared to last year, excluding the 53rd week. On a reported basis, revenue was up 1%. From an overall PVH channel perspective, I'll first talk about our DTC revenue excluding the 4% negative impact from the 53rd week in 2023. Overall, Direct-to-Consumer Revenue was up 2% on a constant currency basis and better than we communicated at the start of the quarter, primarily driven by the strong holiday season.

Speaker Change: In North America, excluding the impact of the 50 <unk> week revenue for Tommy Hilfiger, and Calvin Klein businesses combined increased 4% versus last year, reflecting the wholesale timing shift from the third quarter into the fourth quarter that I discussed last quarter.

Speaker Change: DTC was flat compared to last year, excluding the 50 <unk> week on a reported basis revenue was up 1%.

Speaker Change: From an overall PVH channel perspective, I'll first talk about our DTC revenue, excluding the 4% negative impact from the 50 <unk> week in 2023.

Speaker Change: Overall direct to consumer revenue was up 2% on a constant currency basis and better than we communicated at the start of the quarter, primarily driven by the strong holiday season sales.

Zach Coughlin: Sales in our retail stores were up 3% on a constant currency basis. And in our owned and operated e-commerce business, sales were down 4% on a constant currency basis as strong growth in North America was more than offset by our planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region. Including the impact of the 53rd week, DTC sales overall were down 5% on a reported basis and down 2% in constant current. Within wholesale, we remain focused on strong quality of sales and winning with our key wholesale partners. Total wholesale revenue was down 2% on a constant currency basis, including a 2% decline from the sale of the Heritage Intimates bill.

Speaker Change: Sales in our retail stores were up 3% on a constant currency basis and in our owned and operated E. Commerce business sales were down 4% on a constant currency basis as strong growth in North America was more than offset by our planned strategic reduction in sales in Europe to drive overall higher quality of sales in the region.

Speaker Change: Including the impact of the 50 <unk> week DTC sales overall were down 5% on a reported basis and down 2% in constant currency.

Speaker Change: Within wholesale we remain focused on strong quality of sales and winning with our key wholesale partners total wholesale revenue was down 2% on a constant currency basis, including a 2% decline from the sale of the heritage Intimates business.

Zach Coughlin: The benefit from the shift in timing of wholesale shipments in North America was largely offset by the planned reduction in Europe. On a reported basis, wholesale revenue was down 5% versus last year. Turning to our global brands, Calvin Klein revenues were up 1% on a constant currency basis and down 2% on a reported basis, including a benefit from the shift in timing of North America wholesale shipping. Tommy Hilfiger revenues were down 3% on a constant currency basis, and down 5% on a reported basis, with Tommy more impacted by our quality of sales initiative in Europe in 2024.

Speaker Change: The benefit from the shift in timing of wholesale shipments in North America was largely offset by the planned reduction in Europe.

Speaker Change: On a reported basis wholesale revenue was down 5% versus last year.

Speaker Change: Turning to our global brands Calvin Klein revenues were up 1% on a constant currency basis and down 2% on a reported basis, including a benefit from the shift in timing of North America wholesale shipments.

Speaker Change: Tommy Hilfiger revenues were down 3% on a constant currency basis and down 5% on a reported basis with Tommy more impacted by our quality of sales initiative in Europe in 2024.

Zach Coughlin: In the fourth quarter, we delivered a gross margin of 58.2%, down 210 basis points compared to a record high in 4Q last year. The decrease was driven by three main factors. in moderately more promotional environment than last year, particularly in North America, an increase in freight costs, primarily due to Red Sea disruptions and increased premium freights, and the mix of wholesale shipments in North America, which negatively impacted our gross margin of the quarter but did not impact our overall profitability. Inventory in quarter end was up 6% compared to 2023 due to an investment in best-selling core product categories and overly lean inventory levels last year.

Speaker Change: In the fourth quarter, we delivered gross margin of 58, 2% down 210 basis points compared to a record high in <unk> last year.

The decrease was driven by three main factors a moderately more promotional environment than last year, particularly in North America.

Speaker Change: An increase in freight cost primarily due to red sea disruptions and increased premium freights and the mix of wholesale shipments in North America, which negatively impacted our gross margin in the quarter, but did not impact our overall profitability.

Speaker Change: Inventory at quarter end was up 6% compared to 2023 due to an investment in best selling core product categories and overly lean inventory levels last year.

Zach Coughlin: As discussed last quarter, we chose to strategically increase inventory in our most essential products to support our goal of having these timeless items in stock at a target of 95% of the time. Importantly, the vast majority of inventory is current season in SG&A expense as a percent of revenue was 47.9%, a 30 basis point improvement versus last year. Our Growth Driver 5 cost savings actions and other expense efficiencies drove a nearly 100 basis point improvement, which more than offset the impact from the deleverage of expenses due to the 53rd week in 2023. Even for the quarter, it was $244 million, and operating margin was 10.3%.

Speaker Change: As discussed last quarter, we chose to strategically increase inventory and are most of central products to support our goal of having these timeless items in stock at a target of 95% of the time importantly, the vast majority of inventory as currencies and in core.

Speaker Change: SG&A expense as a percent of revenue was 47, 9%, a 30 basis point improvement versus last year.

Our growth driver find cost savings actions and other expense efficiencies drove a nearly 100 basis point improvement, which more than offset the impact from the deleverage of expenses due to the 50 <unk> week in 2023.

Speaker Change: EBIT for the quarter was $244 million and operating margin was 10, 3%.

Zach Coughlin: Earnings per share was $3.27, and our tax rate for the quarter was 21.4%. For the full year, revenue is down 6% on a reported, and down 5% in constant currency, including a 2% decline due to the sale of the Heritage Intimates business, and a 1% decline due to the 53rd week in 2023. Even margin was 10% and in line with last year, with record high gross margin offsetting the impact from the deleveraging of expenses on lower sales. And we delivered record high non-gap earnings per share of $11.74.

Speaker Change: Earnings per share was $3 27.

Speaker Change: And our tax rate for the quarter was 21, 4%.

Speaker Change: For the full year revenue was down 6% on a reported and down 5% in constant currency, including a 2% decline due to the sale of the heritage intimates business and a 1% decline due to the 50 <unk> week in 2023.

Speaker Change: EBIT margin was 10% and in line with last year with record high gross margin offsetting the impact from the deleveraging of expenses on lower sales and we delivered record high non-GAAP earnings per share of $11 74.

Zach Coughlin: And now, moving on to our out...

Speaker Change: And now moving on to our outlook in.

Zach Coughlin: In 2025, we will build on the progress we made in 2024 with a continued focus on driving double digit operating margins in North America, returning to growth and growing profitability in Europe, and building on the strong growth over the last three years in Asia Pacific. At the same time, we remain cautious as we face new external headwinds that have emerged beginning in early February. First, softness in the consumer backdrop in North America, where following a strong holiday season, retail traffic across the industry took a significant step backwards. And second, a noticeable decline in revenue in China.

Speaker Change: In 2025, we will build on the progress we made in 2024 with a continued focus on driving double digit operating margins in North America.

Speaker Change: Turning to growth and growing profitability in Europe and building on the strong growth over the last three years in Asia Pacific.

Speaker Change: At the same time, we remain cautious as we think new external headwinds that have emerged beginning in early February.

Speaker Change: Softness in the consumer backdrop in North America, we're following a strong holiday season retail traffic across the industry took a significant step backwards.

Speaker Change: Second a noticeable decline in revenue in China.

Zach Coughlin: Both of these factors partially stabilized in March, but at levels below 2024, a trend we are forecasting will continue through the rest of 2025. Additionally, as Stefan discussed, Calvin Klein product delays are expected to result in temporary margin headwinds, particularly in the first half of the year. As we lean into those specific headwinds, we remain laser focused on driving discipline execution of the PBH Plus plan. We expect to build on our financial performance as the year progresses, driving sequential improvements in our European order books and increasing SG&A efficiencies quarter by quarter through our growth driver five actions, while improving margins in our Calvin Klein business as we work through that transition.

Speaker Change: Both of these factors partially stabilized in March but at levels below 2020 for a trend. We are forecasting will continue through the rest of 2025. Additionally.

Speaker Change: Additionally, and Stefan discussed Calvin Klein product delays are expected to result in temporary margin headwinds, particularly in the first half of the year.

Speaker Change: As we lean into those specific headwinds we remain laser focused on driving disciplined execution of the PVH plus plan we.

Speaker Change: We expect to build on our financial performance as the year progresses, driving sequential improvements in our European order books, and increasing SG&A efficiencies quarter by quarter through our growth driver five actions, while improving margins in our Calvin Klein business as we work through that transition.

Zach Coughlin: In the first quarter, we are projecting revenue to be flat to down 2% on a reported basis and flat to down 1% on a constant currency basis compared to 2024. In Europe, our investment in quality of sales last year continues to pay off as we expect revenue to be higher than last year by mid-single digits in euros with growth in DTC and wholesale. In North America, we are planning revenue to be approximately flat to last year, with growth in wholesale offset by lower DTC sales. And in Asia Pacific, we expect revenue to be lower by low double digits due to a combination of an early Lunar New Year this year and headwinds in China.

In the first quarter, we are projecting revenue to be flat to down 2% on a reported basis and flat to down 1% on a constant currency basis compared to 2024.

Speaker Change: In Europe, our investment in quality of sales last year continues to pay off as we expect revenue to be higher than last year by mid single digits in euros with growth in DTC and wholesale.

Speaker Change: In North America, we're planning revenue to be approximately flat to last year with growth in wholesale offset by lower DTC sales and in Asia Pacific, We expect revenue to be lower by low double digits due to a combination of an early lunar new year, this year and headwinds in China.

Zach Coughlin: We are projecting first quarter gross margin to decline approximately 250 basis points, driven by an increase in freight costs and incremental discounts due to the Calvin Klein product delays, and the gross margin differential as we transition the first significant categories in North America wholesale from a licensed to an in-house wholesale business model. Additionally, our mix of wholesale revenue is higher in the first quarter than last year, which has a negative impact on gross margin, but not on our overall profitability. We expect gross margin compared to last year to improve sequentially each quarter as we are making steady progress to stabilize Calvin Klein product delays, and we expect our channel mix to normalize throughout the year.

Speaker Change: We are projecting first quarter gross margin to decline approximately 250 basis points driven by an increase in freight costs and incremental discounts due to the Calvin Klein product delays and the gross margin differential as we transition the first significant categories in North America wholesale from a licensed to an in house wholesale.

Speaker Change: Our business model.

Speaker Change: Additionally, our mix of wholesale revenue was higher in the first quarter than last year, which has a negative impact on gross margin, but not on our overall profitability.

Speaker Change: We expect gross margin compared to last year to improve sequentially each quarter as we were making steady progress to stabilize Calvin Klein product delays, we expect our channel mix to normalize throughout the year.

Zach Coughlin: We are actively working to mitigate these impacts through disciplined cost management and expect SG&A expenses as a percentage of revenue in the first quarter to decrease approximately 100 basis points. In total, we are projecting our first quarter operating margin to be approximately 8 to 8.5%, down 150 to 200 basis points compared to last year.

We are actively working to mitigate these impacts through disciplined cost management and expect SG&A expenses as a percentage of revenue in the first quarter to decrease approximately 100 basis points.

Speaker Change: In total we are projecting our first quarter operating margin to be approximately eight to eight 5% down 150 to 200 basis points compared to last year.

Zach Coughlin: First quarter earnings per share is projected to be $2.10 to $2.25, compared to $2.45 in the prior year. Our tax rate for the first quarter is estimated at approximately 18%, and interest expense is projected to be approximately $20 million.

Speaker Change: First quarter earnings per share is projected to be $2 10 to $2 25 <unk>.

Speaker Change: Compared to $2 45 in the prior year.

Speaker Change: Our tax rate for the first quarter is estimated at approximately 18% and interest expense is projected to be approximately $20 million.

Zach Coughlin: And now moving to the full year. Overall, revenue is projected to be flat to up slightly on both the reported and constant currency basis compared to 2024. We expect our four-year operating margin will be flapped up slightly compared to 10% in 2024 and are projecting another record high non-GAAP earnings per share in the range of $12.40 to $12.75, up 9% at the top end. Our improved EPS outlook reflects a significant benefit from our share repurchases in 2024 and $500 million in planned share repurchases in 2025. We are excited to announce we will deliver these repurchases by entering in an accelerated share repurchase program in April.

Speaker Change: And now moving to the full year overall revenue is projected to be flat to up slightly on both a reported and constant currency basis compared to 2024.

Speaker Change: We expect our full year operating margin will be flat to up slightly compared to 10% in 2024 and are projecting another record high non-GAAP earnings per share in the range of $12 40 to $12 75 up 9% at the top end.

Speaker Change: Our improved EPS outlook reflects a significant benefit from our share repurchases in 2024 and $500 million in planned share repurchases in 2025, we.

Speaker Change: We are excited to announce we will deliver these repurchases by entering into an accelerated share repurchase program in April.

Zach Coughlin: From a regional perspective, Europe is planned to return to growth with revenue of low single digits in euros and across both DTC and wholesale, with sequential improvement order books, including confirmed growth in fall 2025. In the Americas, we are planning revenue up mid-single digits versus 2024, with low teens growth in wholesale, powered by the first significant women's wholesale transition to in-house. partially offset by a low single-digit decline in DTC due to the softness in the consumer backdrop we discussed earlier. In Asia-Pacific, due to the headwinds in China that I mentioned earlier, we are cautiously planning Asia-Pacific revenue down mid-single digits in constant currency.

Speaker Change: From a regional perspective.

Speaker Change: Europe is planned to return to growth with revenue up low single digits in euros and across both DTC and wholesale with sequential improvement in order books, including confirmed growth in fall 2025.

Speaker Change: In the Americas, we're planning revenue up mid single digits versus 2024 with low teens growth in wholesale powered by the first significant women's wholesale transition to in house, partially offset by a low single digit decline in DTC due to the softness in the consumer backdrop, we discussed earlier.

Speaker Change: In Asia Pacific due to the headwinds in China that I mentioned earlier, we are cautiously planning Asia Pacific revenue down mid single digits in constant currency.

Zach Coughlin: China has planned down low double digits, but we are still planning low single-digit growth in the rest of the region. And in our important licensing business, as Stefan mentioned earlier, we expect to deliver high quality growth in the 80% of our business outside of our relationship with G3. Gross margin for the year is expected to be down approximately 100 basis points compared to 2024, of which approximately half is due to the impact of the G3 transition in North America from licensed to wholesale, and the rest largely explained by the temporary impacts from centralizing the Calvin Klein global product chain.

Speaker Change: China is planned down low double digits, but we are still planning low single digit growth in the rest of the region.

Speaker Change: And in our important licensing business as Stefan mentioned earlier, we expect to deliver high quality growth in the 80% of our business outside of our relationship with G. III.

Speaker Change: Gross margin for the year is expected to be down approximately 100 basis points compared to 2024 of which approximately half is due to the impact of the <unk> III transition in North America from license to wholesale and the rest largely explained by the temporary impacts from centralizing the Calvin Klein global product kitchen.

Zach Coughlin: We expect that Calvin Klein product delays to primarily impact first-half gross margins, leading to lower gross margins in the first half and improving gross margins in the second half. We expect SG&A expense to be lower in 2025 compared to 2024, resulting in a decrease of approximately 100 basis points as a percentage of revenue.

Speaker Change: We expect that Calvin Klein product delays to primarily impact first half gross margins, leading to lower gross margins in the first half and improving gross margins in the second half.

Speaker Change: We expect SG&A expense to be lower in 2025 compared to 2024, resulting in a decrease of approximately 100 basis points as a percentage of revenue.

Zach Coughlin: Last year, we announced that we are embarking on the next phase of the Growth Driver 5 of the PBH Plus Plan to drive efficiencies and improve our ways of working. We have laid the groundwork for these initiatives, and we expect to drive significant cost savings in 2025, on top of the reductions we already realized in 2024, with savings showing up more powerfully as we progress through the year. to highlight a couple of these acts. In North America, we continue to make good progress streamlining our logistics operations to drive efficiencies and cost savings, including consolidating into two warehouses and in-housing our e-commerce distribution.

Speaker Change: Last year, we announced that we are embarking on the next phase of growth driver five of the PVH plus plan to drive efficiencies and improve our ways of working.

Speaker Change: We have laid the groundwork for these initiatives and we expect to drive significant cost savings in 2025 on top of the reductions we already realized in 2024 with savings showing up more powerfully as we progress through the year.

Speaker Change: To highlight a couple of these actions.

In North America, we continue to make good progress streamlining our logistics operations to drive efficiencies and cost savings, including consolidating into two warehouses and in housing our ecommerce distribution.

Zach Coughlin: This work will increase our U.S. warehouse capacity utilization from a little above 50% to approximately 85% to 90% and significantly decrease North America distribution expenses. And in IT, in the last 60 days, we have signed contracts with some of the world's largest and most innovative technology companies that will enable consolidation of our historically decentralized and fragmented technology stack into a single platform of global systems and deliver tens of millions of dollars of annual savings once implemented. These are important examples of the actions in Growth Driver 5 of the PBH Plus program. As we shared previously, we expect the total of our growth driver five actions deliver two to 300 basis points of operating margin expansion over As a result of this work, we expect our full-year operating margin will be flat to up slightly compared to 10% in 2024.

Speaker Change: This work will increase our U S warehouse capacity utilization from a little above 50% to approximately 85% to 90% and significantly decreased North America distribution expenses.

Speaker Change: And then.

In the last 60 days, we have signed contracts with some of the world's largest and most innovative technology companies that will enable consolidation of our historically decentralized and fragmented technology stack into a single platform, our global systems and deliver tens of millions of dollars of annual savings once implemented.

Speaker Change: These are important examples of the actions and growth driver five of the PVH plus plan.

Speaker Change: As we've shared previously we expect the total of our growth driver five actions to deliver two to 300 basis points of operating margin expansion over time.

Speaker Change: As a result of this work we expect our full year operating margin will be flat to up slightly compared to 10% in 2024 <unk>.

Zach Coughlin: While operating margins will be lower than last year early in the year, we'll see sequential improvements each quarter throughout 2025 based on the actions that are well underway. And we expect to exit 2025 and enter 2026 with significantly higher operating margins than 2024. Interest expense is projected to increase to approximately $85 million compared to $67 million in 2024 to fund the Accelerated Share Repurchase Agreement. And our tax rate for 2025 is estimated at approximately 22%, in line with our long-term commitment of low 20s%.

Speaker Change: Operating margins will be lower than last year early in the year, we will see sequential improvement each quarter throughout 2025 based on the actions that are well underway and.

Speaker Change: And we expect to exit 2025, and enter 2026 with significantly higher operating margins in 2024.

Speaker Change: Interest expense is projected to increase to approximately $85 million compared to $67 million in 2024 to fund the accelerated share repurchase agreements.

Speaker Change: And our tax rate for 2025 is estimated at approximately 22% in line with our long term commitment of low 20%.

Zach Coughlin: We have one other important change to announce. With the appointment of Frederick Olson as CEO AMEA and the promotion of Donald Kohler to CEO for all of the Americas, we now have our leadership team and operating model firmly in place to drive the PBH Plus plan forward.

Speaker Change: We have one other important change to announce with the appointment of Frederick Wilson as CEO of EMEA and the promotion of Donald color to CEO for all of the Americas. We now have our leadership team and operating model firmly in place to drive the PVH plus plan forward.

Zach Coughlin: As a result of that, beginning in 2025, we will be evolving our reported segments to be 1. Americas 2. Europe, the Middle East, and Africa 3. Asia Pacific and 4. a new standalone licensing segment Additionally, we'll be providing revenue data for each of the Calvin Klein and Tommy Hilfiger brands. Beyond aligning to our internal operating model, we also believe this will provide increased transparency to the dimensions of the business most relevant to understanding our financial performance.

Speaker Change: As a result of that beginning in 2025, we will be evolving our reported segments to be one Americans to Europe, the middle East and Africa, three Asia Pacific and for a new Standalone licensing segments.

Speaker Change: Additionally, we will be providing revenue data for each of the Calvin Klein and Tommy Hilfiger brands.

Speaker Change: Beyond aligning to our internal operating model. We also believe this will provide increased transparency to the dimensions of the business most relevant to understanding our financial performance.

Zach Coughlin: We plan to share recast quarterly and annual segment data for 2023 and 2024 on a Form 8K with our first quarter earnings release.

Speaker Change: We plan to share recast quarterly and annual segment data for 2023, and 2024 on a form 8-K with our first quarter earnings release.

Zach Coughlin: Before we open up for questions, I want to echo Stefan's sentiments earlier, thanking our associates all around the world for leaning into the PBH Plus plan and delivering our annual financial commitment in 2024 in spite of a choppy environment. Looking forward, we continue to work relentlessly to drive results in all aspects of our global business. While we remain agile to new developments, we have a clear plan in place to deliver continuous, sequential improvement throughout the year. Our goals are set, the team is focused, and through the PBH Plus plan, we are making progress to deliver on all of our commitments to our customers, associates, and shareholders.

Stefan Larsson: Before we open up for questions I want to Echo Stefan sentiments earlier thanking our associates all around the world for leaning into the PVH plus plan and delivering our annual financial commitments in 2024 in spite of a choppy environment.

Stefan Larsson: Looking forward, we continue to work relentlessly to drive results in all aspects of our global business, while we remain agile to new developments with a clear plan in place to deliver continuous sequential improvement throughout the year.

Our goals are set the team is focused and through the PVH plus plan, we're making progress to deliver on all of our commitments to our customers associates and shareholders.

Operator: And with that, operator, we would like to open it up to questions. Thank you very much, sir. At this time, if you'd like to ask a question, please press star 1 on your telephone keypads. You may remove yourself from the queue at any time by pressing star 2.

Stefan Larsson: And with that operator, we would like to open it up to questions.

Stefan Larsson: Thank you very much Sir at this time I would like to ask a question. Please press star one on your telephone keypad, you may remove yourself from the queue at any time by pressing star to you. We will take our first question from Jay sole with UBS. Please go ahead.

Jay Sole: We'll take our first question from Jay Sole with UBS. Please go ahead. Great, thank you so much. My question is about Europe. Stefan, can you talk about what you've learned from the Quality of Sales Initiative? And how does the PVH Plus plan, elevated level of execution that you've shown, you know, how is that really impacting the business? Can you give us a little bit more color on that too? Thank you. Absolutely. Good morning, Jay. And thank you for your question. Europe is such a great story of progress and how we connect PVH plus to high quality growth, to drive sustainable high quality growth.

Jay Sole: Great. Thank you. So much my question is about Europe.

Jay Sole: Can you talk about what you've learned from the quality of sales initiatives and.

Jay Sole: How does the PVH plus planned elevated level of execution that you've shown how is that really impacting that business can you give us a little bit more color on that too. Thank you.

Jay Sole: Yes.

Jay Sole: Absolutely good morning, Jay and thank you for your question.

Jay Sole: Europe is such a great <unk>.

Jay Sole: Story of our progress and how we connect PVH plus two high quality growth to drive sustainable high quality growth.

Stefan Larsson: So if we go back to how we started at 24, we saw a tougher consumer backdrop in Europe. And we took three very focused quality of sales actions. We stopped third party sales of our brands on digital platforms. We reduced the number of digital platforms we sold to. We improved inventory in relation to sales overall. So those were the three actions. And then in parallel, we leaned into the PVH plus execution in strengthening product relevance, the consumer engagement, our marketing, the marketplace execution across both Tommy and Calvin. And you can really see the effect of the three quality of sales actions with the improvements of the PVH plus execution next level in Tommy and Calvin.

Jay Sole: If we go back to how we started 2004, we saw a tougher consumer backdrop in Europe and.

Jay Sole: And we.

Jay Sole: Took three very focused quality of sales actions, we stopped third party sales of our brands on digital platforms. We've reduced the number of digital platforms, we sold too.

Jay Sole: We improved inventory in relation to sales overall, so those were the three actions we took and then in parallel we leaned into the PVH plus execution is strengthening product relevance.

Jay Sole: Consumer engagement, our marketing the marketplace execution across both Tommy and Calvin you can really see the effect.

Jay Sole: <unk> quality of sales actions with the improvements of the PVH plus execution next level in Tommy and Calvin you can see that indeed to see Q3, and Q4 coming back to high quality growth. So high quality growth stronger gross margin indeed to see and then youll see see somebody.

Zach Coughlin: You can see that in D2C Q3 and Q4 coming back to high quality growth. So high quality growth, stronger gross margin in D2C. And then you see season by season how we strengthen forward looking wholesale order books.

Jay Sole: And how we strengthen forward looking wholesale order books.

Stefan Larsson: really excited and feeling great job by the team to then translate that into growth for fall 25 low single digit growth. And this is our team in Europe, doing a great job in connecting, putting more and more relevance and strength into the brand. really strong market team execution and really close partnership with our partners. So also connecting back to how we started at 25 and I mentioned in my prepared remarks how we pulled together 300 global most important partners, many of them from Europe, and I was able to engage with many of them one-on-one and really seeing and hearing that they see the progress as well and that that translates into growth.

Really excited.

Jay Sole: Feeling great job by the team to then translate that into growth for fall 'twenty five low single digit growth and this is our team in Europe doing a great job in connecting putting more and more relevance of strength into the brands.

Jay Sole: Really strong market team execution, and really close partnership with our partners. So also connecting back to how we started at 25% and I mentioned in my prepared remarks, how we pulled together 300 global most important partners many of them from Europe, and I was able to engage with <unk>.

Speaker Change: Any of them one on one and really seeing and hearing that they see the progress as well and that that translates into growth, Yes, hi, Jay and just to put some financials behind that as Stefan mentioned, we expect to return to growth and.

Zach Coughlin: Yeah, hi Jay, and just to put some financials behind that, as Stefan mentioned, we expect a return to growth and importantly we expect Europe profitability in euros to also grow by a low double-digit percent this year, so it really does float through the forecast. Got it. Sounds great. Thank you so much. Thank you.

Jay Sole: And importantly, we expect Europe profitability in euros to also grow by a low double digit percent. This year. So it really does flow through the full P&L.

Speaker Change: Got it sounds great. Thank you so much.

Michael Binetti: Thank you. Our next question comes from Michael Binetti with Evercore ISI. Please go ahead.

Michael Binetti: Our next question comes from Michael Binetti with Evercore ISI. Please go ahead. Thank you for taking my question, and Stefan, it's really nice to see the Europe order books turn positive. I know we've talked a lot through that journey. I know it took a lot of work. Very nice to see how you guys worked hard.

Michael Binetti: Taking my question and Stefan it's really nice to see the Europe order books turned positive.

Michael Binetti: We've talked a lot through that journey and I took a lot of work <unk> has worked hard on it.

Zach Coughlin: A bit more of a financial question, I guess, for me, Zach, as you look at them, you gave us a big basket of margin drivers here, a fairly complicated year.

Michael Binetti: A bit more of a financial question I guess for me.

Michael Binetti: Is that because you look at the you gave us a big basket of margin drivers here are fairly complicated year as you look out past this year.

Zach Coughlin: As you look out past this year, How should we think about the multi-year, the 2026 margin profile? You have SG&A savings coming in, it sounds like, mostly in the back half of the year. I think the run rate was 200 to 300 basis points annualized. You have about 50 basis points of CK disruption from product this year. Is there any reason that doesn't just mechanically come back in 2026?

Michael Binetti: How should we think about the multi year. The 2026 margin profile you have you have SG&A savings coming in it sounds like mostly in the back half of the year I think the run rate was two to 300 basis points annualized.

Michael Binetti: About 50 basis points of CK disruption from product. This year is there any reason that doesn't just mechanically come back in 2026, and then also so it seems like Theres a good basket of margin drivers as you look past. This year into 2026 are there any new headwinds that come online next year that we should be thinking about or even <unk>.

Zach Coughlin: And then also, so it seems like there's a good basket of margin drivers as you look past this year into 2026.

Zach Coughlin: Are there any new headwinds that come online next year that we should be thinking about or any even tailwinds that I didn't mention here yet?

Michael Binetti: And I didn't mention here yet.

Stefan Larsson: All right, first, thank you, Michael, for the call out on Europe. Credit goes to the teams and our partners. Great job by them.

Speaker Change: Alright, Thank you Michael for the call out on Europe credit goes to the teams and our partners great job by that it's coming back to your question now on the value drivers. So let me just start from a business perspective, and then Sac.

Zach Coughlin: Coming back to your question now on the value drivers, let me just start from a business perspective, and then Zach will take you through more in detail. We have big positive value drivers in the second half that are not dependent on a change in the trajectory of the consumer for 2025. So the first is European order books that are coming back to growth in Fall 2025. The second is that a big part of our cost efficiency work that we have been on now for a while is taking full hold in the back half. And then you see the Calvin Klein margin, as Zach mentioned, improving already in the back half.

Speaker Change: Take you through more in detail, we have big prostitute value drivers in the second half that are not dependent on a change in the trajectory of the consumer for 2025. So the first is European order books that coming back to growth and $4 25.

Speaker Change: Second is stopped a big part of our cost efficiency work stuff may have been on now for a while is taking full hold in the back half and then you'll see the Calvin Klein March MFS Sac mention.

Speaker Change: Improving is already in the back half so you'll see us exit the year.

Stefan Larsson: So you'll see us exit the year as a leaner, more profitable company. And then to the ASR accelerated share repurchase, you will see that we do that with a smaller share count. So what this means is that we've come into 2026 and we're already working and planning for 26 to come into 26 with a step up in profit levels. And then through the PVH plus execution, we keep building on that.

Speaker Change: Leaner more profitable company and then to the ASR accelerated share repurchase you will see that we do that we had a smaller share count. So what this means is that will come into 2026, and we are already working and planning.

Speaker Change: 426.

Speaker Change: To come into 26 with a step up in profit levels and then through the PVH class execution, we keep building on that.

Zach Coughlin: Thank you, Stephan. I think what's most important, Stephan has said, is the actions that we're planning throughout the year as we progress from the first quarter to the fourth quarter are really built on things in our control. Stephan laid out what those pieces are. And so that work is either already confirmed for things like the European order books or well underway around much of the cost action, which is really probably the most powerful driver of improvement from the start of the year. So we expect fourth quarter operating margin to be much higher than 2024. And that's really the new starting point as we enter 2026, because the building blocks that Stephan laid out are really foundation building that raised the water level that we would then move forward into 2026.

Speaker Change: Thank you Stefan I think what's most important is Stefan has said is the actions that we're planning throughout the year as we progress from.

Speaker Change: From the first quarter to the fourth fourth quarter really built on things in our control Stefan laid out what those pieces are.

Speaker Change: And so that work is either already confirmed for things like the European order books or well underway around much of the cost action, which is really probably the most powerful driver of improvement from the start of the year. So we expect fourth quarter operating margin to be much higher than 2024.

Stefan Larsson: That's really the new starting point as we enter 2026 because of the building blocks of Stefan laid out are really foundation building that raised the water level that we would then move forward into 2026 from there.

Michael Binetti: Okay, thanks a lot guys, I appreciate it.

Speaker Change: Okay. Thanks, a lot guys I appreciate your help.

Dana Telsey: We'll next go to Dana Telsey with Telsey Group. Please go ahead. Hi, good morning, everyone, and nice to see the progress. Congratulations. As you think about the connections, Stefan, between product and engagement, there's a lot going on in each brand. As you think of the timing of it, how do you think of it rolling out this year? How do you think of the different global regions? And what does marketing spend look like to drive this engagement? Thank you. Thank you, Dana. You know, we have been very focused on systematic and repeatable approach to bring product strength, consumer engagement, marketing strength, and then translating that to impact with the partners and our consumers.

Dana Telsey: We'll next go to Dana Telsey with Telsey Group. Please go ahead.

Dana Telsey: Hi, good morning, everyone and nice to see the progress congratulations.

Speaker Change: Do you think about the connection Stefan between product and engagement there is a lot going on in each brand.

Speaker Change: Think of the timing of that how do you think about rolling out this year, how do you think of the global regions and what its marketing spend look like to drive.

Speaker Change: Thank you.

Dana Telsey: Yes, Thank you Dana.

Speaker Change: You know we have been very focused all systematic and repeatable approach to bring product strength customer engagement marketing strength, and then translating that to impact with our partners and our consumers, but sometimes it's better to describe this with concrete example, so what you see right now.

Stefan Larsson: But sometimes it's better to describe this with concrete examples. So what you see right now in Calvin Klein with our underwear, cut-through underwear campaign with Bad Bunny is really putting these pieces together. So what you will see every season going forward, you will see a cut-through campaign from Calvin Klein and a cut-through campaign from Tommy Hilfiger. So going back to the underwear Calvin Klein Bad Bunny. What we're doing there is we're leaning into our key growth categories and the most important category for Calvin Klein Underwear. We're leaning into the most important hero product, the cotton stretch, and we're putting a lot of innovation into that hero product, creating a new hero product with the most innovation in the industry.

Dana Telsey: In Calvin Klein with our underwear Cup through underwear campaign with pad funny.

Dana Telsey: It's really putting these pieces together so what you will see season.

Dana Telsey: Every season going forward, you will see a capture of campaign for Calvin Klein and a cultural campaign for Tommy Hilfiger, So going back to the underwear Calvin Klein pad Bonnie.

Dana Telsey: What we're doing there is we are leaning into our key growth categories and the most important category for Calvin Klein underwear, we're putting a lot of we're leaning into the most important hero product cutoffs stretch and we're putting a lot of innovation into that hero product, creating a new.

Dana Telsey: Hero product with the most innovation in the industry and then we build that into a capture of campaign and we collaborate with somebody like Bob <unk>, who is one of the most streamed art is one of the most popular claimed artist right now.

Stefan Larsson: And then we build that into a cut-through campaign and we collaborate with somebody like Bad Bunny, who is one of the most streamed artists, one of the most popular, acclaimed artists right now. And then you see unlocking the growth category, innovation in the hero product, the talent amplification from Bad Bunny, and then you see it in the impact in the doors and stores. Yes, you see it in the social media impact of reaching almost 30 million on Calvin's Instagram page, the number of views. tens of millions of views within the first few days on the Bad Bunny video.

Dana Telsey: And then you see unlocking the growth category innovation and the hero product.

Dana Telsey: The talent amplification for bad Bonnie and then Youll see it in the impact of the door. So stores, yes, you see it in the social media impact of reaching almost $30 million on Calvert assessed around page the number of views.

Dana Telsey: Tens of millions of views within the first few days on the bad <unk> video, but then you see that translating into traffic and stores and ecommerce sales. So all of the icon koto stretch in many of our channels was up 20% to our previous.

Stefan Larsson: But then you see that translating into traffic and stores and e-commerce sales of the icon Cotton Stretch in many of our channels was up 20% to our previous Cotton Stretch products.

Speaker Change: Qatar stretch products. So that's an example for Calvin Klein on Tommy you'll see the Thomas C. Some by C. Sub brand named Tommy lifestyle of Classic American Coal's made Colorado capitalized. So told me and the team just came back from the Caribbean having.

Stefan Larsson: So that's an example for Calvin Klein. On Tommy, you see the Tommy season by season bringing the Tommy lifestyle of classic American cool made current come to life. So Tommy and the team just came back from the Caribbean, having invited a number of really important talent, partners to the brand, Patrick Schwarzenegger with the White Lotus Connection, Madeleine Klein, Abbey Champion, to a Hilfiger resort themed event. event. And this will support our summer campaign in our wholesale doors in our stores. And it launches in May, but it covers the whole summer period. But already pre-launch, we have 160 million, as I mentioned, social media posts just from the talent posting while they were part of creating this event.

Speaker Change: Having invited a number of really important Taylor partners to the brand Patrick's Schwarzenegger with a white Loaf disconnection modeling slide Abbott champion to our Hilfiger resort themed.

Speaker Change: At that and this will support our summer campaign in our wholesale doors in our stores and it launched us in may but it covers.

Speaker Change: The whole summer period, but already pre launch we have $160 million as I mentioned, social media posts just from the tablet posting wise they were part of creating this event. So what you will see going forward. This season by season, you will see.

Dana Telsey: So what you will see going forward is season by season, you will see cut-through campaign by cut-through campaign connecting the improved product strength with improved marketing with improved partner and in-store execution. And then we'll be relentless of just keep improving. Thank you. And next. And the... and then the marketing spend. marketing spent, we continue to invest in growth and marketing is one of the top priorities. Thank you. Thanks, Dana. Thank you.

Speaker Change: Telstra cultural campaign by capture campaign connecting the improved product strengths with improved marketing with improved heartburn in the in store execution and then we'll be relentless of just keep improving.

Speaker Change: Thank you the next.

Speaker Change: And on the marketing spend.

Speaker Change: The marketing spend we continue to invest in growth and marketing is one of the top priorities there.

Speaker Change: Thank you.

Dana Telsey: Thanks Dana.

Brooke Roach: Next we'll go to Brooke Roach with Goldman Sachs. Please go ahead. Good morning and thank you for taking my question.

Speaker Change: Thank you our next well go to brick Roche with Goldman Sachs. Please go ahead.

Dana Telsey: Good morning, and thank you for taking my question I.

Brooke Roach: I was hoping you could elaborate on your relationship with your wholesale partners in North America as you execute the PVH Plus plan. What are your conversations trending like today and what's your outlook for growing in your core and with the business that was just brought back from G3? Thank you. Yes, so thanks, Brooke. So very, very strong partnerships with our key wholesale partners in North America and across the world. But specifically in North America, what the team is doing a really good job on is focusing in on each of the brands and driving product strength, product relevance in optimized spaces with the right marketing support.

Dana Telsey: I was hoping you could elaborate on your relationship with your wholesale partners in North America as you execute the PVH plus plan.

Dana Telsey: Are your conversations like today and what's your outlook for growing in your core and with the business that was just brought back from Geoffrey Thank you.

Speaker Change: Yes, so thanks, Brooke so very strong partnerships with our key wholesale partners in North America and across the World are specifically in North America. What the team is doing a really good job on focusing in on each of the brands and driving product strength.

Dana Telsey: Products relevance in.

Speaker Change: In optimized spaces with the right marketing support so.

Stefan Larsson: So Calvin Klein has a great milestone with Macy's this morning, Herald Square, for those of you who are in New York today, Macy's flagship, all windows are taken over by Calvin Klein and the launch of Calvin Klein windows. And marketing support by Lily Collins resonated really well with the Macy's consumer. And you see early first couple of weeks, we are having the collection, putting the shops together. But that's what you will see from us, that consistency in driving product relevance, brand relevance, differentiation to that North America wholesale consumer. So, very excited about seeing the progress season out.

Speaker Change: Calvin Klein has a great milestone with Macy's. This morning Herald square for those of you who are in New York today Macy's flagship all the windows are taken over by Calvin Klein and the launch of Calvin Klein Womens and marketing support by Lilly colleagues resonated really well with the Macy's crossover.

Speaker Change: And Youll see early first couple of weeks, we are having the collection, putting the shops together, but thats, what you will see from our staff cost system same driving.

Speaker Change: Product relevance brand relevance and differentiation.

Speaker Change: To that North America wholesale customers so.

Speaker Change: We're very excited about seeing the progress season after season.

Speaker Change: Great. Thanks, so much.

Matthew Boss: We'll next go to Matthew Boss with J.P.

Speaker Change: We'll next go to Matthew boss with Jpmorgan. Please go ahead.

Matthew Boss: Morgan. Please go ahead. Great, thanks.

Speaker Change: Great. Thanks, So stephane could you elaborate on the recent change <unk> seen in North America, just how youre planning inventory across DTC at both Calvin and Tommy over the course of the year and then Zach if you could just walk through drivers of first quarter gross margin the decline and just the cadence of gross margin beyond the first quarter ticket.

Stefan Larsson: So, Stefan, could you elaborate on the recent change you've seen in North America, just how you're planning inventory across DTC at both Calvin and Tommy over the course of the year?

Zach Coughlin: And then, Zac, if you could just walk through drivers of first quarter gross margin, the decline, and just the cadence of gross margin beyond the first quarter to consider. Yeah, thanks, Matt. So let me start by the North America backdrop. And as we mentioned, we and looks like most everyone in the sector saw a step back from the consumer in February. So there is clearly a challenged backdrop. We saw March slightly improving, stabilizing trends. But as Easter is three weeks later this year than last year, Easter is an important consumer moment in North America. We have to look at March and April together.

Speaker Change: Sure.

Speaker Change: Yeah. Thanks, Matt So let me start by.

Speaker Change: The North America backdrop, and as we mentioned we.

Speaker Change: It looks like most everyone in the sector saw a step back from the <unk> of February. So there is clearly a challenging backdrop.

Speaker Change: We saw March slightly improving stabilizing trends, but as Easter is three weeks later this year than last year Easter is an important cultural moment in North America, we have to look at March and April together, but our outlook is reflecting the current trends that we see and then our <unk>.

Stefan Larsson: But our outlook is reflecting the current trends that we see. And then our focus is to be fully on what we can control driving strength in the product, the marketing, the marketplace execution. On the inventory side, we feel really good about our inventory levels and especially the composition, because when you look at the inventory we have right now, it's more fresh and less aged than same time last year. So stock freshness is really important to us as we become more data and demand driven. Then we have better investments coming into 25 in core essentials hero products.

Speaker Change: Focus is to be fully on what we can control driving strength in the product the marketing to marketplace execution on the inventory side, we feel really good about our inventory level set, especially the composition because when you look at the inventory we have right now.

Speaker Change: It's.

Speaker Change: Sure.

Speaker Change: More fresh and less <unk>.

Speaker Change: H than same time last year. So stop freshness is really important to us as we become more data and demand driven than we have battery investments coming into 'twenty five in core Essentials hero products. One example of that test iPhone, Qatar stretch, the new hero product with about a tougher comp.

Zach Coughlin: One example of that is the Icon Cotton Stretch, the new hero product with the Bad Bunny cut through campaign. And then we have inventory backing up the transition from G3 on the women's sportswear.

Speaker Change: And then we have inventory backing up.

Speaker Change: <unk> from G. III on the women's sportswear, so all in all feeling really good about that.

Zach Coughlin: So all in all, feeling really good about that. Yeah.

Zach Coughlin: And I'm Matt. For a gross margin for the first quarter for the year, we're indicated down around 250 basis points. If you think about the drivers that impacted us in the fourth quarter, you've got an increased promotional environment, especially in the U.S. We've got increased freight costs. And then obviously we've got some wholesale mix that's driving gross margin that doesn't have any impact on profitability. I think then as we come into the first quarter, the only new item in there is really the intake of the G3 women's sportswear that has around a 50 basis point negative margin and gross margin as we move from a licensing business model into a wholesale business model.

Speaker Change: IMAX for gross margin for the first quarter for the year were indicated down around 250 basis points.

Speaker Change: Do you think about the drivers that impacted us in the fourth quarter you have got an increased promotional environment, especially in the U S. We've got increased freight costs.

Speaker Change: And then obviously, we've got some wholesale mix that's driving gross margin that doesn't have an impact on profitability I think that as we come into the first quarter. The only new item in there is really the intake of the G. III women's sportswear that has around a 50 basis point.

Speaker Change: Negative margin and gross margin as we move from a licensing business model into a wholesale business model.

Zach Coughlin: So for the full year, we're expecting to be down around 100 basis points. That's around 50 basis points tied to the G3 intake we just talked about, and the rest really explained by the impacts of some of the CK product delays, which will primarily affect the first. So if we think about that steady progression from that down 250 landing to a four-year 100, the wholesale mix will normalize. We'll work on the freight impacts. That begins to normalize, and we end the year with a number much closer to something really related, tied to just the G3 business model.

Speaker Change: So for the full year, we're expecting to be down around 100 basis points. That's around 50 basis points tied to the G. III intake, we just talked about and the rest really explained by the impacts of some of the CK product delays, which will primarily affect the first half. So if we think about that steady progression from that down to 50 landing to a full.

Speaker Change: Year 100.

Speaker Change: Wholesale mix will normalize.

Speaker Change: We will work R&D freight impacts that began to normalize and we ended the year with a number much closer to something really related tied to just the G III business model transition.

Speaker Change: Okay.

Zach Coughlin: We'll next go to our last question with John Kernan with TV Cow and please go ahead.

Speaker Change: We'll next go to our last question with John Kiernan with TD Cowen. Please go ahead.

Krista Zuber: Good morning, it's Krista Zuber on for John. Thank you for taking our questions. Just one follow-up on the inventory. You've made such tremendous inroads in cleaning up the channels. You know, the focus on the disciplines, SKU planning and the rationalization. How should we think about, you know, given some of the product puts and takes that are happening this year with the transition from the license? How should we think about the opportunity to accelerate your inventory turns given, you know, two years of what now appears to be sort of a stabilization in your terms? Thank you.

Speaker Change: Good morning Christy.

Speaker Change: Krista Zuber on for John Thank you for taking our questions. Just one follow up on the inventory you've made such tremendous inroads in cleaning up the channels.

Speaker Change: The focus on the discipline.

Speaker Change: Are you planning on the rationalization, how should we think about given some of the product puts and takes that are happening this year with the transition from the license.

Speaker Change: Should we think about the opportunity to accelerate your inventory turns given two years of what now appears to be sort of a stabilization in near term. Thank you.

Stefan Larsson: Thanks, Christine. The way we think about it and the way we work with inventory is to season by season get better in the planning and the buying of the assortment, better with planning and buying of the inventory connecting to that assortment. So better and better optimize inventory to demand. And then we'll continue to learn. But long term, the goal is to continue to optimize inventory to demand. And then sometimes we learn when we go too lean, and then we have to take a step back in specific areas of the assortment, like the never out of stock or a new product launch.

Speaker Change: Thanks, Chris.

Speaker Change: The way, we think about it and the way we work with inventory to.

Speaker Change: Season by season get better in the planning and the buying of the assortment better.

Speaker Change: Planning and buying of the inventory connecting to that assortment, so better and better optimize inventory to demand and then we'll continue to learn but long term. The goal is to continue to optimize inventory to demand and then sometimes we learn when we go to lean and then we have to take a step back in specific.

Speaker Change: Rick.

Speaker Change: Areas of the assortment like a never out of stock or a new product launch, but long term youll see that will continue to become more data on demand driven.

Stefan Larsson: But long term, you'll see that we'll continue to become more data and demand driven and step by step better and better optimize inventory to demand.

Speaker Change: Step by step better and better optimize inventory to develop.

Stefan Larsson: Okay, given that that was the last question, just want to thank you for being on this journey with us. We're in the middle of unlocking the full potential of Calvin Klein and Tommy Hilfiger, two of the most globally iconic and beloved brands. And 2024 was a year of significant progress in both brands or regions. 2025, you'll see us leaning into the next level execution at pace and building on the execution momentum of 2024. And I'm really very proud of our team's work, our partners, and we are full steam ahead. So looking forward to connecting again a quarter from now.

Speaker Change: Okay, given that that was the last question just want to thank you for being on this journey with US we are in the middle of.

Speaker Change: Unlocking the full potential of Calvin Klein and Tommy Hilfiger at two of the most globally iconic and beloved brands.

Speaker Change: In 2024 was a year of significant progress in both France, or readjust 25, you will see us leaning in to the next level execution at pace and building on the execution momentum all 24 and I'm really.

Speaker Change: Very proud of our team's work to our partners and we are full steam ahead. So looking forward to connecting again a quarter from now thank you.

Stefan Larsson: Thank you.

Speaker Change: Thank you and ladies and gentlemen that does conclude today's program. Thank you for your participation you may disconnect at any time.

Operator: And ladies and gentlemen, that does conclude today's program. Thank you for your participation. You may disconnect at any time.

Speaker Change: Okay.

Speaker Change: [music].

Operator: [music] to the [music] Good morning, everyone, and welcome to today's PVH fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and one key on your touchtone phone. Please note this call may be recorded and that I will be standing by should you need any assistance.

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Speaker Change: Good morning, everyone and welcome to todays PVH fourth quarter and full year 2024 earnings conference call. At this time all participants are in a listen only mode. Later, you will have an opportunity to ask questions. During the question and answer session.

Speaker Change: Registered to ask a question at any time by pressing the star and one key on your Touchtone phone. Please note. This call may be recorded and then I will be standing by should you need any assistance. It is now my pleasure to turn the program over to MS. Cheryl Freeman Senior Vice President of Investor Relations. Please go ahead.

Sheryl Freeman: It is now my pleasure to turn the program over to Sheryl Freeman, Senior Vice President of Investor Relations. Please go ahead. Thank you, Operator.

Speaker Change: Thank you operator, good morning, everyone and welcome to the PVH Corp, fourth quarter and full year 2024 earnings conference call, leading the call today will be Stefan Larsson, Chief Executive Officer, and Zach Coughlin Chief Financial Officer.

Sheryl Freeman: Good morning, everyone, and welcome to the PVHCorp fourth quarter and full year 2024 earnings conference call. Leading the call today will be Stefan Larsson, Chief Executive Officer, and Zach Coughlin, Chief Financial Officer.

Operator: This webcast and conference call is being recorded on behalf of PVH and consists of copyrighted material. It may not be recorded, rebroadcast, or otherwise transmitted without PVH's written permission. Your participation constitutes your consent to having anything you say appear in any transcript or replay available.

Speaker Change: Casting conference call is being recorded on behalf of PVH and consist of copyrighted material. It may not be recorded rebroadcast or otherwise transmitted without pvh's written permission.

Speaker Change: <unk> patient constitutes your consent to having anything you say appear on any transcript or replay of this call.

Sheryl Freeman: The information to be discussed includes forward-looking statements that reflect PVH's view, as of March 31, 2025, of future events and financial performance. These statements are subject to risks and uncertainties indicated in the company's SEC filings, and the same purpose statement included in the press release that is the subject of this webinar. These include PVH's right to change its strategies, objectives, expectations, and intentions, and the company's ability to realize anticipated benefits and savings from divestitures, restructuring, and similar plans, such as the Headcount Cost Reduction Initiative announced in August 2022, the 2021 sale of Assessive and exits from its Heritage Brands menswear and retail businesses, the November 2023 sale of the Heritage Brands women's intimate apparel business to focus on its Calvin Klein and Tommy Hilfiger businesses, and its current multi-year initiative to simplify its operating costs.

Speaker Change: The information to be discussed includes forward looking statements that reflect pvh's view as of March 31, 2025 of future events and financial performance. These statements are subject to risks and uncertainties indicated in the Companys SEC filings and the Safe Harbor statement included in the press release and the subject of this call. These include at PV.

Speaker Change: <unk> continued its strategies objectives expectations and intentions and the companys ability to realize the anticipated benefits and savings from divestitures restructuring and similar brands such as the head count cost reduction initiatives announced in August 2022, the 2021, South Africa and exits from its heritage brands menswear.

Speaker Change: And retail businesses.

Speaker Change: <unk> 2023, some of the heritage Brands' women's intimate apparel business to focus on is Calvin Klein and Tommy Hilfiger businesses in its current multi year initiatives to simplify our operating model PVH does not undertake any obligation to update publicly any forward looking statement, including without limitation any estimates regarding revenue.

Sheryl Freeman: PVH does not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimates regarding revenue or earnings. Generally, the financial information and projections to be discussed will be on a non-GAAP basis as defined under SEC.

Speaker Change: Our earnings generally the financial information and projections to be discussed will be on a non-GAAP basis as defined under SEC rules reconciliations to GAAP amounts are included in Pvh's fourth quarter 2024 earnings release, which can be found on www dot PVH dot com and the company's current report on form 8-K.

Sheryl Freeman: Reconciliations to GAAP amounts are included in PVH's fourth quarter 2024 earnings release, which can be found on www.pvh.com and in the company's current report on Form 8K, furnished to the SEC in connection with the release.

Speaker Change: Furnished to the SEC in connection with the release at this time I am pleased during the conference all participant Emerson.

Stefan Larsson: At this time, I am pleased to turn the conference over to Stefan Larsson. Thank you, Sheryl. Good morning, everyone, and thank you for joining our call today. I want to start by thanking our teams around the world for delivering a strong fourth quarter and finish to the year. Through the strength of our two iconic global brands, Calvin Klein and Tommy Hilfiger, and the disciplined execution of our multi-year brand-building growth plan, the PBH Plus plan, we over-delivered on both the top and bottom line versus our initial fiscal 2020 forecast. with stronger-than-expected revenue on a constant currency basis and higher-than-expected non-GAAP EPS.

Stefan Larsson: Thank you Cheryl good morning, everyone and thank you for joining our call today I want to start by thanking our teams around the world for delivering a strong fourth quarter and finish to the year.

Stefan Larsson: Through the strength of our two iconic global brands, Calvin Klein and Tommy Hilfiger, and the disciplined execution of our multi year brand building growth plan. The Pvs plus plan, we over delivered on both the top and bottom line versus our initial fiscal 2024 guidance with stronger than expected.

Stefan Larsson: Revenue on a constant currency basis and higher than expected non-GAAP EPS.

Stefan Larsson: In addition, we increased our gross margin by 120 basis points to a new record, and even with the fixed cost deleveraging from our Europe business, we maintained our double-digit EBIT margins at 10% as we focused on driving cost efficiencies across For more information visit www.fema.gov For the fourth quarter, we delivered a strong holiday performance that beat our expectations. On a constant currency basis, we drove low single digit revenue growth, with growth in both our D2C and wholesale channels, excluding the sale of our heritage business and the 53rd week in 2022. which supports our planned return to growth during 2020.

In addition, we increased our gross margin by 120 basis points to new record and even with the fixed cost deleveraging from our Europe business, we maintained our double digit EBIT margins at 10% as we focus on driving cost efficiencies across the company.

Stefan Larsson: For the fourth quarter, we delivered a strong holiday performance that beat our expectations on a constant currency basis, we drove low single digit revenue growth with growth in both our D to C and wholesale channels, excluding the sale of our heritage business and the 50 <unk> week in 2023.

Stefan Larsson: Supports our planned return to growth during 2025.

Stefan Larsson: 2024 marked a major step towards our vision to build Calvin and Tommy into the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our. We connected both Calvin and Tommy to the site guys through our marketing, driving a record consumer engagement. We improve the relevance of sell-through of our Fall 2024 product assortment across both brands. We're turning Europe back to growth with improved performance in both D2C and wholesale, where we drove two consecutive quarters of growth in our stores, as well as moving our European wholesale order books back to growth.

Stefan Larsson: 2024 marked a major step towards our vision to build Calvin and Tommy into the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our sector.

Stefan Larsson: We connected both Calvin and Tommy to the side guys through our marketing driving a record consumer engagement, we improved our relevance as sell through of our fall 'twenty four product assortment across both brands returning to Europe back to growth with improved performance in both <unk>.

Stefan Larsson: In wholesale where we drove two consecutive quarters of growth in our stores as well as moving our European wholesale order books back to growth.

Stefan Larsson: Despite the tough macro, we kept Asia growing on a constant currency basis, on top of two consecutive years of double-digit constant currency. And we significantly increased our profitability in North America, including a double-digit EBIT margin rate for our combined Calvin and Tommy business in the region. We are working more closely than ever with our wholesale partners. And in January, we brought together more than 300 key partners for one of our largest ever Global Partner Days to kick off fall 25 market. Their feedback was very positive around the improved product, marketing, and marketplace execution, and we'll build on this momentum together in 2021.

Stefan Larsson: Despite the tough macro we kept to Asia growing on a constant currency basis on top of two consecutive years of double digit constant currency growth and we significantly increased our profitability in North America, including a double digit EBIT margin rate for our combined Calvin.

Stefan Larsson: Tommy business in the region.

Stefan Larsson: We are working more closely than ever with our wholesale partners and in January we brought together more than 300 key partners for us.

Stefan Larsson: One of our largest ever Global Park 10 days to kickoff fall 25 market launch their feedback was very positive around the improved product marketing and marketplace execution and we'll build on this momentum together in 2025.

Stefan Larsson: We stood up our global product kitchen for Calvin, and created the strongest product assortment so far for Tommy, which launches this fall. And it was a big part of helping to return our European order books back to growth for 2020. We drove significant cost efficiencies while simplifying our organization and shifting our culture to become brand builders with a strong consumer focus. We put in place our technology roadmap, taking important steps to becoming a data and demand driven company. We have a strong management team in place with experience and capabilities to bring our vision to life.

Stefan Larsson: We stood up our global product kitchen for Calvin and created the strongest product assortment, so far for Tommy which launches this fall and it was a big part of helping to return our European order books back to growth for 2025.

Stefan Larsson: We drove significant cost efficiencies, while simplifying our organization and shifting our culture to become brand builders with a strong consumer focus.

Stefan Larsson: We put in place our technology roadmap, taking important steps to becoming a data and demand driven company.

Stefan Larsson: We have a strong management team in place with experience and capabilities to bring our vision to life.

Stefan Larsson: For all this progress, there is no question that 2024 was a challenging environment. And I'm especially proud of our team for executing so well, despite the macro issues.

Stefan Larsson: For all of this progress there is no question that 2024 was a challenging environment and I'm, especially proud of our team for executing so well despite the macro issues at hand.

Stefan Larsson: Now let me share a bit more of what drove our performance in the fourth quarter, full year, both from a global brand and regional perspective, and then I'll move into how we will drive growth during 2025.

Stefan Larsson: Now, let me share a bit more of what drove our performance in the fourth quarter full year, both from a global brand and regional perspective, and then I'll move into how we will drive growth during 2025.

Stefan Larsson: Starting with Calvin Klein. We started 2024 with Calvin's explosive spring campaign featuring Jeremy Allen White, driving record visibility and engagement, which we continue to build on through the year. In the fourth quarter, we continue to tap into Calvin's iconic DNA to drive global brand heat, cutting through with mega talent, Kendall Jenner, Idris Elba, Min Ju, Alexander Skarsgård, and for fall, Greta Lee and Jeremy Ellen White headline global campaigns for our iconic underwear and denim.

Stefan Larsson: Starting with Calvin Klein, we started 2024 Recalibrates explosives spring campaign, featuring Jeremy male and white driving record disability and engagement, which we continue to build on through the year in.

Stefan Larsson: In the fourth quarter, we continued to tap into Calvert and cyclonic DNA to drive global brand heat chopping through with Mega talent Kendall Jenner Idris Elba menu Alexander scores scored and for fall rapidly and Jeremy male and white headline global campaigns for our iconic omni.

Stefan Larsson: We're in denim.

Stefan Larsson: and we elevated the brand in the market. including an opening of a flagship store on the iconic Champs-Élysées in Paris. These impactful moments resonated with consumers, driving strong engagement and growth in key product categories, such as underwear, denim, outerwear, and knit.

Stefan Larsson: And we elevated the brand in the marketplace, including an opening of our flagship store on the Iconix, Sean some the same Paris.

Stefan Larsson: This impactful moments resonated with consumers driving strong engagement and growth in key product categories, such as outerwear denim outerwear and knits.

Stefan Larsson: Turning to Tommy Hilfiger, Tommy had a very strong brand-building year and continued to tap into the cultural conversation by leaning into his classic American cool DNA, amplified by global talent including Stray Kids, Sofia Richie Grange, Damson Idris, Patrick Schwarzenegger, Louis Hamilton, and George Russell, to name a few. Tommy cut through major cultural moments, from the Met Gala to Formula One, driving new levels of consumer engagement with a continued focus on fames, fashion, art, music, entertainment, and sports. We started the year with a return to New York Fashion Week, built on that momentum with our Staten Island Ferry runway show in the fall.

Stefan Larsson: Turning to Tommy Hilfiger, Tommy had a very strong brand building year and continue to tap into the cultural conversation by leaning into its classic American cool DNA.

Stefan Larsson: Amplified by global talent, including stray Kids Sofia, Richie Grange, Danson address Patrick Schwarzenegger, Lewis Hamilton, and George Russell to name a few.

Stefan Larsson: Tommy cut through major cultural moments from the met gala to Formula one driving new levels of consumer engagement with a continued focus on famous fashion art music Entertainment and sports.

Stefan Larsson: We started the year with a return to New York fashion week built on that momentum with our Staten Island Ferry runway show in the fall and we ended the year with a capsule collection starring Global brand Ambassador <unk>, followed by the launch of our denim focused spring 'twenty five campaign went down some and soup.

Stefan Larsson: And we ended the year with a capsule collection starring global brand ambassador Jisoo, followed by the launch of our Denim Focus Spring 25 campaign with Damson and supermodel Abby Chan.

Speaker Change: <unk> model Abbvie champion.

Stefan Larsson: Turning to our regional performance, starting with North America, the team continued to lean into the next level execution of the PVH Plus. driving a double-digit EBIT margin each quarter, a significant step change in trajectory. Our Calvin and Tommy businesses together delivered EBIT dollars up 40% to an 11.9% EBIT margin for the year, up more than 350 basis points year-over-year on flat revenues, demonstrating the progress we are making in building the foundation for long-term brand accretive growth in the region. In the fourth quarter, Tommy and Calvin together achieved low single-digit revenue growth on a reported basis and mid-single-digit growth excluding the 53rd.

Speaker Change: Turning to our regional performance, starting with North America. The team continued to lean into the next level of execution of the PVH plus plan driving a double digit EBIT margin each quarter, a significant step change in trajectory, our Calvin and Tommy businesses together.

Speaker Change: Delivered EBIT dollars up 40% to an 11, 9% EBIT margin for the year up more than 350 basis points year over year on flat revenues demonstrating the progress we are making in building the foundation for long term brand accretive growth in the <unk>.

Speaker Change: Region.

Speaker Change: In the fourth quarter, Tommy and Calvin together achieved low single digit revenue growth on a reported basis and mid single digit growth. Excluding the 50, <unk> week and again delivered significant improvement in profitability to 12, 1%.

Stefan Larsson: and again delivered significant improvement in profitability to 12.1%. For both Calvin and Tommy, we drove double-digit growth in our full product collection in detail. We also had strong growth in e-commerce with higher traffic, higher average order value, and higher conversion supported by the investments we made to elevate the online shopping experience. And for both brands, we continue to partner closely with our key wholesale partners in developing joint growth targets based on elevated product assortments, better floor space, and improved in-stock rates to drive output.

Speaker Change: For both Calvin and Tommy we drove double digit growth in our full product collection in DTC.

We also had strong growth in e-commerce with higher traffic higher average order value and higher conversion supported by the investments we made to elevate the online shopping experience.

Speaker Change: And for both brands, we continue to partner closely with our key wholesale partners in developing joined growth targets based on elevated product assortments better floor space and improved in stock rates to drive outperformance.

Stefan Larsson: Turning to our international business. Europe was a strong proof point of our improved next level PVH Plus plan execution for both the fourth quarter and the full year. For 2024, in the face of a tougher macro, we made the proactive decision to drive higher quality of sales to build our brands for the long term and position us for sustainable brand accretive growth in the region.

Speaker Change: Turning to our international business Europe was a strong proof point of our improved next level PVH plus plan execution for both the fourth quarter and the full year for 2024 in the face of the tougher macro we made the proactive decision to drive higher <unk>.

Speaker Change: Quality of sales to build our brands for the long term and position us for sustainable brand accretive growth in the region.

Stefan Larsson: Now, one year later, I feel very good about how we delivered, having solidified the very strong brand position we have in Europe, built for high quality growth with our key partners. From our quality of sales actions, which had a planned 5% negative impact, 2024 sales in the region declined mid-single digits, which was better than what we had initially projected. and importantly, we delivered it with higher gross margin. In the fourth quarter, excluding the 53rd week comparison, overall revenue was flat in euros, which included a 3% impact from our quality of sales.

Speaker Change: Now one year later I feel very good about how we delivered having solidified the very strong brand position, we have in Europe builds for high quality growth with our key partners from our quality of sales actions, which had a planned 5% negative impact 2024 sales.

Speaker Change: In the region declined mid single digits, which was better than what we had initially projected and importantly, we delivered it we had higher gross margins.

Speaker Change: In the fourth quarter, excluding the 50 <unk> week comparison overall revenue was flat in euros, which included a 3% impact from our quality of sales actions.

Stefan Larsson: For the second consecutive quarter, we drove growth in our retail stores, reflecting our enhanced in-store experience. Building on the significant product improvements over the past year, we continue to drive higher sell-through trends from our successful fall season product, supported by stronger core product inventory. This combined with quality of sales directly translated into stronger business with our key partners, leading to the sequentially improved wholesale order.

Speaker Change: For the second consecutive quarter, we drove growth in our retail stores, reflecting our enhanced in store experience.

Speaker Change: Building on the significant product improvements over the past year, we continued to drive higher sell through trends from our successful full see some product supported by stronger core product inventory.

Speaker Change: This combined with quality of sales directly translated into stronger business with our key partners leading to the sequentially improved wholesale order books.

Stefan Larsson: Moving to Asia-Pacific. Our teams disciplined PVH plus plan execution across both Calvin and Tommy, growth for the quarter, and the full year in constant current. For the year, the region delivered low single-digit revenue growth in constant currency, including 3% growth in the fourth quarter, excluding the 53rd week last. Growth was led by China, which increased 3% in constant currency, excluding the 53rd week, benefiting from an earlier Lunar New Year from both a calendar and an overall shopping behavior. and we grew in Japan and Korea.

Speaker Change: Moving to Asia Pacific our teams disciplined PVH plus plan execution across both Calvin and Tommy drove growth for the quarter and the full year in constant currency for the year. The region delivered low single digit revenue growth in constant currency, including three <unk>.

Speaker Change: <unk> growth in the fourth quarter, excluding the 50 <unk> week last year growth was led by China, which increased 3% in constant currency, excluding the 50 <unk> week benefiting from an earlier lunar new year from both the calendar and an overall shopping behavior perspective, and we grew in.

Speaker Change: Japan and Korea.

Stefan Larsson: The region's ability to ignite and amplify global talent continue to be a key growth driver through powerful brand ambassadors, including Minyu for Calvin and Jisoo for Tommy. We captured key local consumer moments through activations that continuously fuel brand heat in the region.

Speaker Change: The region's ability to ignite and amplify global talent continue to be a key growth driver through powerful brand ambassadors, including menu for Calvin and G suite for Tommy we captured key local consumer moments through activation staff continuously fuels.

Speaker Change: Brand heat in the region.

Stefan Larsson: Now, let's switch gears and turn to our overall outlook for 2020. For all the progress of 2024, we're starting 2025 with some obvious headwinds. Our industry is facing uncertainty around the U.S. consumer demand. And with macro pressures in mind, we have already taken proactive cost and efficiency actions to reflect the current environment.

Speaker Change: Now, let's switch gears and turn to our overall outlook for 2025.

Speaker Change: For all the progress of 2024 were starting 2025 with some obvious headwinds our industry is facing uncertainty around the U S consumer demand and with macro pressures in mind, we have already taken proactive cost and efficiency actions to reflect the current environment.

Stefan Larsson: In addition, as you know, PVH has been added to MOFCOM's unreliable entity list, which is unprecedented for a global consumer company. We remain fully committed to serving our Chinese consumers as we have for the last 20 years and we are investing in our growth in China for the long term. We continue to engage with MOFCON and we work towards a positive resolution. Our team is, of course, fully focused on responding to the moment, while at the same time not losing sight of our longer-term commitment. We have two of the most globally iconic and beloved brands, and from the eye of the consumer, both have the right to play as part of the most desirable brands in the market.

Speaker Change: In addition, as you know PVH has been added to MOFCOM unreliable entity list, which is unprecedented for a global consumer company.

Speaker Change: We remain fully committed to serving our Chinese consumers as we have for the last 20 years and we are investing in our growth in China for the long term, we continue to engage with MOFCOM and we work towards a positive resolution.

Speaker Change: Our team is of course fully focused on responding to the moment, while at the same time, not losing sight of our longer term commitments.

Speaker Change: We have two of the most globally iconic and beloved brands and from the eye of the consumer both have the right to play as part of the most desirable brands in the market and through the PVH plus plan, that's where we're taking them.

Stefan Larsson: And through the PVH Plus plan, that's where we are taking. As we look at the 2025 outlook for Calvin Klein, we kicked off the year with a historic return to runway at New York Fashion Week, which dominated the conversation. Calvin Klein himself, for the first time in 20 years, sat front row alongside with his original muses, Kate Moss and Christy Turlington, who wore a custom Calvin Klein collection. and global talent who joined us were Shockable Fall and Spring Stars. We're excited for Creative Director Veronica Leone's Fall 25 collection to come to life this year in our flagship stores and our select premium wholesale partners such as Harvey Nichols, Mytheresa, Prontom, Browns, and MetaPorter.

Speaker Change: As we look at the 2025 outlook for Calvin Klein, we kicked off the year with a historic return to runway at New York fashion week, which dominated the conversation.

Speaker Change: <unk> signed himself for the first time in 20 years sat front row alongside with his original immune cells, Kate Moss and Christy Turlington, who wore capstone Calvin Klein collection, and global talent, who joined US War shopper, both fall and spring stars we're excited for creative.

Speaker Change: Directive <unk> fall 25 collection to come to life. This year in our flagship stores and a select premium wholesale partners such as Harvey Nichols My theories pronged Tong Browns and net a porter.

Stefan Larsson: We have leaned into Calvin's product strength as the number one men's premium underwear brand globally and took one of our biggest and best-selling product franchises, the Cotton Stretch underwear, and brought unprecedented innovation in it, building it into the new Icon Cotton Stretch with an industry-leading infinity waistband and improved fit and fit. We launched this product innovation in our biggest category globally, in D2C and in close collaboration with our key wholesalers. together with multi-platinum recording artist Bad Bunny, one of the most popular artists of our time. And in the first 48 hours, we reached over 29 million users on Calvin's Instagram page alone and added nearly 100,000 followers within the first week of launch, bringing our brand and our iconic underwear to the consumer with unprecedented excitement and newness, and we direct commercial impact.

Speaker Change: We have leaned into calvin's product strength as the number one men's premium underwear brand globally and took one of our biggest and best selling product franchises to coastal stretch underwear and brought unprecedented innovation and building it into the new icon koeltl stretch with an industry.

Speaker Change: Leading infinity waistband and improved fit and fabric. We launched this product innovation in our biggest category globally in D C and in close collaboration with our key wholesale partners together with multi platinum recording artist Bad bumpy one of the most popular artists.

Our time and in the first 48 hours, we reached over 29 million users on Calvin <unk> page alone and added nearly 100000 followers within the first week of launch, bringing our brand and our iconic underwear to the consumer with unprecedented excitement.

Speaker Change: <unk> and newness and we direct commercial employer.

Stefan Larsson: In 2025, you'll also see Calvin relaunch its women's sportswear business at U.S. Holds. following the take back of this license from Jesus. We kick this off tapping into the zeitgeist with a campaign featuring actress Lily Collins that will span the full marketing. We continue to make important progress to align Calvin Klein to one global brand vision to win in all markets. Spring 25 was the first season where we centralized Calvin's global product capabilities, bringing product creation across Europe, Asia, and North America to our team in New York. This was a significant undertaking, given the highly fragmented and decentralized legacy model we had before.

Speaker Change: In 2025, you'll also see Calvin relaunch its women's sportswear business at U S. Wholesale following the take back of this license from G. III. We kicked this off tapping into the site <unk> weighted campaign, featuring actress Lilly colleagues that will span the full marketing.

Speaker Change: Funnel.

We continued to make important progress to align Calvin Klein to one global brand vision to win in all markets shrink 25 was the FERC somewhere with centralized <unk> global product capabilities, bringing in product creation across Europe, Asia, and North America to our team in New York.

Speaker Change: This was a significant undertaking given the highly fragmented and decentralized legacy model we had before.

Stefan Larsson: As we brought this first season to life, the team had to work through a number of complexities, including centralizing disparate systems and processes that existed around the world. This initial transition took longer than we expected and led to extended product development timelines, constrained sourcing and shipping options, and pressure production costs for the season, which we decided not to pass on to partners or the culture. Soon as we experienced these challenges, we took action. And go forward, we now have a simplified and improved go-to-market process in place with a standard global buy approach, and we are upgrading our technology capabilities to support.

Speaker Change: We brought this first season to life the team had to work through a number of complexities, including centralizing disparate systems. Some processes that exist around the world. This initial transition took longer than we expected and led to extended product development timelines constrained.

Speaker Change: Sourcing and shipping options and fresh up production costs for the season, which we decided not to pass on to partners or the cold summer as soon as we experience. These challenges we took action and go forward. We now have a simplified and improved go to market process in place with a standard global.

Speaker Change: Buyer approach and we are upgrading our technology capabilities to support it.

Stefan Larsson: While the compounding effect of these factors created a temporary margin headwind that will be most pronounced in the first half of this year, importantly, we see the improvements already for the fall 25. And we'll be fully through this transition for the spring 26 product season that we are working on right now. Even though the work to set up Calvin's Engine for global product creation initially was tougher than expected, it was absolutely the right thing to do. And we can already see the strength and benefits coming out of it.

Speaker Change: While the compounding effect of these factors created a temporary margin headwind that will be most pronounced in the first half of this year importantly, we see the improvements already for the full 25 cities and will be fully through this transition for the spring 2006 product season that we all work.

Speaker Change: King on right now.

Speaker Change: Even though the work to set up Kelvin and Jim for global product creation. Initially was tougher than expected. It was absolutely the right thing to do and we can already see the strength and benefits coming out of it.

Stefan Larsson: And finally, we will continue to elevate the Calvin brand in the marketplace, and we are excited for this year's launch of our Soho flagship store here in New York. as well as other store enhancements and key openings as we expand our own and operative footprint of Calvin and Ralph. With Tommy in 2025, the brand continues to generate strong consumer relevance, launching its Spring 2025 campaigns featuring Sophia Ritchie Grange, global K-pop sensation Stray Kids, and brand ambassador Patrick Schwarzenegger, who wore Tommy to the highly anticipated global premiere of the White Lotus in Bangkok. Together with Sophia, we also launched Sophia for Tommy, a women's capsule collection that introduces a new elevated brand expression designed to create the halo for our women's mainline.

Speaker Change: And finally, we will continue to elevate the Calvin brand in the marketplace and we are excited for this years launch of our Soho flagship store here in New York as well as other store enhancements and key openings as we expand our owned and operated footprint of Calvin around the world.

Speaker Change: Tom in 2025, the brand continues to regenerate strong consumer relevance launching its spring 2025 campaigns, featuring Sofia Richie range Global K pop sensation stray kids and brand Ambassador Patrick Sports Nager, who wore told me to the <unk>.

Speaker Change: Hi, Les anticipated global premiere of the White Lotus in Bangkok.

Speaker Change: Together with Sofia, We also launched Sofia for Tommy Womens capsule collection that introduces a new elevated brand expression designed to create a halo for our womens mainline. This campaign drove strong engagement among our core demographic and new consumers through a full funnel.

Stefan Larsson: This campaign drove strong engagement among our core demographic and new consumers through a full funnel storytelling approach. It's also been very well received by our key partners globally. Tommy is also preparing a very special appearance at the Met Gala, and this summer will play an exciting role in the highly anticipated F1 movie, starring Tommy Hilfiger brand ambassador Damson Idris alongside Brad Pitt. The film, where Tommy is a key partner, brings the adrenaline-fueled world of Formula One to the big screen. Finally, to amplify our summer lifestyle shops in both DTC and with our wholesale partners. told me gather key talent from around the world at a Hilfiger resort themed event in the Caribbean.

Speaker Change: Storytelling approach. It's also been very well received by our key partners globally.

Speaker Change: <unk> is also preparing a very special appearance at the met Gala and this summer will play an exciting role into highly anticipated F. One movie starring Tommy Hilfiger brand Ambassador down suddenly address alongside Brad Pitt.

Speaker Change: Film, We're told me as a key partner brings to adrenalin fuelled world of Formula one to the big screen.

Finally to amplify our summer lifestyle shops in both D C and with our wholesale partners.

Speaker Change: <unk> gathered key talent from around the world are the hilfiger restore themed event in the Caribbean.

Stefan Larsson: This event will be captured as a campaign, launching in May across our talent's own channels, our brand channels, on tommy.com and with our partners. The organic social media impact from this event has already pre-launched, generated 160 million impressions with high engagement.

Speaker Change: This event will be captured as a campaign launching in may across our talents owned channels, our brand channels on <unk> dot com and with our partners the organic social media impact from this event tests already pre launch generated 160 million impressions with high engagement rates.

Speaker Change: Yeah.

Stefan Larsson: Turning to our region.

Speaker Change: Turning to our regions in Europe as I mentioned earlier following our successful quality of sales initiatives, we have driven two consecutive quarters of growth in our stores and I'm. So pleased to share that our full 25 order books have returned to growth our spring 'twenty five.

Stefan Larsson: In Europe, as I mentioned earlier, following our successful quality of sales initiative, we have driven two consecutive quarters of growth in our stores, and I'm so pleased to share that our Fall 2025 order books have returned to growth. Our Spring 2025 order book finalized down low single digits as we expected, an important sequential improvement from Fall 2024, and our Fall 2025 order book took another big step forward and is now up low single digits, with growth across both Tommie and Cali. This return to growth for Fall 25 is a testament to the strong execution from our global and regional teams to improve the overall assortment and drive higher quality of sales across the market.

Speaker Change: Order book finalized down low single digits as we expected an important sequential improvement from $4 24, and our full 25 order book took another big step forward and is now up low single digits with growth across both Tommy and Calvin.

Speaker Change: This return to growth for fall 'twenty five it's a 10.

Speaker Change: Testament to the strong execution from our global and regional teams to improve the overall assortment and drive higher quality sales across the marketplace.

Stefan Larsson: In 2025, we build on this momentum through continued execution of our PBH plus. In product, you will see us further strengthening key product categories, infusing more innovation and elevation of our hero products, and together with even stronger product segmentation between channels. Our strong seasonal campaigns would cut through the full marketing funnel, led by aspirational talent, amplified by mid-funnel product storytelling, and cut through all the way into our whole set doors and our elevated D2C execution in stores and online. In North America this year, we expect to continue to drive a double-digit EBIT margin through our PBH plus execution.

Speaker Change: In 2025, we build on this momentum through continued execution of our PVH plus plan.

Speaker Change: In product you will see us further strengthening key product categories infusing more innovation and elevation of our hero products and together with even stronger product segmentation between channels.

Speaker Change: Strong seasonal campaigns with <unk> through the full marketing funnel led by aspirational talent amplified by mid funnel product storytelling and cut through all the way into our wholesale doors and our elevated D to C execution in stores and online.

Speaker Change: In North America. This year, we expect to continue to drive a double digit EBIT margin through our PVH plus execution further unlocking our business across channels just like in Europe, Our key business drivers in the region, where it come from continued improvements in product marketing.

Stefan Larsson: further unlocking our business across China. Just like in Europe, our key business drivers in the region will come from continued improvements in product, marketing, and the marketplace execution. and Asia will continue to be a growth engine for us long term.

Speaker Change: And the marketplace execution.

Speaker Change: And Asia will continue to be a growth engine for us long term, we have a diversified business across the region, where we will continue to build strength this year.

Stefan Larsson: We have a diversified business across the region where we will continue to build strength this As we look at the year ahead, like others in our industry, we are navigating global macro volatility, particularly in North America. Following a strong holiday in January, in February, retail traffic trends took a step down, a dynamic affecting the entire sector, and despite this lower traffic, we're driving higher conversion, a reflection of our execution improvements in the region. Also, starting in February, we began to face incrementally tougher headwinds in China, including a post-New Year holiday slowdown that led to a step down in revenue.

Speaker Change: As we look at the year ahead like others in our industry. We are navigating global macro volatility, particularly in North America. Following a strong holiday in January and February retail traffic trends took a step down in <unk>.

Speaker Change: Now make affecting the entire sector and despite the slower traffic were driving higher conversion a reflection of our execution improvements in the region.

Speaker Change: Also starting in February we began to face incrementally tougher headwinds in China, including a pulse new year holiday slowdown that led to a step down in revenue.

Stefan Larsson: The trend has since stabilized at these new lower levels.

Speaker Change: Trend has same stabilized at these new lower levels importantly, we remain fully committed to serving our Chinese consumers and partners for the long term.

Stefan Larsson: Importantly, we remain fully committed to serving our Chinese consumers and partners for the long term.

Stefan Larsson: turning to our licensing business. Across both Calvin and Tommy, we have a large and diversified global licensing business, which is a key competitive advantage. Our licensing partners help bring our vision to life across multiple lifestyle categories. from watches and fragrances to eyewear and are important to how we drive sustainable, profitable.

Speaker Change: Turning to our licensing business across both Calvin and Tommy we have a large and diversified global licensing business, which is a key competitive advantage. Our licensing partners helped bring our vision to life across multiple lifestyle categories from watches.

Speaker Change: Fragrances to eyewear and are important to how we drive sustainable profitable growth.

Stefan Larsson: Before I give you an update on the multi-year transition away from G3, I would like to share some important context on our licensing business over. 80% of PBH licensing revenues this year are from strong, long-term brand-building partnerships, where we have full alignment on where we are taking the brands, and where our partners bring unique expertise.

Speaker Change: Before I give you an update on the multiyear transition away from <unk> I would like to share some important context on our licensing business overall.

Speaker Change: 80% of PVH licensing revenues. This year are from strong long term brand building partnerships. When we have full alignment on where we are taking the brands and where our partners bring unique expertise.

Stefan Larsson: A concrete example of this includes how we work with CODI, where CODI CEO Sue Nabi and I have engaged both our teams on something big that's in the works for Calvin Klein Fragrance in 2020. There are many more examples like this. And these go-forward licensing partnerships will drive high-quality growth for 2025 and for many years.

Speaker Change: A concrete example of this includes how we work with Coty, where it <unk> CEO of <unk> and I have engaged both our teams on something big that's in the works for Calvin Klein fragrance in 2026.

There are many more examples like this and this go forward licensing partnerships will drive high quality growth for 2025 and for many years to come.

Stefan Larsson: When it comes to the G3 transition, the overall contribution to our total global licensing business is relatively small, at only 20% of our expected licensing revenues for 2020. This is following the take back of the North America women's sportswear categories for the Wholesale Channel, which represented approximately 20% of the G3 business previously. While still early, our new product is driving significant increase in AURs, with consumers describing it as fresh, modern, and elegant. And we are looking forward to building long-term sustainable growth of our women's business in North America wholesale, just as we already do in the rest of the world.

Speaker Change: When it comes to the G. III transition the overall contribution to our total global licensing business is relatively small at only 20% of our expected licensing revenues for 2025.

Speaker Change: This is following the take back of the North America Women's sportswear categories for the wholesale channel, which represented approximately 20% of the G. III business previously.

Speaker Change: It's still early our new product is driving significant increase in AUR is will consumers describing it as fresh modern and elevated and we're looking forward to building long term sustainable growth of our womens business in North America wholesale just us we already do in the rest of the.

Speaker Change: World.

Stefan Larsson: shifting to our guidance. Building on the momentum of 2024 and the benefits arising from our ongoing discipline execution of our PBH Plus plan, we are positive on our prospects for 2020. while recognizing the challenges of the moment. We expect revenue to be flat to up slightly on both the reported and constant currency basis. we expect EBIT margins to also be flat to up slightly, with a stronger second half of the year, having the benefit of both the strength in the European order books, as well as more of our structural cost efficiencies having fully. We will also make meaningful increases in our capital return to shareholders.

Speaker Change: Shifting to our guidance.

Speaker Change: Building on the momentum of 2024, and the benefits arising from our ongoing disciplined execution of our PVH plus plan were positive on our prospects for 2025, while recognizing the challenges of the moment.

Speaker Change: We expect revenue to be flat to up slightly on both a reported and constant currency basis.

Speaker Change: We expect EBIT margins to also be flat to up slightly with a stronger second half for the year, having the benefit of both the strength in the European order books as well as more of a structural cost efficiencies having full impact.

Speaker Change: We will also make meaningful increases in our capital return to shareholders with accelerated stock buybacks in 2025.

Stefan Larsson: with Accelerated Stock Buybacks in 2020. These actions will help us take advantage of the current valuations while accelerating our EPS growth, even in a weaker macro balance. And in 2025, we will be well-positioned to deliver another year of record non-GAAP EPS.

Speaker Change: These actions will help us take advantage of the current valuations, while accelerating our EPS growth even in a weaker macro backdrop.

Speaker Change: And in 2025, we will be well positioned to deliver another year of record non-GAAP EPS.

Stefan Larsson: In conclusion, our vision and our long-term commitment are to build Calvin Klein and Tommy Hilfiger into the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our This is the heart of the PVH Plus. 2024 was a year of significant progress in both brands across all regions. In 2025, it's all about executing at pace, building on this momentum, and I'm so proud of our teams and partners, and we are full steam ahead.

Speaker Change: In conclusion, our vision and our long term commitment or to build Calvin Klein and Tommy Hilfiger to the most desirable lifestyle brands in the world and make PVH one of the highest performing brand groups in our sector. This is the heart of the PVH plus plan 2024.

Speaker Change: It was a year of significant progress in both brands across all regions. In 2025 is all about executing at pace.

Speaker Change: Building on this momentum and I'm, so proud of our teams and partners and we are full steam ahead and with that I'll turn the call over to <unk>.

Zach Coughlin: And with that, I'll turn the call over. Thanks Stefan and good morning. My comments are based on non-GAAP results and are reconciled in our press release. As Stefan discussed, we are pleased with our fourth quarter and four-year financial results, driven by the strength of our two iconic global brands and disciplined execution of the PBH Plus program. For the fourth quarter, revenue and EPS came in slightly ahead of guidance, with operating margin in line with expectations. Importantly, for the full year 2024, we deliver on the commitments we made at the start of the year for both revenue and profit.

Speaker Change: Thanks, Stefan and good morning, My comments are based on non-GAAP results and are reconciled in our press release.

Speaker Change: As Stefan discussed we are pleased with our fourth quarter and full year financial results driven by the strength of our two iconic global brands and disciplined execution of the PVH cost plan for.

Speaker Change: For the fourth quarter revenue and EPS came in slightly ahead of guidance with operating margin in line with expectations importantly for the full year 2024, we deliver on the commitments. We made at the start of the year for both revenue and profit we.

Zach Coughlin: We achieved a record high 59.4% gross margin this year and delivered record high non-GAAP earnings per share of $11.74, up 10% versus 2023, and exceeding our initial start of year guidance range of $10.75 to $11. And we delivered this in spite of an increasingly challenging consumer backdrop in China and North America that began around mid-year. In North America, for Calvin Klein and Tommy Hilfiger combined, we delivered an increase in EBIT of over 40% and drove over 350 basis points of operating margin expansion. In Europe, we ended the year with two consecutive quarters of DTC store revenue growth and confirmed positive Fall 2025 order books.

Speaker Change: We achieved a record high of 59, 4% gross margin this year and delivered record high non-GAAP earnings per share of $11 74.

Speaker Change: Up 10% versus 2023 and exceeding our initial start of your guidance range of $10 75 to $11 and we delivered this in spite of an increasingly challenging consumer backdrop in China, and North America that began around mid year.

Speaker Change: In North America for Calvin Klein, and Tommy Hilfiger, combined we delivered an increase in EBIT of over 40% and drove over 350 basis points of operating margin expansion in Europe. We ended the year with two consecutive quarters of DTC store revenue growth and confirmed positive fall 25 order books.

Zach Coughlin: In Asia Pacific, we deliver yet another year of revenue growth and constant currency in our most profitable region, on top of two consecutive years of double-digit constant currency growth. And across the world, we made significant progress in the next phase of Growth Driver 5 of the PBH Plus Plan to simplify our operating model and drive SG&A efficiency. Additionally, we delivered strong cash flow again this year, with free cash flow of nearly $600 million, enabling us to return $500 million to shareholders during the year, through the repurchase of 4.7 million shares of Common Sense.

Speaker Change: In Asia Pacific, we delivered yet another year of revenue growth in constant currency and our most profitable region on top of two consecutive years of double digit constant currency growth.

Speaker Change: And across the World, we made significant progress in the next phase of growth driver five of the PVH plus plan to simplify our operating model and drive SG&A efficiencies.

Speaker Change: Additionally, we delivered strong cash flow again, this year with free cash flow of nearly $600 million, enabling us to return $500 million to shareholders. During the year through the repurchase of $4 7 million shares of common stock.

Zach Coughlin: I will now discuss our 2024 results in more detail and then move on to our outlook for 2024. Revenue for the fourth quarter was down 2% on a constant currency basis, including a 3% decline due to the 53rd week in 2023, and a 1% decline due to the sale of the Heritage Intimates business. Excluding these impacts, revenue on a constant currency basis was up 2%, with growth in both DTC and wholesale, an important milestone in our plan to return to growth during 2025. On a reported basis, revenue through the quarter was down 5%. From a regional perspective, fourth quarter revenue for our international businesses was down 3% on a constant currency basis, including a 3% decline from the 53rd week in 2023.

Speaker Change: I will now discuss our 2024 results in more detail and then move onto our outlook for 2025.

Speaker Change: Revenue for the fourth quarter was down 2% on a constant currency basis, including a 3% decline due to the 50 <unk> week in 2023, and a 1% decline due to the sale of the heritage Intimates business. Excluding these impacts revenue on constant currency basis was up 2% with growth in both DTC.

Speaker Change: In wholesale and important milestone in our plan to return to growth during 2025.

Speaker Change: On a reported basis revenue through the quarter was down 5%.

Speaker Change: From a regional perspective.

Speaker Change: Fourth quarter revenue for our international businesses was down 3% on a constant currency basis, including a 3% decline from the 50 <unk> week in 2023.

Zach Coughlin: Excluding the impact of the 53rd week, our Asia Pacific business was up 3% on a constant currency basis, benefiting from the earlier Lunar New Year, as well as growth in Japan and Korea. Sales for our Asia-Pacific business were down 4% on a reported basis and down 1% in constant currency. In our European business, sales in Euros were flat compared to last year, excluding the impact of the 53rd week. Low single-digit growth in our retail stores offset a planned decrease in wholesale sales. Sales for our European business were down 7% on a reported basis and down 4% in Europe.

Speaker Change: Excluding the impact of the 50 <unk> week, our Asia Pacific business was up 3% on a constant currency basis benefiting from the earlier lunar new year as well as growth in Japan and Korea.

Speaker Change: Sales for Asia Pacific business were down 4% on a reported basis and down 1% in constant currency.

Speaker Change: In our European business sales in euros were flat compared to last year, excluding the impact of the 50 <unk> week.

Speaker Change: Low single digit growth in our retail stores offset a planned decrease in wholesale.

Speaker Change: Sales for our European business were down 7% on a reported basis and down 4% in euros.

Zach Coughlin: In North America, excluding the impact of the 53rd week, revenue for our Tommy Hilfiger and Calvin Klein businesses combined increased 4% versus last year, reflecting the wholesale timing shift from the third quarter into the fourth quarter that I discussed last quarter. DTC was flat compared to last year, excluding the 53rd week. On a reported basis, revenue was up 1%. From an overall PVH channel perspective, I'll first talk about our DTC revenue excluding the 4% negative impact from the 53rd week in 2023. Overall, direct-to-consumer revenue was up 2% on a constant currency basis and better than we communicated at the start of the quarter, primarily driven by the strong holiday season.

In North America, excluding the impact of the 50 <unk> week revenue for Tommy Hilfiger, and Calvin Klein businesses combined increased 4% versus last year, reflecting the wholesale timing shift from the third quarter into the fourth quarter that I discussed last quarter.

DTC was flat compared to last year, excluding the 50 <unk> week on a reported basis revenue was up 1%.

Speaker Change: From an overall PVH channel perspective, I'll first talk about our DTC revenue, excluding the 4% negative impact from the 50 <unk> week in 2023.

Speaker Change: Overall direct to consumer revenue was up 2% on a constant currency basis and better than we communicated at the start of the quarter, primarily driven by the strong holiday season sales.

Zach Coughlin: Sales in our retail stores were up 3% on a constant currency basis. And in our owned and operated e-commerce business, sales were down 4% on a constant currency basis as strong growth in North America was more than offset by our planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region. Including the impact of the 53rd week, DTC sales overall were down 5% on a reported basis and down 2% in constant current. Within wholesale, we remain focused on strong quality of sales and winning with our key wholesale partners. Total wholesale revenue was down 2% on a constant currency basis, including a 2% decline from the sale of the Heritage Intimates bill.

Speaker Change: Sales in our retail stores were up 3% on a constant currency basis, and then our owned and operated E. Commerce business sales were down 4% on a constant currency basis as strong growth in North America was more than offset by our planned strategic reduction in sales in Europe to drive overall higher quality of sales in the region.

Speaker Change: Including the impact of the 50 <unk> week DTC sales overall were down 5% on a reported basis and down 2% in constant currency.

Speaker Change: Within wholesale we remain focused on strong quality of sales and winning with our key wholesale partners total wholesale revenue was down 2% on a constant currency basis, including a 2% decline from the sale of the heritage Intimates business.

Zach Coughlin: The benefit from the shift in timing of wholesale shipments in North America was largely offset by the planned reduction in Europe. On a reported basis, wholesale revenue was down 5% versus last year. Turning to our global brands, Calvin Klein revenues were up 1% on a constant currency basis and down 2% on a reported basis, including a benefit from the shift in timing of North America wholesale shipments. Tommy Hilfiger revenues were down 3% on a constant currency basis, and down 5% on a reported basis, with Tommy more impacted by our quality of sales initiative in Europe in 2024.

Speaker Change: The benefit from the shift in timing of wholesale shipments in North America was largely offset by the planned reduction in Europe.

Speaker Change: On a reported basis wholesale revenue was down 5% versus last year.

Speaker Change: Turning to our global brands Calvin Klein revenues were up 1% on a constant currency basis and down 2% on a reported basis, including a benefit from the shift in timing of North America wholesale shipments.

Speaker Change: Tommy Hilfiger revenues were down 3% on a constant currency basis and down 5% on a reported basis with Tommy more impacted by our quality of sales initiative in Europe in 2024.

Zach Coughlin: In the fourth quarter, we delivered a gross margin of 58.2%, down 210 basis points compared to a record high in 4Q last year. The decrease was driven by three main factors. a moderately more promotional environment than last year, particularly in North America, an increase in freight costs, primarily due to Red Sea disruptions and increased premium freights, and the mix of wholesale shipments in North America, which negatively impacted our gross margin of the quarter but did not impact our overall profitability. Inventory at quarter end was up 6% compared to 2023 due to an investment in best-selling core product categories and overly lean inventory levels last year.

Speaker Change: In the fourth quarter, we delivered gross margin of 58, 2% down 210 basis points compared to a record high in <unk> last year the.

Speaker Change: The decrease was driven by three main factors a moderately more promotional environment than last year, particularly in North America.

Speaker Change: An increase in freight cost primarily due to red sea disruptions and increased premium freights and the mix of wholesale shipments in North America, which negatively impacted our gross margin in the quarter, but did not impact our overall profitability.

Speaker Change: Inventory at quarter end was up 6% compared to 2023 due to an investment in best selling core product categories and overly lean inventory levels last year.

Zach Coughlin: As discussed last quarter, we chose to strategically increase inventory in our most essential products to support our goal of having these timeless items in stock at a target of 95% of the time. Importantly, the vast majority of inventory is current season in SG&A expends as a percent of revenue was 47.9%, a 30 basis point improvement versus last year. Our Growth Driver 5 cost savings actions and other expense efficiencies drove a nearly 100 basis point improvement, which more than offset the impact from the B leverage of expenses due to the 53rd week in 2023. Even for the quarter, it was $244 million, and operating margin was 10.3%.

Speaker Change: As discussed last quarter, we chose to strategically increase inventory and are most of central products to support our goal of having these timeless items in stock at a target of 95% of the time.

Speaker Change: Importantly, the vast majority of inventory as currencies and in core.

Speaker Change: SG&A expense as a percent of revenue was 47, 9%, a 30 basis point improvement versus last year.

Speaker Change: Our growth driver find cost savings actions and other expense efficiencies drove a nearly 100 basis point improvement, which more than offset the impact from the deleverage of expenses due to the 50 <unk> week in 2023.

Speaker Change: EBIT for the quarter was $244 million and operating margin was 10, 3%.

Zach Coughlin: Earnings per share was $3.27, and our tax rate for the quarter was 21.4%. For the full year, revenue is down 6% on a reported and down 5% in constant currency, including a 2% decline due to the sale of the Heritage Intimates business and a 1% decline due to the 53rd week in 2023. Even margin was 10% and in line with last year, with record high gross margin offsetting the impact from the deleveraging of expenses on lower sales. And we delivered record high non-gap earnings per share of $11.74.

Speaker Change: Earnings per share was $3 27.

Speaker Change: And our tax rate for the quarter was 21, 4%.

Speaker Change: For the full year revenue was down 6% on a reported and down 5% in constant currency, including a 2% decline due to the sale of the heritage intimates business and a 1% decline due to the 50 <unk> week in 2023.

Speaker Change: EBIT margin was 10% and in line with last year with record high gross margin offsetting the impact from the deleveraging of expenses on lower sales and we delivered record high non-GAAP earnings per share of $11 74.

Zach Coughlin: And now, moving on to our out... In 2025, we will build on the progress we made in 2024 with a continued focus on driving double-digit operating margins in North America, returning to growth and growing profitability in Europe, and building on the strong growth over the last three years in Asia Pacific. At the same time, we remain cautious as we face new external headwinds that have emerged beginning of early February. First, softness in the consumer backdrop in North America, where following a strong holiday season, retail traffic across the industry took a significant step backwards. And second, a noticeable decline in revenue in China.

Speaker Change: Now moving onto our outlook in.

Speaker Change: In 2025, we will build on the progress we made in 2024 with a continued focus on driving double digit operating margins in North America.

Speaker Change: Turning to growth and growing profitability in Europe and building on the strong growth over the last three years in Asia Pacific.

Speaker Change: At the same time, we remain cautious as we think new external headwinds that have emerged beginning in early February.

Speaker Change: Softness in the consumer backdrop in North America, we're following a strong holiday season retail traffic across the industry took a significant step backwards.

Second a noticeable decline in revenue in China.

Zach Coughlin: Both of these factors partially stabilized in March, but at levels below 2024, a trend we are forecasting will continue through the rest of 2025. Additionally, as Stefan discussed, Calvin Klein product delays are expected to result in temporary margin headwinds, particularly in the first half of the year. As we lean into those specific headwinds, we remain laser-focused on driving discipline execution of the PBH Plus Plan. We expect to build on our financial performance as the year progresses, driving sequential improvements in our European order books and increasing SG&A efficiencies quarter-by-quarter through our Growth Driver 5 actions, while improving margins in our Calvin Klein business as we work through that transition.

Speaker Change: Both of these factors partially stabilized in March but at levels below 2020 for a trend. We are forecasting will continue through the rest of 2025. Additionally.

Speaker Change: Additionally, and Stefan discussed Calvin Klein product delays are expected to result in temporary margin headwinds, particularly in the first half of the year.

As we lean into those specific headwinds we remain laser focused on driving disciplined execution of the PVH plus plan we.

Speaker Change: We expect to build on our financial performance as the year progresses, driving sequential improvements in our European order books, and increasing SG&A efficiencies quarter by quarter through our growth driver five actions, while improving margins in our Calvin Klein business as we work through that transition.

Zach Coughlin: In the first quarter, we are projecting revenue to be flat to down 2% on a reported basis and flat to down 1% on a constant currency basis compared to 2024. In Europe, our investment in quality of sales last year continues to pay off, as we expect revenue to be higher than last year by mid-single digits in euros, with growth in DTC and wholesale. In North America, we are planning revenue to be approximately flat to last year, with growth in wholesale offset by lower DTC sales. And in Asia Pacific, we expect revenue to be lower by low double digits due to a combination of an early Lunar New Year this year and headwinds in China.

Speaker Change: In the first quarter, we are projecting revenue to be flat to down 2% on a reported basis and flat to down 1% on a constant currency basis compared to 2024.

Speaker Change: In Europe, our investment in quality of sales last year continues to pay off as we expect revenue to be higher than last year by mid single digits in euros with growth in DTC and wholesale.

Speaker Change: In North America, we are planning revenues to be approximately flat to last year with growth in wholesale offset by lower DTC sales and in Asia Pacific, We expect revenue to be lower by low double digits due to a combination of an early lunar new year, this year and headwinds in China.

Zach Coughlin: We are projecting first quarter gross margin to decline approximately 250 basis points, driven by an increase in freight costs and incremental discounts due to the Calvin Klein product delays, and the gross margin differential as we transition the first significant categories in North America wholesale from a licensed to an in-house wholesale business model. Additionally, our mix of wholesale revenue is higher in the first quarter than last year, which has a negative impact on gross margin, but not on our overall profitability. We expect gross margin compared to last year to improve sequentially each quarter as we are making steady progress to stabilize Calvin Klein product delays, and we expect our channel mix to normalize throughout the year.

Speaker Change: We are projecting first quarter gross margin to decline approximately 250 basis points driven by an increase in freight costs and incremental discounts due to the Calvin Klein product delays and the gross margin differential as we transition the first significant categories in North America wholesale from a licensed to an in house <unk>.

Speaker Change: Rail business model. Additionally.

Speaker Change: Additionally, our mix of wholesale revenue was higher in the first quarter than last year, which has a negative impact on gross margin, but not on our overall profitability.

Speaker Change: We expect gross margin compared to last year to improve sequentially each quarter as we were making steady progress to stabilize Calvin Klein product delays, we expect our channel mix to normalize throughout the year.

Zach Coughlin: We are actively working to mitigate these impacts through disciplined cost management and expect SG&A expenses as a percentage of revenue in the first quarter to decrease approximately 100 basis points. In total, we are projecting our first quarter operating margin to be approximately 8 to 8.5%, down 150 to 200 basis points compared to last year. First quarter earnings per share is projected to be $2.10 to $2.25, compared to $2.45 in the prior year. Our tax rate for the first quarter is estimated at approximately 18%, and interest expense is projected to be approximately $20 million.

Speaker Change: We are actively working to mitigate these impacts through disciplined cost management and expect SG&A expenses as a percentage of revenue in the first quarter to decrease approximately 100 basis points.

Speaker Change: In total we are projecting our first quarter operating margin to be approximately eight to eight 5% down 150 to 200 basis points compared to last year.

Speaker Change: First quarter earnings per share is projected to be $2 10 to $2 25.

Speaker Change: Compared to $2 45 in the prior year.

Speaker Change: Our tax rate for the first quarter is estimated at approximately 18% and interest expense is projected to be approximately $20 million.

Zach Coughlin: And now moving to the full year. Overall, revenue is projected to be flat to up slightly on both the reported and constant currency basis compared to 2024. We expect our full-year operating margin will be flapped up slightly compared to 10% in 2024 and are projecting another record high non-GAAP earnings per share in the range of $12.40 to $12.75, up 9% at the top end. Our improved EPS outlook reflects a significant benefit from our share repurchases in 2024 and $500 million in planned share repurchases in 2025. We are excited to announce we will deliver these repurchases by entering in an accelerated share repurchase program in April.

Speaker Change: And now moving to the full year overall revenue is projected to be flat to up slightly on both a reported and constant currency basis compared to 2024.

Speaker Change: We expect our full year operating margin will be flat to up slightly compared to 10% in 2024 and are projecting another record high non-GAAP earnings per share in the range of $12 40 to $12 75 up 9% at the top end.

Speaker Change: Our improved EPS outlook reflects a significant benefit from our share repurchases in 2024 and $500 million in planned share repurchases in 2025.

Speaker Change: We are excited to announce we will deliver these repurchases by entering into an accelerated share repurchase program in April.

Zach Coughlin: From a regional perspective, Europe is planned to return to growth with revenue of low single digits in euros and across both DTC and wholesale, with sequential improvement order books, including confirmed growth in fall 2025. In the Americas, we are planning revenue up mid-single digits versus 2024 with low teens growth in wholesale, powered by the first significant women's wholesale transition to in-house. partially offset by a low single-digit decline in DTC due to the softness in the consumer backdrop we discussed earlier. In Asia-Pacific, due to the headwinds in China that I mentioned earlier, we are cautiously planning Asia-Pacific revenue down mid-single digits in constant current.

Speaker Change: From a regional perspective.

Speaker Change: Europe is planned to return to growth with revenue up low single digits in euros and across both DTC and wholesale with sequential improvement in order books, including confirmed growth in fall 2025.

Speaker Change: In the Americas, we are planning revenue up mid single digits versus 2024 with low teens growth in wholesale powered by the first significant women's wholesale transition to in house, partially offset by a low single digit decline in DTC due to the softness in the consumer backdrop, we discussed earlier.

Speaker Change: In Asia Pacific due to the headwinds in China that I mentioned earlier, we are cautiously planning Asia Pacific revenue down mid single digits in constant currency.

Zach Coughlin: China has planned down low double digits, but we are still planning low single-digit growth in the rest of the region. And in our important licensing business, as Stefan mentioned earlier, we expect to deliver high quality growth in the 80% of our business outside of our relationship with G3. Gross margin for the year is expected to be down approximately 100 basis points compared to 2024, of which approximately half is due to the impact of the G3 transition in North America from license to wholesale, and the rest largely explained by the temporary impacts from centralizing the Calvin Klein global product .

Speaker Change: China is planned down low double digits, but we are still planning low single digit growth in the rest of the region.

And in our important licensing business as Stefan mentioned earlier, we expect to deliver high quality growth in the 80% of our business outside of our relationship with G. III.

Speaker Change: Gross margin for the year is expected to be down approximately 100 basis points compared to 2024 of which approximately half is due to the impact of the G. III transition in North America from license to wholesale and the rest largely explained by the temporary impacts from centralizing the Calvin Klein global product kitchens.

Zach Coughlin: We expect that Calvin Klein product delays to primarily impact first half gross margins leading to lower gross margins in the first half and improving gross margins in the second half. We expect SG&A expense to be lower in 2025 compared to 2024, resulting in a decrease of approximately 100 basis points as a percentage of revenue. Last year, we announced that we are embarking on the next phase of the Growth Driver 5 of the PBH Plus Plan to drive efficiencies and improve our ways of working. We have laid the groundwork for these initiatives, and we expect to drive significant cost savings in 2025, on top of the reductions we already realized in 2024, with savings showing up more powerfully as we progress through the year.

Speaker Change: We expect that Calvin Klein product delays to primarily impact first half gross margins, leading to lower gross margins in the first half and improving gross margins in the second half.

Speaker Change: We expect SG&A expense to be lower in 2025 compared to 2024, resulting in a decrease of approximately 100 basis points as a percentage of revenue.

Speaker Change: Last year, we announced that we are embarking on the next phase of growth driver five of the PVH plus plan to drive efficiencies and improve our ways of working.

Speaker Change: We have laid the groundwork for these initiatives and we expect to drive significant cost savings in 2025 on top of the reductions we already realized in 2024 with savings showing up more powerfully as we progressed through the year.

Zach Coughlin: to highlight a couple of these actions. In North America, we continue to make good progress streamlining our logistics operations to drive efficiencies and cost savings, including consolidating into two warehouses and in-housing our e-commerce distribution. This work will increase our U.S. warehouse capacity utilization from a little above 50 percent to approximately 85 to 90 percent and significantly decrease North America distribution expenses. And in IT, in the last 60 days, we have signed contracts with some of the world's largest and most innovative technology companies that will enable consolidation of our historically decentralized and fragmented technology stack into a single platform of global systems and deliver tens of millions of dollars of annual savings once implemented.

Speaker Change: To highlight a couple of these actions.

Speaker Change: In North America, we continue to make good progress streamlining our logistics operations to drive efficiencies and cost savings, including consolidating into two warehouses and in housing our ecommerce distribution.

Speaker Change: This work will increase our U S warehouse capacity utilization from a little above 50% to approximately 85% to 90% and significantly decreased North America distribution expenses.

Speaker Change: And then.

Speaker Change: In the last 60 days, we have signed contracts with some of the world's largest and most innovative technology companies that will enable consolidation of our historically decentralized and fragmented technology stack into a single platform, our global systems and deliver tens of millions of dollars of annual savings once implemented.

Zach Coughlin: These are important examples of the actions in Growth Driver 5 of the PBH Plus program. As we shared previously, we expect the total of our growth driver five actions to deliver two to three hundred basis points of operating margin expansion over time. As a result of this work, we expect our four-year operating margin will be flat to up slightly compared to 10% in 2024. While operating margins will be lower than last year early in the year, we'll see sequential improvements each quarter throughout 2025 based on the actions that are well underway. and we expect to exit 2025 and enter 2026 with significantly higher operating margins than 2024.

Speaker Change: These are important examples of the actions and growth driver five of the PVH plus plan as we've shared previously we expect the total of our growth driver five actions to deliver two to 300 basis points of operating margin expansion over time.

Speaker Change: As a result of this work we expect our full year operating margin will be flat to up slightly compared to 10% in 2024.

Speaker Change: While operating margins will be lower than last year early in the year, we will see sequential improvements each quarter throughout 2025 based on the actions that are well underway and.

Speaker Change: And we expect to exit 2025, and enter 2026 with significantly higher operating margins in 2024.

Zach Coughlin: Interest expense is projected to increase to approximately $85 million compared to $67 million in 2024 to fund the Accelerated Share Repurchase Agreement. And our tax rate for 2025 is estimated at approximately 22% in line with our long-term commitment of low 20s percent.

Speaker Change: Interest expense is projected to increase to approximately $85 million compared to $67 million in 2024 to fund the accelerated share repurchase agreements.

Speaker Change: And our tax rate for 2025 is estimated at approximately 22% in line with our long term commitment of low 20%.

Zach Coughlin: We have one other important change to announce. With the appointment of Frederick Olson as CEO AMEA and the promotion of Donald Kohler to CEO for all of the Americas, we now have our leadership team and operating model firmly in place to drive the PVH Plus plan forward.

Speaker Change: We have one other important change to announce with the appointment of Frederick Wilson as CEO of EMEA and the promotion of Donald color to CEO for all of the Americas. We now have our leadership team and operating model firmly in place to drive the PVH plus plan forward.

Zach Coughlin: As a result of that, beginning in 2025, we will be evolving our reported segments to be 1. Americas, 2. Europe, the Middle East, and Africa, 3. Asia Pacific, and 4. A new standalone licensing segment. Additionally, we'll be providing revenue data for each of the Calvin Klein and Tommy Hilfiger brands. Beyond aligning to our internal operating model, we also believe this will provide increased transparency to the dimensions of the business most relevant to understanding our financial performance.

Speaker Change: As a result of that beginning in 2025, we will be evolving our reported segments to be one Americas too.

Speaker Change: Europe, the Middle East and Africa, three Asia Pacific and for a new Standalone licensing segments.

Speaker Change: Additionally, we will be providing revenue data for each of the Calvin Klein and Tommy Hilfiger brands.

Speaker Change: Beyond aligning to our internal operating model. We also believe this will provide increased transparency to the dimensions of the business most relevant to understanding our financial performance.

Zach Coughlin: We plan to share recast quarterly and annual segment data for 2023 and 2024 on a Form 8K with our first quarter earnings release. Before we open up for questions, I want to echo Stefan's sentiments earlier, thanking our associates all around the world for leaning into the PBH Plus plan and delivering our annual financial commitments in 2024 in spite of a choppy environment. Looking forward, we continue to work relentlessly to drive results in all aspects of our global business. While we remain agile to new developments, we have a clear plan in place to deliver continuous, sequential improvement throughout the year.

Speaker Change: We plan to share recast quarterly and annual segment data for 2023, and 2024 on a form 8-K with our first quarter earnings release.

Speaker Change: Before we open up for questions I want to Echo Stephane sentiments earlier thinking our associates all around the world for leaning into the PVH plus plan and delivering our annual financial commitments in 2024 in spite of a choppy environment.

Speaker Change: Looking forward, we continue to work relentlessly to drive results in all aspects of our global business, while we remain agile to new developments with a clear plan in place to deliver continuous sequential improvement throughout the year.

Zach Coughlin: Our goals are set, the team is focused, and through the PBH Plus plan, we are making progress to deliver on all of our commitments to our customers, associates, and sharecroppers.

Speaker Change: Our goals are set the team is focused and to the PVH plus plan, we're making progress to deliver on all of our commitments to our customers associates and shareholders.

Operator: And with that, operator, we would like to open it up to questions. Thank you very much, sir.

Speaker Change: And with that operator, we would like to open it up to questions.

Operator: At this time, if you'd like to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2.

Speaker Change: Thank you very much Sir at this time I would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Remove yourself from the queue at any time by pressing star to you. We will take our first question from Jay sole with UBS. Please go ahead.

Jay Sole: We'll take our first question from Jay Sole with UBS. Please go ahead. Great, thank you so much. My question is about Europe. Stefan, can you talk about what you've learned from the Quality of Sales Initiative? And how does the PVH Plus plan elevate a level of execution that you've shown? You know, how is that really impacting the business? Can you give us a little bit more color on that, too? Thank Absolutely. Good morning, Jay. And thank you for your question.

Speaker Change: Great. Thank you. So much my question is about Europe.

Speaker Change: So thank you talk about what you've learned from the quality of sales initiatives and how does the PVH plus planned elevated level of execution that you've shown how is that really impacting the business can you give us a little bit more color on that too. Thank you.

Jay Sole: Absolutely good morning, Jay and thank you for your question.

Stefan Larsson: Europe is such a great story of progress and how we connect PVH plus to high quality growth, to drive sustainable high quality growth. So if we go back to how we started at 24, we saw a tougher consumer backdrop in Europe. And we took three very focused quality of sales actions. We stopped third party sales of our brands on digital platforms. We reduced the number of digital platforms we sold to. We improved inventory in relation to sales overall. So those were the three. And then in parallel, we leaned into the PVH Plus execution in strengthening product relevance, the consumer engagement, our marketing, the marketplace execution across both Tommi and Calvin.

Speaker Change: Europe is such a great.

Speaker Change: Story of our progress and how we connect PVH plus two high quality growth to drive sustainable high quality growth. So if we go back to how we started 2004, we saw a tougher consumer backdrop in Europe.

Speaker Change: And we took.

Speaker Change: Took three very focused quality of sales actions, we've stopped third party sales of our brands on digital platforms. We've reduced the number of digital platforms, we sold too.

Speaker Change: We improved inventory in relation to sales overall, so those were the three actions we took and then in parallel we leaned into the PVH plus execution is strengthening product relevance.

Speaker Change: Consumer engagement marketing the marketplace execution across both Tommy and Calvin you can really see the effect of the three quality of sales actions with the improvements of the PVH plus execution next level in Tommy and Calvin you can see that indeed to see Q3 and Q4.

Stefan Larsson: And you can really see the effect of the three quality of sales actions with the improvements of the PVH Plus execution next level in Tommi and Calvin. You can see that in D2C Q3 and Q4 coming back to high quality growth. So high quality growth, stronger gross margin in D2C. And then you see season by season how we strengthen forward-looking wholesale order books. really excited and feeling great job by the team to then translate that into growth for fall 25 low single digit growth. And this is our team in Europe, doing a great job in connecting, putting more and more relevance and strength into the brand.

Speaker Change: Coming back to high quality growth, so high quality growth stronger gross margin indeed to see and then youll see see some by six and how we strengthen forward looking wholesale order book some.

Speaker Change: Really excited.

Speaker Change: Feeling great job by the team to then translate that into growth.

Speaker Change: For a full 25 low single digit growth and this is our team in Europe doing a great job in connecting putting more and more relevant strength into the brands.

Stefan Larsson: really strong market team execution and really close partnership with our partners. So also connecting back to how we started at 25 and I mentioned in my prepared remarks how we pulled together 300 global most important partners, many of them from Europe, and I was able to engage with many of them one-on-one and really seeing and hearing that they see the progress as well and that that translates into growth.

Speaker Change: Really strong market team execution, and really close partnership with our partners. So also connecting back to how we started with 25 and I mentioned in my prepared remarks, how we pulled together 300 global most important partners many of them from Europe, and I was able to engage with many of.

Speaker Change: Of them, one on one and really seeing and hearing that they see the progress as well and that that translates into growth.

Zach Coughlin: Yeah, hi Jay, and just to put some financials behind that, as Stefan mentioned, we expect a return to growth and importantly we expect Europe profitability in euros to also grow by a low double-digit percent this year, so it really does flow through the fork. Got it. Sounds great. Thank you so much. Thank you.

Speaker Change: And just to put some financials behind that as Stefan mentioned, we expect to return to growth.

Speaker Change: And importantly, we expect Europe profitability in euros to also grow by a low double digit percent. This year. So it really does flow through the full P&L.

Speaker Change: Got it sounds great. Thank you so much.

Michael Binetti: Our next question comes from Michael Binetti with Evercore ISI.

Speaker Change: Thank you. Our next question comes from Michael Binetti with Evercore ISI. Please go ahead.

Zach Coughlin: Please go ahead. Thank you for taking my question, and Stefan, it's really nice to see the Europe order books turn positive. I know we've talked a lot through that journey. I know it took a lot of work. Very nice to see how you guys worked hard.

Michael Binetti: Taking my question and Stefan it's really nice to see the Europe order books turned positive.

Speaker Change: We've talked a lot through that journey I know it took a lot of work <unk> has worked hard on it.

Zach Coughlin: A bit more of a financial question, I guess, for me, Zach, as you look at the – you gave us a big basket of margin drivers here, a fairly complicated year. As you look out past this year, How should we think about the multi-year, the 2026 margin profile? You have SG&A savings coming in, it sounds like, mostly in the back half of the year. I think the run rate was 200 to 300 basis points annualized. You have about 50 basis points of CK disruption from product this year. Is there any reason that doesn't just mechanically come back in 2026?

Michael Binetti: A bit more of a financial question I guess for me is.

Michael Binetti: Is that because you look at the you gave us a big basket of margin drivers here are fairly complicated year as you look out past this year.

Michael Binetti: How should we think about the multiyear the 2026 margin profile you have you have SG&A savings coming in it sounds like mostly in the back half of the year I think the run rate was two to 300 basis points annualized.

Speaker Change: By 50 basis points of CK disruption from product. This year is there any reason that doesn't just mechanically come back in 2026, and then also so it seems like Theres a good basket of margin drivers as you look past. This year into 2026 are there any new headwinds that come online next year that we should be thinking about or even <unk>.

Zach Coughlin: And then also, so it seems like there's a good basket of margin drivers as you look past this year into 2026.

Zach Coughlin: Are there any new headwinds that come online next year that we should be thinking about or any even tailwinds that I didn't mention here yet?

Michael Binetti: That I didn't mention here yet.

Stefan Larsson: All right. First, thank you, Michael, for the call out on Europe. Credit goes to the teams and our partners. Great job by them.

Michael Binetti: Alright, Thank you Michael for the call out on Europe credit goes to the teams and our partners great job by them coming back to your question now.

Zach Coughlin: Coming back to your question now on the value drivers, let me just start from a business perspective, and then Zach will take you through more in detail. We have big positive value drivers in the second half that are not dependent on a change in the trajectory of the consumer for 2025. So the first is European order books that are coming back to growth in Fall 2025. The second is that a big part of our cost efficiency work that we have been on now for a while is taking full hold in the back half. And then you see the Calvin Klein margin, as Zach mentioned, improving already in the back half.

Speaker Change: Value drivers. So let me just start from a business perspective, and then Sac.

Sac: Take you through more in detail, we have big prostitute value drivers in the second half that are not dependent on a change in the trajectory of the cost silver for 2025. So the first is European order books that coming back to growth and $4 25.

Sac: <unk> start a big part of our cost efficiency works that we have been on now for a while is taking full hold in the back half and then Youll see the Calvin Klein March MFS such mentioned.

Sac: Improving is already in the back half so you'll see us exit the year.

Stefan Larsson: So you'll see us exit the year as a leaner, more profitable company. And then to the ASR accelerated share repurchase, you will see that we do that with a smaller share count. So what this means is that we'll come into 2026, and we're already working and planning. for 26, to come into 26 with a step up in profit levels. And then through the PVH Plus execution, we keep building on that.

Sac: Leaner more profitable company and then to the ASR accelerated share repurchase you will see that we do that we had a smaller share count. So what this means is that we've come into 2026. So we are already working and planning.

Sac: 426.

Sac: To come into 26 with a step up in profit levels and then through the PVH class execution, we keep building on that.

Zach Coughlin: Thank you, Stefan. I think that what's most important, as Stefan has said, is the actions that we're planning throughout the year as we progress from the first quarter to the fourth quarter are really built on things in our control. Stefan laid out what those pieces are, and so that work is either already confirmed for things like the European order books or well underway around much of the cost action, which is really probably the most powerful driver of improvement from the start of the year. So we expect fourth quarter operating margin to be much higher than 2024.

Speaker Change: Thank you Stefan I think what's most important is Stefan has said is the actions that we're planning throughout the year as we progress from.

Speaker Change: From the first quarter to the fourth fourth quarter really built on things in our control Stefan laid out what those pieces are.

Speaker Change: And so that work is either already confirmed for things like the European order books or well underway around much of the cost action, which is really probably the most powerful driver of improvement from the start of the year. So we expect fourth quarter operating margin to be much higher than 2024.

Zach Coughlin: And that's really the new starting point as we enter 2026, because the building blocks that Stefan laid out are really foundation building that raised the water level that we would then move forward into 2026.

Speaker Change: That's really the new starting point as we enter 2026 because of the building blocks of Stefan laid out are really foundation and building that raised the water level that we would then move forward into 2026 from there.

Michael Binetti: Okay, thanks a lot guys, I appreciate it.

Speaker Change: Okay. Thanks, a lot guys I appreciate your help.

Dana Telsey: We'll next go to Dana Telsey with Telsey Group, please go ahead. Hi, good morning, everyone, and nice to see the progress. As you think about the connections, Stefan, between product and engagement, there's a lot going on in each brand. As you think of the timing of it, how do you think of it rolling out this year? How do you think of the different global regions? And what does marketing spend look like to drive this engagement?

Dana Telsey: We'll next go to Dana Telsey with Telsey Group. Please go ahead.

Dana Telsey: Hi, good morning, everyone and nice to see the progress congratulations.

Dana Telsey: Do you think about the connection Stefan between product and engagement. There is a lot going on in each brands as you think of the timing of that how do you think about rolling out. This year, how do you think of the tepid global regions and what its marketing spend look like to drive different outcomes.

Stefan Larsson: Thank you. Yeah, thank you, Dana and. You know, we have been very focused on systematic and repeatable approach to bring product strength, consumer engagement, marketing strength, and then translating that to impact with the partners and our consumers. But sometimes it's better to describe this with concrete examples. So what you see right now in Calvin Klein with our underwear, cut-through underwear campaign with Bad Bunny is really putting these pieces together. So what you will see every season going forward, you will see a cut-through campaign from Calvin Klein and a cut-through campaign from Tommy Hilfiger. So going back to the underwear Calvin Klein Bad Bunny.

Dana Telsey: Thank you.

Stefan Larsson: Yes, Thank you Dana.

Dana Telsey: <unk>.

Dana Telsey: You know we have been.

Dana Telsey: Very focused all systematic repeatable approach to bring product strengths customer engagement marketing strength, and then translating that to impact with our partners and our consumers, but sometimes it's better to describe this with concrete example, so what you see right now in Calvin Klein with our underwear capture.

Speaker Change: <unk> underwear campaign with bad Bonnie.

Speaker Change: It's really putting these pieces together so what you will see season.

Every season going forward, you will see a capture campaign for Calvin Klein and our culture campaign for Tommy Hilfiger, So going back to the underwear Calvin Klein pad Bonnie.

Stefan Larsson: What we're doing there is we're leaning into our key growth categories and the most important category for Calvin Klein underwear. We're putting a lot of we're leaning into the most important hero product, the cotton stretch. And we are putting a lot of innovation into that hero product, creating a new hero product with the most innovation in the And then we build that into a cut-through campaign and we collaborate with somebody like Bad Bunny, who is one of the most streamed artists, one of the most popular, acclaimed artists right now. And then you see unlocking the growth category, innovation in the hero product, the talent amplification from Bad Bunny.

Speaker Change: What we're doing there is we're leaning into our key growth categories on the most important category for Calvin Klein underwear, we are putting a lot of we're leaning into the most important hero product cutoffs stretch and we're putting a lot of innovation into that hero product, creating a new.

Speaker Change: Hero product with the most innovation in the industry and then we build that into a cup through a campaign and we collaborate with somebody like Bob <unk>, who is one of the most streamed art is one of the most popular claimed artist right now.

Speaker Change: And then you see unlocking the growth category innovation and the hero product.

Speaker Change: The talent amplification for bad Bonnie and then Youll see it in the impact in the door. So stores, yes, you'll see it in the social media impact.

Stefan Larsson: And then you see it in the impact in the doors and stores. Yes, you see it in the social media impact of reaching almost 30 million on Calvin's Instagram page, the number of views. tens of millions of views within the first few days on the Bad Bunny video. But then you see that translating into traffic and stores and e-commerce sales of the icon Cotton Stretch in many of our channels was up 20% to our previous Cotton Stretch products.

Speaker Change: Reaching almost $30 million.

Speaker Change: Calvert assessed around page the number of views.

Speaker Change: Tens of millions of views within the first few days on the bad <unk> video, but then you see that translating into traffic and stores and ecommerce sales of the icon koto stretch in many of our channels was up 20% to our previous.

Stefan Larsson: So that's an example for Calvin Klein. On Tommy, you see the Tommy season by season bringing the Tommy lifestyle of classic American cool made current come to life. So Tommy and the team just came back from the Caribbean, having invited a number of really important talent partners to the brand, Patrick Schwarzenegger with White Lotus Connection, Madeline Klein, Abbey Champion, to a Hilfiger resort themed event. And this will support our summer campaign in our wholesale doors in our stores. And it launches in May, but it covers the whole summer period. But already pre-launch, we have 160 million, as I mentioned, social media posts just from the talent posting while they were part of creating this event.

Speaker Change: Qatar stretch products. So that's an example for Calvin Klein on Tommy you'll see the Thomas C. Some by C. Sub brand named Tommy lifestyle of Classic American Coal's made Colorado come to life. So told me and the team just came back from the Caribbean.

Speaker Change: We invited a number of really important talent partners to the brand Patrick's worth Snagger for Wi flow disconnection modeling slide Abbott champion to our Hilfiger resort themed.

Speaker Change: At that and this will support our summer campaign in our wholesale doors in our stores and it launched us in may but it covers.

Speaker Change: The whole summer period, but already pre launch we have $160 million as I mentioned, social media post just from the tablet posting wise there were part of creating this event. So what you will see going forward. This season by season, you will see.

Stefan Larsson: So what you will see going forward is season by season, you will see cut-through campaign by cut-through campaign connecting the improved product strength with improved marketing with improved partner and in-store execution. And then we'll be relentless of just keep improving.

Speaker Change: True cultural campaign by capture campaign connecting the improved product strengths with improved marketing with improved heartburn in the in store execution and that will be relentless of just keep improving.

Dana Telsey: Thank you, and next. And the... and then the marketing spend. marketing spent, we continue to invest in growth and marketing is one of the top priorities.

Speaker Change: Thank you our next.

Speaker Change: And then on the marketing spend.

Speaker Change: The marketing spend we continue to.

Speaker Change: <unk> growth and marketing is one of the top priorities there.

Dana Telsey: Thank you. Thanks, Dana.

Speaker Change: Thank you.

Dana Telsey: Thanks Dana.

Brooke Roach: Thank you.

Brooke Roach: Next we'll go to Brooke Roach with Goldman Sachs. Please go ahead. Good morning and thank you for taking my question.

Speaker Change: Thank you our next well go to Brooke Roach with Goldman Sachs. Please go ahead.

Brooke Roach: Good morning, and thank you for taking my question.

Stefan Larsson: I was hoping you could elaborate on your relationship with your wholesale partners in North America as you execute the PVH Plus plan. What are your conversations trending like today and what's your outlook for growing in your core and with the business that was just brought back from G3? Thank you. Yes, so thanks, Brooke. So very, very strong partnerships with our key wholesale partners in North America and across the world. But specifically in North America, what the team is doing a really good job on is focusing in on each of the brands and driving product strength, product relevance in optimized spaces with the right marketing support.

Brooke Roach: I was hoping you could elaborate on your relationship with your wholesale partners in North America as you execute the PBS plus plan what are your conversations like today and what's your outlook for growing in your core and with the business that was just brought back from Jefferies. Thank you.

Speaker Change: Yes, so thanks, Brooke so very strong partnerships with our key wholesale partners in North America and across the World are specifically in North America. What the team is doing a really good job on focusing in on each of the brands and driving product strength.

Brooke Roach: Products' relevance.

Speaker Change: In optimized spaces with the right marketing support so.

Stefan Larsson: So Calvin Klein has a great milestone with Macy's this morning, Herald Square, for those of you who are in New York today, Macy's flagship, all the windows are taken over by Calvin Klein and the launch of Calvin Klein Williams. And marketing support by Lily Collins resonated really well with the Macy's consumer. And you see early first couple of weeks, we are having the collection, putting the shops together. But that's what you will see from us, that consistency in driving product relevance, brand relevance, differentiation to that North America wholesale consumer.

Speaker Change: Calvin Klein has a great milestone we've made this this morning Herald square for those of you who are in New York today Macy's flagship all the windows are taken over by Calvin Klein and the launch of Calvin Klein Womens and marketing support by Lilly colleagues resonated really well with the Macy's crossover.

Speaker Change: And Youll see early first couple of weeks, we are having the collection, putting the shops together, but thats, what youll see from our staff cost system same driving.

Speaker Change: Product relevance brand relevance and differentiation.

Speaker Change: <unk> North America wholesale consumer so.

Matthew Boss: So very, very excited about seeing the progress season. We'll next go to Matthew Boss with J.P. Morgan. Please go ahead. Great, thanks.

Speaker Change: Very excited about seeing the progress season after season.

Speaker Change: Great. Thanks, so much.

We'll next go to Matthew boss with Jpmorgan. Please go ahead.

Matthew Boss: So, Stefan, could you elaborate on the recent change you've seen in North America, just how you're planning inventory across DTC at both Calvin and Tommy over the course of the year?

Speaker Change: Great. Thanks, So stephane could you elaborate on the recent change <unk> seen in North America, just how youre planning inventory across DTC at both Calvin and Tommy over the course of the year and then Zach if you could just walk through drivers of first quarter gross margin the decline and just the cadence of gross margin beyond the first quarter ticket.

Stefan Larsson: And then, Zach, if you could just walk through drivers of first quarter gross margin, the decline, and just the cadence of gross margin beyond the first quarter to consider. Yeah, thanks, Matt. So let me start by the North America backdrop. And as we mentioned, we and looks like most everyone in the sector saw a step back from the consumer in February. So there is clearly a challenged backdrop. We saw March slightly improving, stabilizing trends. But as Easter is three weeks later this year than last year, Easter is an important consumer moment in North America. We have to look at March and April together.

Sure.

Speaker Change: Yeah. Thanks, Matt So let me start by.

Speaker Change: The North America backdrop, and as we mentioned we.

Speaker Change: It looks like most everyone in the sector saw a step back from the <unk> of February. So there is clearly a challenging backdrop.

Speaker Change: We saw March slightly improving stabilizing trends, but as Easter is three weeks later this year than last year Easter is an important cultural moment in North America, we have to look at March and April together, but our outlook is reflecting the current trends that we see and then ill.

Zach Coughlin: But our outlook is reflecting the current trends that we see. And then our focus is to be fully on what we can control driving strength in the product, the marketing, the marketplace execution. On the inventory side, we feel really good about our inventory levels and especially the composition, because when you look at the inventory we have right now, it's more fresh and less aged than same time last year. So stock freshness is really important to us as we become more data and demand driven. Then we have better investments coming into 25 in core essentials hero products.

Speaker Change: Focus is to be fully on what we can control driving strength in the product the marketing the marketplace execution on the inventory side, we feel really good about our inventory level and especially the composition because when you look at the inventory we have right now.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: More fresh and less <unk>.

Speaker Change: H than same time last year. So stop freshness is really important to us as we become more data on demand driven than we have battery investments coming into 'twenty five in core Essentials hero products. One example of that test iPhone koto stretch that new hero product with about a tougher comp.

Zach Coughlin: One example of that is the Icon Cotton Stretch, the new hero product with the Bad Bunny cut through campaign. And then we have inventory backing up the transition from G3 on the women's sportswear. So all in all feeling really good about that.

Speaker Change: And then we have inventory backing up <unk>.

Speaker Change: <unk> from G. III on the women's sportswear, so all in all feeling really good about that.

Zach Coughlin: Yeah, and I'm at for gross margin for the first quarter for the year were indicated down around 250 basis points. You think about the drivers that impact us in the fourth quarter, you've got an increased promotional environment, especially in the US, we've got increased freight costs. And then obviously, we've got some wholesale mix that's driving gross margin that doesn't have any impact on profitability. I think then as we come into the first quarter, the only new item in there is really the intake of the G3 women's sportswear that has around a 50 basis point negative margin and gross margin as we move from a licensing business model into a wholesale business.

Speaker Change: IMAX for gross margin for the first quarter for the year were indicated down around 250 basis points.

Speaker Change: You think about the drivers that impacted us in the fourth quarter you have got an increased promotional environment, especially in the U S. We've got increased freight costs.

Speaker Change: And then obviously, we've got some wholesale mix that's driving gross margin that doesn't have any impact on profitability I think that as we come into the first quarter. The only new item in there is really the intake of the G. III women's sportswear that has around a 50 basis point.

Speaker Change: Negative margin and gross margin as we move from a licensing business model into a wholesale business model.

Zach Coughlin: So for the full year, we're expecting to be down around 100 basis points. That's around 50 basis points tied to the G3 intake we just talked about, and the rest really explained by the impacts of some of the CK product delays, which will primarily affect the first year. So if we think about that steady progression from that down 250 landing to a four-year 100, the wholesale mix will normalize. We'll work on the freight impacts. And that begins to normalize. And we end the year with a number much closer to something really related, tied to just the G3 business model.

Speaker Change: So for the full year, we're expecting to be down around 100 basis points. That's around 50 basis points tied to the G. III intake, we just talked about and the rest really explained by the impacts of some of the CK product delays, which will primarily affect the first half. So if we think about that steady progression from that down to 50 landing to a.

Speaker Change: Full year 100.

Speaker Change: Wholesale mix will normalize.

Speaker Change: We'll work on the freight impacts that began to normalize and we ended the year with a number much closer to something really related tied to just the G III business model transition.

Speaker Change: Okay.

Krista Zuber: We'll next go to our last question with John Kernan with TD Cal, and please go ahead.

Speaker Change: We'll next go to our last question with John Kiernan with TD Cowen. Please go ahead.

Stefan Larsson: Good morning, it's Krista Zuber on for John. Thank you for taking our questions. Just one follow-up on the inventory. You've made such tremendous inroads in cleaning up the channels. You know, the focus on the disciplines, SKU planning and the rationalization. How should we think about, you know, given some of the product puts and takes that are happening this year with the transition from the license? How should we think about the opportunity to accelerate your inventory turns given, you know, two years of what now appears to be sort of a stabilization in your terms? Thank you.

John Kiernan: Good morning, Christopher.

Speaker Change: Krista Zuber on for John Thank you for taking our questions. Just one follow up on the inventory you have made such tremendous inroads in cleaning up the channels.

Speaker Change: The focus on the discipline of care.

Speaker Change: Are you planning in the rationalization, how should we think about given some of the product puts and takes that are happening this year with the transition from the license.

Speaker Change: Should we think about the opportunity to accelerate your inventory turns given two years of what now appears to be sort of a stabilization in near term. Thank you.

Stefan Larsson: Thanks, Christine. It's... The way we think about it and the way we work with inventory is to season by season get better in the planning and the buying of the assortment, better with planning and buying of the inventory connecting to that assortment, so better and better optimize inventory to demand. And then we'll continue to learn. But long term, the goal is to continue to optimize inventory to demand. And then sometimes we learn when we go too lean, and then we have to take a step back in specific areas of the assortment, like the never out of stock or a new product launch.

Speaker Change: Thanks, Chris.

Speaker Change: The way, we think about it and the way we work with inventory is too.

Speaker Change: Season by season gets better in the planning and the buying of the assortment better.

Speaker Change: Planning and buying of the inventory connecting to that assortment, so better and better optimize inventory to demand and then we'll continue to learn but long term. The goal is to continue to optimize inventory to demand and then sometimes we learned when we go to lean and then we have to take a step back in specific.

Speaker Change: Rick.

Speaker Change: Areas of the assortment like a never out of stock or a new product launch, but long term youll see that will continue to become more data on demand driven.

Stefan Larsson: But long term, you'll see that we'll continue to become more data and demand driven and step by step, better and better optimize inventory.

Speaker Change: Step by step better and better optimize inventory to develop.

Stefan Larsson: Okay, given that that was the last question, I just want to thank you for being on this journey with us. We're in the middle of unlocking the full potential of Calvin Klein and Tommy Hilfiger, two of the most globally iconic and beloved brands. And 2024 was a year of significant progress in both brands or regions. 2025, you'll see us leaning into the next level execution at pace and building on the execution momentum of 2024. And I'm really very proud of our team's work, our partners, and we are full steam ahead. So looking forward to connecting again a quarter from now.

Speaker Change: Okay, given that that was the last question just want to thank you for being on this journey with US we are in the middle of unlocking the full potential of Calvin Klein and Tommy Hilfiger at two of the most globally iconic and beloved brands.

Speaker Change: And 2024 was a year of significant progress in both graphs or readjust 25, you will see us leaning into the next level of execution as pace and.

Speaker Change: And building on the execution momentum of 24 and I'm really.

Speaker Change: Very proud of our team's work to our partners and we are full steam ahead. So looking forward to connecting again a quarter from now thank you.

Stefan Larsson: Thank you.

Operator: And ladies and gentlemen, that does conclude today's program. Thank you for your participation. You may disconnect at any time.

Speaker Change: Thank you and ladies and gentlemen that does conclude today's program. Thank you for your participation you may disconnect at any time.