INVESTOR UPDATE SPRING 2016

Transcription

1 INVESTOR UPDATE SPRING 2016

2 SAFE HARBOR We (PVH Corp.) obtained or created the market and competitive position data used throughout this presentation from research, surveys or studies conducted by third parties (including, with respect to the U.S. department and chain store rankings, the NPD Group/POS Tracking Service), information provided by customers and industry or general publications. The specific U.S. department and chain store rankings we reference are on a unit basis. Industry publications and surveys generally state that they have obtained information from sources believed to be reliable but do not guarantee the accuracy and completeness of such information. While we believe that each of these studies and publications and the other information we receive or review is reliable, we have not independently verified such data and we do not make any representation as to the accuracy of such information. The information in our presentation contains certain forward-looking statements which reflect our view as of March 23, 2016 of future events and financial performance. These forward-looking statements are subject to risks and uncertainties indicated from time to time in our SEC filings, as more fully discussed in our safe harbor statements and risk factors found in our SEC filings. These risks include our right to change strategies, objectives and intentions; our need to use significant cash flow to service our debt obligations; our vulnerability to weather, economic conditions, fuel prices, fashion trends, loss of retail accounts, epidemics, war, terrorism, scarcity of raw materials, fluctuations in foreign currency exchange rates and other factors; our reliance on the sales of our business partners; and our exposure to the behavior of our associates, business partners and licensors. As such, our future results could differ materially from previous results or our expectations as of March 23, We do not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimate regarding revenue or earnings, whether as a result of the receipt of new information, future events or otherwise. This presentation also includes non-gaap financial measures, as defined under SEC rules. Reconciliations of these measures are included at the end of this presentation, as well as in the SEC filings noted in this presentation. Our SEC filings are available on our website at and the SEC s website at 2

3 PVH BY THE NUMBERS PVH HISTORY ESTABLISHED IN 1881 OUR 2015 REPORTED REVENUES WERE OVER $8.0 BILLION 30,000+ ASSOCIATES GLOBALLY 700,000+ PEOPLE REACHED THROUGH OUR SUPPLY CHAIN WE OPERATE IN OVER 40 COUNTRIES PVH FOUNDATION (THE COMPANY S PHILANTHROPIC DIVISION) HAS BEEN IN EXISTENCE FOR 30+ YEARS 45% 20,000+ POINTS OF SALE REVENUES GENERATED OUTSIDE OF THE U.S. 3

4 WE LIVE BY OUR CORE VALUES We live by our core values which embody who we are, guide our decisions and inspire us 4

5 CORPORATE RESPONSIBILITY (CR) IS CENTRAL TO HOW WE CONDUCT BUSINESS We recognize the GREAT RESPONSIBILITY AND OPPORTUNITY TO MAKE POSITIVE IMPACTS from source to store by EMPOWERING THE PEOPLE WE WORK WITH, PRESERVING THE ENVIRONMENT AND SUPPORTING OUR COMMUNITIES CR IS INSTILLED IN OUR ORGANIZATION and applies across all stages of our operations and supply chain, starting with our senior leadership and Board of Directors 5

6 THREE DISTINCT BUSINESSES, ALL POSITIONED FOR GLOBAL GROWTH 2015 Global Retail Sales: $8.2 BN Revenues: $2.9 BN EBIT Margin*: 14.9% Constant Currency EBIT Margin*: 15.3% 2015 Global Retail Sales: $6.5 BN Revenues: $3.4 BN EBIT Margin*: 11.9% Constant Currency EBIT Margin*: 12.8% 2015 Global Retail Sales: $3.6 BN Revenues: $1.7 BN EBIT Margin*: 7.1% * Figures exclude non-recurring and one-time items. Refer to Appendix for GAAP reconciliations. 6

7 PVH IS A GLOBAL LEADER IN THE APPAREL INDUSTRY PVH is one of the largest global apparel companies with over $8 billion in revenues $ Revenue ($ in billions) $8.0 $7.4 $4.7 $4.5 $4.2 $3.7 $3.4 $3.1 $2.3 $2.2 $0.3 Source: Factset. Factset Consensus estimates used for Michael Kors, Burberry, Ralph Lauren and Vince. 7

8 CALVIN KLEIN AND TOMMY HILFIGER ARE KEY DRIVERS TO OUR BUSINESS Calvin Klein & Tommy Hilfiger currently account for ~80% of PVH s revenues and ~90% (1) of PVH s EBIT Total Revenue by Business (2015) 42% 22% 42% 13% EBIT (1) by Business (2015) 36% 45% TOMMY HILFIGER CALVIN KLEIN HERITAGE BRANDS (1) Figures exclude non-recurring and one-time items and corporate expenses. Refer to Appendix for GAAP reconciliations. 8

9 PVH HAS A SIGNIFICANT GLOBAL PRESENCE Approximately 45% of PVH s revenues are generated outside the U.S. and nearly 2/3 of PVH s EBIT (1) is subject to foreign exchange risk 9% 20% Total Revenue by Region (2015) 27% 36% EBIT (1) by Region (2015) 55% 33% U.S. Americas (excluding U.S.) Europe Asia Pacific 9% 11% Note: Americas (excluding U.S.) includes Canada, Mexico, South America, Central America and the Caribbean; Europe includes the Middle East and Africa; Asia Pacific includes Australia and New Zealand. (1) Figures exclude non-recurring and one-time items. 9

10 PVH GLOBAL STORE COUNTS BY REGION (AS OF JANUARY 31, 2016) EUROPE (2) NORTH AMERICA (1) TOTAL STORES: ~645 Tommy Hilfiger: ~250 Calvin Klein: ~225 Van Heusen: ~170 LATIN AMERICA (3) TOTAL STORES: ~315 Tommy Hilfiger: ~210 (4) Calvin Klein: ~105 (5) TOTAL STORES: ~1,480 Tommy Hilfiger: ~775 Calvin Klein: ~705 ASIA PACIFIC (6) TOTAL STORES: ~2,330 Tommy Hilfiger: ~560 Calvin Klein: ~1, Includes the U.S., Canada and Mexico. 2. Includes the Middle East and Africa; includes concession locations and franchisee and distributor stores. 3. Includes Central and South America and the Caribbean. 4. All locations are licensee stores. 5. Includes franchisee and distributor stores. 6. Includes concession, franchisee and licensee stores. 10

11 $ Millions A RICH HISTORY OF SALES AND EARNINGS GROWTH Revenue & EPS Growth ( ) $9,000 $8,000 $6.58 $7.03 $8,216 $7.30 $8,241 $7.05 $8.00 ($8.43 Constant Currency) $8,020 $7.00 $7,000 $5.44 $6.00 $6,000 $4.31 $5,891 $6,043 $5.00 $5,000 $4,000 $2.62 $3.21 $2.99 $2.79 $4,637 $4.00 $3.00 $3,000 $2,000 $1,000 $1.88 $1.37 $0.98 $2,425 $2,397 $2,399 $2,091 $1,909 $1,548 $1, $2.00 $1.00 $0.00 Note: figures not restated for change in accounting for retirement plans and figures exclude non-recurring and one-time items. Refer to Appendix for GAAP reconciliations. 11

12 PVH KEY INITIATIVES FOR 2016 AND BEYOND 1. Drive consumer engagement Invest in our product, presentation, marketing and in-store experiences. 2. Expand across Asia Pacific and Latin America, the largest growth markets for Tommy Hilfiger and Calvin Klein. 3. Assume more direct control over Calvin Klein and Tommy Hilfiger licensed businesses where we believe that we can maximize our core competencies to increase sales and profitability. 4. Execute against our Calvin Klein European strategy to achieve target operating results. 5. Invest strategically in our global operating platforms to support our growth initiatives. 6. Grow our digital commerce presence by enhancing and expanding our directly operated sites and our online penetration with wholesale partners. 7. Invest in talent, develop our people and expand their career development opportunities while providing an inclusive environment where every individual is valued. 8. Generate solid free cash flow, which we will use strategically to drive sustainable long-term growth and stockholder returns. 12

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14 TOMMY HILFIGER BRAND OVERVIEW 2015 GLOBAL RETAIL SALES: $6.5 BN 5% 10% North America Latin America (1) (2) 46% 39% Asia Pacific Europe (4) (3) One of the world s leading DESIGNER LIFESTYLE Brands Celebrates the essence of CLASSIC AMERICAN COOL STYLE Strong GLOBAL BRAND AWARENESS (1) North America includes Canada and Mexico. (2) Latin America includes South America, the Caribbean and Central America. (3) Asia Pacific includes Japan, Australia and New Zealand. (4) Europe includes the Middle East and Africa. 14

15 TOMMY HILFIGER BRAND OVERVIEW STYLE / TARGET Hilfiger Collection: The pinnacle of the Tommy Hilfiger product offering, blending the brand s Americana heritage with contemporary influences and a playful fashion edge. The collection targets 25 to 40-yearold consumers and includes designs that premiere on the runway during New York Fashion Week. Tommy Hilfiger Tailored: Targeting 25 to 40-year-olds, this line integrates a sharp, sophisticated style with the brand s menswear heritage. From structured suiting to casual weekend wear, classics are modernized with precision fit, premium fabrics, rich colors and luxe details all executed with the brand s signature twist. Tommy Hilfiger: Our core line, which embodies the brand s classic American cool spirit and preppy with a twist designs, focusing on a 25 to 40-year-old consumer. Hilfiger Denim: Inspired by American denim classics with a modern edge that is more casual than the Tommy Hilfiger label. Targeting 18 to 30-yearold denim-oriented consumers, the line focuses on premium denim separates, footwear, bags, accessories, eyewear and fragrance. DISTRIBUTION Global Flagship and Anchor Stores, Global tommy.com, Select Global Wholesale Global Retail, Global tommy.com, Global Wholesale Global Retail, Global tommy.com, Global Wholesale Global Retail, Global tommy.com, EU & International Wholesale 15

16 TOMMY HILFIGER REGIONAL DISTRIBUTION OF OUR BRAND PORTFOLIO North America Europe Asia Latin America 16

17 TOMMY HILFIGER GROWTH OPPORTUNITIES PRODUCTS CHANNELS MARKETS GROWTH REGIONS WOMENSWEAR MEN S TAILORED RETAIL ASIA PACIFIC LATIN AMERICA UNDERWEAR ACCESSORIES E-COMMERCE WHOLESALE 17

18 TOMMY HILFIGER GLOBAL MARKETING & COMMUNICATIONS Over $150 million in global annual marketing spend Strategic support of high growth potential categories: Rafael Nadal, International Tennis Star First campaign as global brand ambassador for Tommy Hilfiger underwear, tailored & fragrance launched in Fall 2015 Global Multi-media advertising strategy in over 40 countries Viral campaign video ranked in YouTube s Top 10 most viewed in August Drove significant global growth of underwear across all sales channels Gigi Hadid, Millennial Icon & Social Supermodel Global brand ambassador for Tommy Hilfiger Women s beginning Fall 2016 Creating halo effect on sell-in of the Fall 2016 sportswear collection Global 30th Anniversary Tour: Continued to present one of NYFW s largest, most widely-covered shows Opened 2nd multi-level store in Paris on Boulevard des Capucines Recreated Fall 2016 fashion show in Beijing & celebrated the opening of the largest Tommy Hilfiger store in China Opened two new stores in Brazil, including the prestigious Rua Oscar Freire Awarded GQ Designer of the Year in Berlin 18

19 TOMMY HILFIGER DIGITAL INNOVATION Investing in Market-Leading Digital Innovation Digital Showroom: An industry first, taking the traditional wholesale buying process to the next level Virtual Reality: One of the first brands to introduce integrated Virtual Reality experiences for consumers at retail E-Commerce Scope: tommy.com now operates direct sites in over 30 countries Democratization of Fashion: Utilizing the runway to launch partnerships with Instagram and Twitter to engage, involve and inspire customers Consumer Fashion Show: September 2016 runway show will launch a new era for fashion shows, including multi-media broadcast and Buy now. Wear now ecommerce partnerships Social Media Reach: #TOMMYFALL16 broke the 1 billion mark for global social media impressions Industry Recognition: Named Exceptional Experimenter in the L2 Luxury: New York Fashion Week 2016 report Omnichannel Transformation: From industry leading SAP solutions to RFID technology, we are connecting and streamlining every step of our value chain to enhance the consumer experience 19

20 TOMMY HILFIGER BUSINESS OVERVIEW & FINANCIALS Tommy Hilfiger Business Summary 2015 Reported Revenues: $3.4 BN International Revenues: ~$1.8 BN North America Revenues: ~$1.6 BN 2015 Reported EBIT Margin (1) : 11.9% 2015 Constant Currency EBIT Margin (1) : 12.8% (1) EBIT margin excludes non-recurring and one-time items. Refer to Appendix for GAAP reconciliation of EBIT. 20

21 TOMMY HILFIGER INTERNATIONAL OVERVIEW Healthy brand with premium positioning overseas Tommy Hilfiger International EBIT margins reached peak levels of 13.9% on a constant currency basis in 2015 Marketing efforts focused on digital and social media Europe represented ~45% of Tommy Hilfiger global reported revenues in EUROPE REVENUES BY DISTRIBUTION (1) MODEL 59% 41% WHOLESALE RETAIL Localized management differentiates brand from peers Continues to experience solid multi-year business trends Net sales growth in all EMEA (Europe, Middle East & Africa) markets in 2015 Operates the largest e-commerce business within PVH; Tommy Hilfiger s European website experienced over 20% comparable sales growth in 2015 Japan: ~5% of Tommy Hilfiger global reported revenues in 2015; Repositioning in progress, with early signs of improvement DÜSSELDORF, GERMANY (1) Retail and wholesale split excludes licensing revenues. 21

22 TOMMY HILFIGER NORTH AMERICA OVERVIEW North America accounted for ~50% of Tommy Hilfiger global reported revenues in 2015 Strong retail presence of ~250 stores (primarily outlet stores) Continued wholesale sales growth through key partners: U.S. Exclusive partnership with Macy s for sportswear 2015 REVENUES BY DISTRIBUTION (1) MODEL 30% 26% 70% WHOLESALE RETAIL Canada Retail partnership with Hudson s Bay Company G-III licensed to operate Tommy Hilfiger s womenswear wholesale business in North America, beginning Holiday 2016 Improvements in quality, styling and in-store presentations Healthy sales growth with our domestic consumers Investments in e-commerce and digital marketing driving brand relevance and consumer engagement E-commerce experiencing solid growth, driven by improvements to site design and technology, as well as social media efforts (1) Retail and Wholesale split excludes licensing revenues. 22

23 TOMMY HILFIGER LICENSED BUSINESSES OVER TIME, WE LOOK TO ASSUME MORE DIRECT CONTROL OVER VARIOUS LICENSED REGIONS ASIA PACIFIC RETAIL SALES: ~$650MM LATIN AMERICA & MEXICO RETAIL SALES: ~$500MM JOINT VENTURE CHINA Acquisition expected to close in late 1Q16 / early 2Q16 INDIA AUSTRALIA BRAZIL DISTRIBUTOR INDONESIA VIETNAM PHILIPPINES LICENSE KOREA HONG KONG TAIWAN MEXICO LATAM MALAYSIA SINGAPORE 23

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25 CALVIN KLEIN BRAND OVERVIEW 2015 GLOBAL RETAIL SALES: $8.2 BN 3% 18% North America (1) 60% 19% Latin America (3) Asia Pacific (2) 6% 4% 19% 19% Europe (4) 52% ONE OF THE BEST KNOWN DESIGNER NAMES IN THE WORLD. PROVOCATIVE, MODERN, ICONIC DESIGN POSITIONING. STRONG GLOBAL APPEAL. (1) North America includes Canada and Mexico. (2) Latin America includes South America, the Caribbean and Central America. (3) Asia Pacific includes Australia and New Zealand. (4) Europe includes the Middle East and Africa. 25

26 CALVIN KLEIN BRAND OVERVIEW CALVIN KLEIN COLLECTION offers halo and inspiration to all levels of the brand, which are leveraged across multiple products, channels and price points. CALVIN KLEIN reflects the complete lifestyle of Calvin Klein offering fashion that is every bit as exciting as it is essential. 26

27 CALVIN KLEIN REGIONAL DISTRIBUTION OF OUR BRAND PORTFOLIO Calvin Klein Collection Calvin Klein Platinum Calvin Klein Calvin Klein Jeans Calvin Klein Underwear Calvin Klein Performance North America Europe (Outlet) Asia (including Joint Ventures) (Australia & India) Latin America Distributors (China) Brazil 27

28 CALVIN KLEIN GROWTH OPPORTUNITIES PRODUCTS CHANNELS MARKETS GROWTH REGIONS EUROPE JEANSWEAR UNDERWEAR STORES E-COMMERCE ASIA PACIFIC LATIN AMERICA SPORTSWEAR ACCESSORIES TRAVEL RETAIL SHOPS IN SHOPS 28

29 CALVIN KLEIN GLOBAL MARKETING & COMMUNICATIONS Continuing to Drive the Calvin Klein Brand Forward through a focus on global elevation, cohesion and consistency Print editorial achieved an estimated $373M in ACE value 6% increase since 2014 Over $320 million in global annual marketing spend Five Key Objectives: 1. Drive brand relevancy with emphasis on expanding consumer reach 2. Present the brand to consumers in a globally consistent, elevated manner 3. Consumer engagement through digital (media & commerce) 4. Develop world-class product offerings, with an emphasis on innovation 5. Grow high-potential businesses 29

30 DRIVING CONSUMER ENGAGEMENT THROUGH INNOVATIVE MARKETING CAMPAIGNS Justin Bieber featured as the face of Calvin Klein Jeans and Calvin Klein Underwear (Spring 2015) Kendall Jenner featured in the #mycalvins Denim Series campaign in Spring 2015 and The Original Sexy campaign in Fall 2015 Justin Bieber and Kendall Jenner and a variety of other global superstars, actors, musicians, activists and models featured in the brand s I in #mycalvins campaign for Spring 2016 L2 ranked Calvin Klein #9 on its Digital IQ Index: Fashion in 2015 Calvin Klein received the CLIO Grand Image Award Integrated Campaign for showyours.#mycalvins 30

31 CALVIN KLEIN BUSINESS OVERVIEW AND FINANCIALS SUMMARY FINANCIALS 2015 Reported Revenues $2.9 BN Despite the fact that we brought back in house our two largest apparel categories in 2013, over 50% of the brand continues to be from licensing 2015 Reported EBIT Margin (1) 14.9% PAST TODAY 2015 Constant Currency EBIT Margin (1) 15.3% Licensee 89% Licensee 57% NORTH AMERICA ~55% of 2015 Reported Revenues INTERNATIONAL ~45% of 2015 Reported Revenues Directly Operated 11% 2012 Directly Operated 43% 2015 (1) EBIT margin excludes non-recurring and one-time items. Refer to Appendix for GAAP reconciliation of EBIT. 31

32 CALVIN KLEIN NORTH AMERICA OVERVIEW Calvin Klein North America revenues accounted for ~55% of Calvin Klein global reported revenues in Healthy positioning across wholesale and retail channels REVENUES 55% 45% Solid e-commerce growth, driven by recent investments in website navigation and technology BY DISTRIBUTION MODEL WHOLESALE RETAIL Provocative 360 marketing campaigns are a driving force behind the brand, leveraging traditional and digital platforms Underwear experiencing strong revenue growth, particularly on the women s side Sportswear and accessories posting healthy performance Jeanswear turnaround moving forward; Customer responding to investments in product, quality, styling, consumer engagement and product experience; however, overall category performance continues to be slow Note: Retail and Wholesale split excludes licensing revenues. 32

33 CALVIN KLEIN INTERNATIONAL OVERVIEW ASIA PACIFIC Represented ~20% of Calvin Klein global reported revenues in 2015 Distribution primarily through retail channel (concession shops and free-standing stores) Strong brand positioning across all categories REVENUE BY REGION KOREA ~25% CENTRAL & SOUTHEAST ASIA PACIFIC ~30% CHINA ~45% EUROPE LATIN AMERICA (PRIMARILY BRAZIL) Represented ~20% of Calvin Klein global reported revenues in 2015 Distribution ~55% retail / ~45% wholesale Biggest brand opportunity, as we turn around Calvin Klein Jeans and capitalize on the strong consumer appetite for Calvin Klein Underwear Represented ~4% of Calvin Klein global reported revenues in 2015 Distribution primarily through wholesale channel, with select retail stores as a complement Brand positioned well, with strong consumer relevance and acceptance across product lines 33

34 CALVIN KLEIN LICENSING CONTINUES TO BE IMPORTANT Top 7 Partnerships Represented Over 80% of licensing and advertising revenue in 2015 Over time, we look to assume more direct control over various licensed businesses where we have core competencies WOMEN S APPAREL FRAGRANCE FOOTWEAR G-III $1.6BN COTY $1.3BN JIMLAR >$300MM MEN S TAILORED WATCHES + JEWELRY CK PLATINUM / ASIA EYEWEAR PEERLESS ~$275MM SWATCH ~$225MM CLUB 21 ~$150MM MARCHON ~$150MM 34

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36 HERITAGE BRANDS OVERVIEW & FINANCIALS SUMMARY FINANCIALS 2015 Reported Revenues $1.7 BN 2015 Reported EBIT Margin (1) 7.1% HERITAGE BRANDS Underwear / Core Intimates Sportswear Dress Furnishings Swimwear CHAPS Geoffrey Beene Kenneth Cole Reaction LICENSED BRANDS INCLUDE: MICHAEL Michael Kors Michael Kors Collection Sean Jean (1) Excludes non-recurring and one-time items. Refer to Appendix for GAAP reconciliation of EBIT. 36

37 HERITAGE BRANDS CATEGORIES: STRONG MARKET SHARE POSITIONS CATEGORY Neckwear UNIT SHARE > 50% Dress Shirts Woven Shirts Knit Shirts Bras and Panties 40% 17% 12% 11% (1) (1) (1) (1) Men s Swim 8% (1) Casual Pants 7% (1) (1) Based on percentage of 2015 unit volume in US Department and Chain Stores combined. 37

38 HERITAGE BRANDS STRATEGIES Brand management: We are committed to designing and marketing quality, trend-right products that offer great value to our customers Leveraging and enhancing each division s positioning in the market: DRESS FURNISHINGS: Maintaining and expanding our positioning as we introduce innovation (Van Heusen Flex Collar shirt) and expand across channels SPORTSWEAR: Elevating our products through quality, detailing and fashion, while also expanding our distribution across our wholesale partners UNDERWEAR / CORE INTIMATES: Investing in our brand presentations at wholesale, and expanding our distribution, particularly within the mass channel SWIM: Continually innovating and extending our product offerings. We see a significant opportunity for Speedo in 2016 with the Summer Olympics Expanding distribution, particularly through wholesale expansion and e- commerce (third party) Growing internationally, including expansion within Europe, Asia Pacific, Latin America, Australia and New Zealand through licensed partners 38

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40 PVH FINANCIAL HISTORY ($ in Millions, except per share data) Warnaco Acquisition Revenues $5,891 $6,043 $8,216* $8,241 $8,020 Gross Margin 52.0%* 53.8% 52.4%* 52.6%* 51.6%* (52.7% Constant Currency) EBIT* $682 $752 $967 $921 $842 EBIT Margin* 11.6% 12.4% 11.8% 11.2% 10.5% (11.2% Constant Currency) EPS* $5.44 $6.58 $7.03 $7.30 $7.05 ($8.43 Constant Currency) EPS Growth* 26% 21% 7% 4% -3% (+15% Constant Currency) * Figures exclude non-recurring and one-time items. Refer to Appendix for GAAP reconciliations. 40

41 PVH CONSOLIDATED 2016 GUIDANCE SUMMARY 2016 YoY Change Revenues ~$8.1 BN +1% reported (+2% constant currency) Non-GAAP Earnings Per Share (EPS) $ $6.50 (1) (including ~$1.60 negative impact from foreign currency) +12% to +15% (excluding the negative impact from foreign currency) Guidance reflects the estimated impact of ~$1.60 per share attributable to foreign currency exchange rates due to the stronger U.S. dollar against other currencies in which we transact significant levels of business Approximately 85% of the impact is expected to be on a transactional basis (gross margin impact) Approximately 15% is expected to be due to currency translation The stronger U.S. dollar is also expected to continue to negatively impact Tommy Hilfiger and Calvin Klein U.S. stores located in international tourist locations, particularly in the first half of 2016 (1) Figures exclude non-recurring and one-time items. Refer to Appendix for GAAP reconciliation. 41

42 PVH FINANCIAL HISTORY FREE CASH FLOW ($ in millions) GROSS LEVERAGE RATIO* $700 $600 $500 $400 $300 $200 $100 $0 98% 77% $573 61% $469 $297 19% $ % 100% 80% 60% 40% 20% 0% x 2012 Pro Forma 3.3x 3.1x 3.0x Free Cash Flow Free Cash Flow / Non-GAAP Net Income* 2012 Pro Forma Debt paydown of ~$1.3 billion since the Warnaco acquisition NOTE: Free cash flow defined as cash flow from operations less capital expenditures, contingent payments to Mr. Klein and dividends. * Figures exclude non-recurring and one-time items. Refer to Appendix for GAAP reconciliations. 42

43 APPENDIX 43

44 GAAP to Non-GAAP Net Income Per Common Share Reconciliations ( ) GAAP to Non-GAAP Reconciliations Net Income (Loss) Per Common Share (Dollars and Shares in Millions, Except Per Share Data) Net Income (Loss) per Common Share Calculation GAAP Adjustments (1) Non-GAAP GAAP Adjustments (2) Non-GAAP GAAP Adjustments (3) Non-GAAP GAAP Adjustments (4) Non-GAAP Net Income $ $ 6.4 $ $ $ $ 58.6 $ (12.1) $ 70.7 $ 14.7 $ (35.8) $ 50.5 Preferred Stock Dividends on Converted Stock $ Inducement Payment and Offering Costs Net Income (Loss) Available to Common Stockholders $ $ (7.7) $ $ 87.6 $ 16.3 $ $ 58.6 $ (12.1) $ 70.7 $ (5.3) $ (35.8) $ 30.5 Total Shares for Diluted Net Income (Loss) per Common Share 53.5 (3.2) (3.3) (0.7) 31.0 Diluted Net Income (Loss) per Common Share $ 2.64 $ 2.62 $ 1.70 $ 1.88 $ 1.14 $ 1.37 $ (0.18) $ 0.98 (1) Adjustments for 2006 represent the elimination of (i) a pre-tax gain associated with the sale by our subsidiary on January 31, 2006 of minority interests in certain entities that operate various licensed Calvin Klein jeans and sportswear businesses in Europe and Asia; (ii) pre-tax costs resulting from the departure in February 2006 of our former chief executive officer; (iii) pre-tax costs associated with closing our apparel manufacturing facility in Ozark, Alabama in May 2006; (iv) the tax effects associated with these items; and (v) an inducement payment and offering costs incurred in connection with the voluntary conversion by the holders of our Series B convertible preferred stock of a portion of such stock into shares of common stock and the subsequent sale of a portion of such common shares by the holders. The inducement payment and offering costs resulted in a reduction of net income available to common stockholders for purposes of calculating diluted net income per common share. (2) Adjustments for 2005 represent the elimination of (i) an inducement payment and offering costs incurred in connection with the voluntary conversion by the holders of our Series B convertible preferred stock of a portion of such stock into shares of common stock and the subsequent sale of such common shares by the holders. The inducement payment and offering costs resulted in a reduction of net income available to common stockholders for purposes of calculating diluted net income per common share. (3) Adjustments for 2004 represent the elimination of (i) pre-tax charges related to debt extinguishment costs; (ii) pre-tax charges associated with the closing of certain outlet retail stores and exiting the wholesale footwear business and other related costs; (iii) a tax benefit associated with the realization of certain state net operating loss carryforwards; and (iv) the tax effects associated with these costs. (4) Adjustments for 2003 represent the elimination of (i) pre-tax charges related to integration costs associated with our acquisition of Calvin Klein; (ii) pre-tax charges associated with the impairment and closing of certain outlet retail stores and exiting the wholesale footwear business and other related costs; (iii) a pre-tax gain resulting from our sale of the minority interest in Gant Company AB; and (iv) the tax effects associated with these items. Calvin Klein integration costs consist of (a) the operating losses of certain Calvin Klein businesses, which we have closed or licensed, and associated costs in connection therewith and (b) the costs of certain duplicative personnel and facilities incurred during the integration of various logistical and back office functions. 44

45 GAAP to Non-GAAP Net Income Per Common Share Reconciliations ( ) GAAP to Non-GAAP Reconciliations Net Income Per Common Share (Dollars and Shares in Millions, Except Per Share Data) GAAP Adjustments (1) Non-GAAP GAAP Adjustments (2) Non-GAAP GAAP Adjustments (3) Non-GAAP Net Income per Common Share Calculation Net Income (Loss) $ 54.4 $ (236.0) $ $ $ 7.2 $ $ 39.1 $ (116.9) $ Total Shares for Diluted Net Income per Common Share Diluted Net Income per Common Share $ 0.81 $ 4.31 $ 2.92 $ 2.79 $ 0.75 $ 2.99 (1) Adjustments for the year ended January 30, 2011 represent the elimination of (i) the costs incurred in connection with our acquisition and integration of Tommy Hilfiger, including transaction, restructuring and debt extinguishment costs, short-lived non-cash valuation amortization charges and the effects of hedges against Euro to U.S. dollar exchange rates relating to the purchase price; (ii) the costs incurred in connection with our exit from the United Kingdom and Ireland Van Heusen dresswear and accessories business; (iii) the recognized actuarial loss on retirement plans; (iv) the tax effects associated with these costs; and (v) a tax benefit related to the lapse of the statute of limitations with respect to certain previously unrecognized tax positions. (2) Adjustments for the year ended January 31, 2010 represent the elimination of (i) the costs incurred in connection with our restructuring initiatives announced in the fourth quarter of 2008, including the shutdown of domestic production of machine-made neckwear, a realignment of our global sourcing organization, reductions in warehousing capacity and other initiatives to reduce corporate and administrative expenses; (ii) the recognized actuarial loss on retirement plans; (iii) the tax effects associated with these costs; and (iv) a net tax benefit related principally to the lapse of the statute of limitations with respect to certain previously unrecognized tax positions. (3) Adjustments for the year ended February 1, 2009 represent the elimination of (i) the costs incurred in connection with our restructuring initiatives announced in the fourth quarter of 2008, including the shutdown of domestic production of machine-made neckwear, a realignment of our global sourcing organization, reductions in warehousing capacity and other initiatives to reduce corporate and administrative expenses; (ii) fixed asset impairment charges for approximately 200 of our retail stores; (iii) the recognized actuarial loss on retirement plans; (iv) the operations of our Geoffrey Beene outlet retail division and the costs associated with the closing of such division; and (v) the tax effects associated with these costs. 45

46 GAAP to Non-GAAP Revenue and Gross Margin Reconciliations GAAP to Non-GAAP Reconciliations Revenue and Gross Margin (Dollars in Millions) 2014 (1) 2013 (2) 2011 (3) 2008 (4) 2003 (5) GAAP Revenue $ 8,241.2 $ 8,186.4 $ 5,890.6 $ 2,492.0 $ 1,569.0 Adjustments 30.0 (95.0) (21.0) Non-GAAP Revenue 8, , ,548.0 GAAP Gross Profit 4, , ,055.9 Adjustments Non-GAAP Gross Profit 4, , ,063.5 Non-GAAP Gross Margin 52.6% 52.4% 52.0% (1) Adjustments for 2014 represent the costs incurred in connection with the integration of Warnaco and the related restructuring and the exit of a discontinued product line in the Tommy Japan business. (2) Adjustments for 2013 represent the revenue reduction due to sales returns for certain Warnaco wholesale customers in connection with initiative to reduce excess inventory levels and the costs incurred in connection with the acquisition and integration of Warnaco and the related restructuring. (3) Adjustments for 2011 represent the costs incurred in connection with the integration of Tommy Hilfiger and the related restructuring. (4) Adjustments for 2008 represent the elimination of the operations of the Geoffrey Beene outlet retail division, which was closed. (5) Adjustments for 2003 represent the elimination of the operations of certain Calvin Klein businesses, which were closed or licensed. 46

47 GAAP to Non-GAAP Net Income Per Common Share Reconciliations ( ) GAAP to Non-GAAP Reconciliations Net Income Per Common Share (Dollars and Shares in Millions, Except Per Share Data) GAAP Adjustments (1) Non-GAAP GAAP Adjustments (2) Non-GAAP GAAP Adjustments (3) Non-GAAP Total Earnings Before Interest and Taxes $ $ (453.5) $ $ $ (91.2) $ $ $ (190.7) $ Net Income per Common Share Calculation Net Income Attributable to PVH Corp. $ $ (437.5) $ $ $ (52.6) $ $ $ (121.2) $ Total Shares for Diluted Net Income per Common Share Diluted Net Income per Common Share $ 1.74 $ 7.03 $ 5.87 $ 6.58 $ 3.78 $ 5.44 (1) Adjustments for 2013 represent the elimination of (i) the costs incurred in connection with our acquisition and integration of Warnaco and the related restructuring; (ii) the loss incurred in connection with the sale of substantially all of the assets of the Bass business, including related costs; (iii) the income due to the amendment of an unfavorable contract, which resulted in the reduction of a liability recorded at the time of the Tommy Hilfiger acquisition; (iv) the costs incurred in connection with our debt modification and extinguishment; (v) the interest expense incurred prior to the Warnaco acquisition closing date related to the $700 million of senior notes issued in 2012; (vi) the recognized actuarial gains on retirement plans; (vii) the tax effects associated with these items; (viii) non-recurring discrete tax items related to the Warnaco integration; and (ix) a non-recurring discrete tax item attributable to an increase in our previously-established liability for an uncertain tax position related to European and U.S. transfer pricing arrangements. (2) Adjustments for 2012 represent the elimination of (i) the costs incurred in connection with our integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with our acquisition of Warnaco; (iii) the interest expense incurred prior to the Warnaco acquisition closing date related to the $700 million of senior notes issued in 2012; (iv) the recognized actuarial losses on retirement plans; (v) the tax effects associated with these costs; and (vi) the tax benefit resulting from the recognition of previously unrecognized net operating loss assets and tax credits. (3) Adjustments for 2011 represent the elimination of (i) the costs incurred in connection with our integration of Tommy Hilfiger and the related restructuring; (ii) the expense incurred associated with settling the unfavorable preexisting license agreement in connection with our buyout of the Tommy Hilfiger perpetual license in India; (iii) the costs incurred in connection with our modification of our credit facility; (iv) the costs incurred in connection with our negotiated early termination of our license to market sportswear under the Timberland brand and the 2012 exit from the Izod women s wholesale sportswear business; (v) the recognized actuarial losses on retirement plans; (vi) the tax effects associated with these costs; and (vii) the tax benefit resulting from revaluing certain deferred tax liabilities due to a decrease in the statutory tax rate in Japan. 47

48 GAAP to Non-GAAP Gross Debt / Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Reconciliations (2012 Pro Forma) GAAP to Non-GAAP Reconciliations Gross Debt/Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Dollars in Billions, Except Ratios 2012 PF (1) GAAP EBIT (2) $ 0.7 Pre-tax Non-recurring and One-time items (3) 0.3 EBIT excluding Non-recurring and One-time Items and Run-rate Synergies 1 Run-rate Synergies (4) 0.1 EBIT excluding Non-recurring and One-time Items 1.1 GAAP Depreciation and Amortization 0.1 EBIT excluding Non-recurring and One-time Items and Depreciation and Amortization $ 1.3 Total Debt $ 4.5 Gross Leverage Ratio 3.5 (1) Combined pro forma assumes the Warnaco acquisition was completed on the first day of PVH's 2012 fiscal year. (2) Amount includes assumed reduction in earnings due to the loss of the Chaps license. (3) Adjustments represent the elimination of one-time integration/transaction costs, restructuring costs and other items in (4) Reflects annual run rate synergies. 48

49 GAAP to Non-GAAP Gross Debt/Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Reconciliations GAAP to Non-GAAP Reconciliations Gross Debt/Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Dollars in Millions, Except Ratios 2013 (3) 2014 (2) 2015 (1) GAAP Net Income $ 144 $ 439 $ 572 Pre-Tax Non-recurring and One-time Items GAAP Interest and Taxes GAAP Depreciation and Amortization Interest Included in Non-recurring and One-time Items (1) - - Depreciation and Amortization Included in Non-recurring and One-time Items (83) (6) (6) Non-GAAP EBITDA as presented $ 1,198 $ 1,160 $ 1,092 Debt, Including Current Portion and Short-term Borrowings $ 3,970 $ 3,547 $ 3,217 Capital Lease Obligations Total Debt $ 3,995 $ 3,565 $ 3,232 Gross Leverage Ratio (1) Non-recurring and one-time items for 2015 represent (i) the costs incurred in connection with our integration of Warnaco and the related restructuring; (ii) the costs incurred in connection with the operation of and exit from the Izod retail business; (iii) the costs incurred principally in connection with the discontinuation of several licensed product lines in the Heritage Brands dress furnishings business; (iv) the costs incurred in connection with licensing to G-III the Tommy Hilfiger womenswear wholesale business in the U.S. and Canada; (v) the gain recorded on the equity investment in Karl Lagerfeld; and (vi) the recognized actuarial gain on retirement plans. (2) Non-recurring and one-time items for 2014 represent (i) the costs incurred in connection with our integration of Warnaco and the related restructuring; (ii) the costs incurred in connection with our exit from the Izod retail business, including noncash impairment charges; (iii) the costs incurred in connection with our exit from a discontinued product line in the Tommy Hilfiger Japan business; (iv) the impairment of certain Tommy Hilfiger stores in North America; (v) the costs incurred related to the sale of the Bass business; (vi) the costs incurred in connection with the amendment and restatement of our credit facility and the related redemption of its 7 3/8% senior notes due 2020; (vii) the net gain on the deconsolidation of certain Calvin Klein subsidiaries in Australia and New Zealand and the previously consolidated Calvin Klein joint venture in India; and (viii) the recognized actuarial loss on retirement plans. (3) Non-recurring and one-time items for 2013 represent (i) the costs incurred in connection with our acquisition and integration of Warnaco and the related restructuring; (ii) the loss incurred in connection with the sale of substantially all of the assets of our Bass business, including related costs; (iii) the income recorded due to the amendment of an unfavorable contract, which resulted in the reduction of a liability recorded at the time of the Tommy Hilfiger acquisition; (iv) the costs incurred in connection with our debt modification and extinguishment; (v) the interest expense incurred prior to the Warnaco acquisition closing date related to the $700 of senior notes issued in 2012; and (vi) the recognized actuarial gain on retirement plans. 49

50 GAAP to Non-GAAP Net Income per Common Share Reconciliations ( ) GAAP to Non-GAAP Reconciliations Net Income Per Common Share (Dollars and Shares in Millions, Except Per Share Data) GAAP Adjustments (1) Non-GAAP Impact of Foreign Currency Constant Currency GAAP Adjustments (2) Non-GAAP Revenue Calvin Klein $ 2, $ 2,922.6 $ (199.4) $ 3,122.0 Tommy Hilfiger 3, ,369.5 (340.9) 3,710.4 Total Revenue 8, ,020.3 (555.2) 8,575.5 Total gross profit $ 4,161.6 $ 19.5 $ 4,142.1 $ (380.8) $ 4,522.9 Earnings Before Interest and Taxes Calvin Klein $ $ (21.2) $ $ (41.9) $ $ $ (57.1) $ Tommy Hilfiger (3.2) (74.7) (5.3) Heritage Brands 87.0 (34.9) (39.7) Corporate (138.1) (21.7) (116.4) (390.3) (288.6) (101.7) Total Earnings Before Interest and Taxes (81.0) (121.5) (390.7) Net Income per Common Share Calculation Net Income Attributable to PVH Corp. $ $ (13.3) $ $ $ (168.8) $ Total Shares for Diluted Net Income per Common Share Diluted Net Income per Common Share $ 6.89 $ 7.05 $ 5.27 $ 7.30 $ (1.38) $ 8.43 YoY Non-GAAP EPS Change Excluding Negative Impact Primarily Related to Foreign Currency -3% 15% (1) Represents the impact for the year ended January 31, 2016 from the elimination of (i) the costs incurred in connection with our integration of Warnaco and the related restructuring; (ii) the costs incurred in connection with the operation of and exit from the Izod retail business; (iii) the costs incurred principally in connection with the discontinuation of several licensed product lines in the Heritage Brands dress furnishings business; (iv) the costs incurred in connection with licensing to G-III the Tommy Hilfiger womenswear wholesale business in the U.S. and Canada; (v) the gain recorded on the equity investment in Karl Lagerfeld; (vi) the recognized actuarial gain on retirement plans; (vii) the tax effects associated with the foregoing items; and (viii) the tax benefits associated with non-recurring discrete items primarily related to the resolution of uncertain tax positions and the impact of recently enacted tax law and tax rate changes on deferred taxes. (2) Represents the impact for the year ended February 1, 2015 from the elimination of (i) the costs incurred in connection with our integration of Warnaco and the related restructuring; (ii) the costs incurred in connection with our exit from the Izod retail business, including noncash impairment charges; (iii) the costs incurred in connection with our exit from a discontinued product line in the Tommy Hilfiger Japan business; (iv) the impairment of certain Tommy Hilfiger stores in North America; (v) the costs incurred related to the sale of the Bass business; (vi) the costs incurred in connection with the amendment and restatement of our credit facility and the related redemption of its 7 3/8% senior notes due 2020; (vii) the net gain on the deconsolidation of certain Calvin Klein subsidiaries in Australia and New Zealand and the previously consolidated Calvin Klein joint venture in India; (viii) the recognized actuarial loss on retirement plans; (ix) the tax effects associated with the foregoing items; and (x) the tax benefits associated with non-recurring discrete items primarily related to the resolution of uncertain tax positions and various Warnaco integration activities. 50

51 GAAP to Non-GAAP Net Income per Common Share Reconciliation (2016) GAAP to Non-GAAP Reconciliation Net Income Per Common Share Full Year 2016 (Estimated) GAAP net income per common share attributable to PVH Corp. $ $6.25 Estimated per common share impact of items identified as non-gaap exclusions (1) ($0.25) Net income per common share attributable to PVH Corp. excluding impact of items identified as non-gaap exclusions $ $6.50 (1) Items identified as non-gaap exclusions include (a) the costs expected to be incurred in connection with its integration of Warnaco and the related restructuring; (b) the costs expected to be incurred in connection with the discontinuation of several licensed product lines in its Heritage Brands dress furnishings business; (c) the costs expected to be incurred in connection with licensing to G-III its Tommy Hilfiger womenswear wholesale business in the U.S. and Canada; and (d) the estimated tax effects associated with these costs. NOTE: The GAAP net income per common share amounts presented in the above table are being provided solely to comply with applicable SEC rules and are not, and should not be construed to be, guidance for the Company s 2016 fiscal year. The Company s net income per common share, as well as the amounts excluded in providing non-gaap earnings guidance, would be expected to change as a result of acquisition, restructuring, divestment or similar transactions or activities, the timing and strategy of restructuring and integration initiatives or other one-time events, if any, that the Company engages in or suffers during the period or any market or other changes affecting the Company s expected actuarial gain or loss on retirement plans. Other than the Company s announcements on February 2, 2016 that it has entered into a definitive agreement to acquire the 55% interest in TH Asia Ltd., its joint venture for Tommy Hilfiger in China, that it does not already own, and on February 1, 2016 that it is licensing to G-III the Tommy Hilfiger womenswear wholesale business in the U.S. and Canada, which will result in the discontinuation of the Company s directly operated Tommy Hilfiger North America womenswear wholesale business in the fourth quarter of 2016, the Company has no current understanding or agreement regarding any such transaction or definitive plans regarding any such activity that has not been announced or completed. 51