(Mark One) | ||
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the fiscal year ended | February | |
OR | ||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the transition period from _________ to ___________ | ||
Commission File Number | 001-07572 |
PVH CORP. |
Delaware | 13-1166910 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
200 Madison Avenue, | New York, | New York | 10016 | |
(Address of principal executive offices) | (Zip Code) |
(212) 381-3500 (Registrant’s telephone number, including area code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
Common Stock, $1.00 par value | PVH | New York Stock Exchange |
Large Accelerated Filer | x | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | ☐ |
Emerging growth company | ☐ |
Document | Location in Form 10-K in which incorporated | |
Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on June | Part III |
PART I | ||
Item 1. | Business | |
Item 1A. | Risk Factors | |
Item 1B. | Unresolved Staff Comments | |
Item 2. | Properties | |
Item 3. | Legal Proceedings | |
Item 4. | Mine Safety Disclosures | |
PART II | ||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
Item 6. | Selected Financial Data | |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 8. | Financial Statements and Supplementary Data | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |
Item 9A. | Controls and Procedures | |
Item 9B. | Other Information | |
PART III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | |
Item 11. | Executive Compensation | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |
Item 14. | Principal Accounting Fees and Services | |
PART IV | ||
Item 15. | Exhibits, Financial Statement Schedules | |
Item 16. | Form 10-K Summary | |
Signatures | ||
Index to Financial Statements and Financial Statement Schedule |
• | HILFIGER COLLECTION — the pinnacle of the TOMMY HILFIGER product offerings, HILFIGER COLLECTION blends the brand’s Americana heritage with contemporary influences and a playful fashion edge. The collection targets 25 to 40 year-old consumers. HILFIGER COLLECTION is available globally at select TOMMY HILFIGER stores, through our wholesale partners (in stores and online) and on tommy.com. |
• | TOMMY HILFIGER TAILORED — this line integrates sharp, sophisticated style with the TOMMY HILFIGER brand’s American menswear heritage. From structured suiting to casual weekend wear, classics are modernized with precision fit, premium fabrics, updated cuts, rich colors and luxe details, executed with the TOMMY HILFIGER brand’s signature twist. The collection targets 25 to 40 year-old consumers. TOMMY HILFIGER TAILORED is available globally at select TOMMY HILFIGER stores, through our wholesale partners (in stores and online) and on tommy.com. |
• | TOMMY HILFIGER — our core line is globally recognized for bringing to life the classic American cool spirit at the heart of the brand. The collection focuses on 25 to 40 year-old consumers with a broad selection of designs across more than 25 categories, including men’s, women’s and children’s sportswear, footwear and accessories. TOMMY HILFIGER is available globally in our TOMMY HILFIGER stores, through our wholesale partners (in stores and online), through pure play digital commerce retailers and on tommy.com. |
• | TOMMY JEANS — inspired by American denim classics with a modern, casual edge, TOMMY JEANS adds a youthful energy and irreverent twist to the TOMMY HILFIGER brand’s heritage. The men’s and women’s collections focus on premium denim and target 18 to 30 year-old consumers. TOMMY JEANS is available globally at select TOMMY HILFIGER stores, TOMMY JEANS stores, through our wholesale partners (in stores and online), through pure play digital commerce retailers and on tommy.com. |
• | TOMMY SPORT— this line is engineered for performance and infused with the brand’s bold red, white and blue heritage. Silhouettes evoke the classic American cool spirit of the TOMMY HILFIGER brand with unique details and functional features. TOMMY SPORT is available globally at select TOMMY HILFIGER stores, through select wholesale partners (in stores and online), through pure play digital commerce retailers and on tommy.com. |
• | Wholesale — principally consists of the distribution and sale of products in North America, Europe and the Asia-Pacific region under the TOMMY HILFIGER brands. In North America, distribution is primarily through department stores, warehouse clubs, and off-price and independent retailers, as well as digital commerce sites operated by the department store customers and pure play digital commerce retailers. In Europe and the Asia-Pacific region, distribution is through department and specialty stores, and digital commerce sites operated by department store customers and pure play digital commerce retailers, as well as through distributors and franchisees. |
• | Retail — principally consists of the distribution and sale of products under the TOMMY HILFIGER brands in our stores in North America, Europe and the Asia-Pacific region, as well as on the tommy.com sites we operate in over 30 countries. Our stores in North America are primarily located in premium outlet centers. In Europe and the Asia-Pacific region, we operate full-price specialty and outlet stores, as well as select flagship stores and concession locations. |
• | Licensing — we license the TOMMY HILFIGER brands to third parties globally for a broad range of products through approximately 25 license agreements. We provide support to our licensees and seek to preserve the integrity of our brands by taking an active role in the design, quality control, advertising, marketing and distribution of each licensed product, most of which are subject to our prior approval and continuing oversight. The arrangements generally are exclusive to a territory or product category. Territorial licensees include our joint ventures in Brazil, India and Mexico. |
Licensee | Product Category and Territory | |
American Sportswear S.A. | Men’s, women’s and children’s apparel, footwear and accessories (Central America, South America (excluding Brazil) and the Caribbean) | |
F&T Apparel LLC & KHQ Investment LLC | Children’s apparel, children’s underwear and sleepwear and boy’s tailored clothing (United States and Canada) | |
G-III | Men’s and women’s outerwear, luggage and women’s apparel, dresses, suits and swimwear (excluding intimates, sleepwear, loungewear, hats, scarves, gloves and footwear) (United States and Canada) | |
Handsome Corporation | Men’s, women’s and children’s apparel, sportswear, socks and accessories and men’s and women’s outerwear (South Korea) | |
MBF Holdings LLC | Men’s and women’s footwear (United States and Canada) | |
Movado Group, Inc. & Swissam Products, Ltd. | Men’s and women’s watches and jewelry (worldwide, excluding Japan (except certain customers)) | |
Peerless Clothing International, Inc. | Men’s tailored clothing (United States and Canada) | |
Safilo Group S.P.A. | Men’s, women’s and children’s eyeglasses and non-ophthalmic sunglasses (worldwide, excluding India) |
• | CK CALVIN KLEIN — our “contemporary” brand, offering modern, sophisticated items including apparel and accessories. Distribution is in the Asia-Pacific region through select CALVIN KLEIN stores, selectwholesale partners (in stores and online) and calvinklein.com. |
• | CALVIN KLEIN — our “master” brand, offering men’s and women’s sportswear, swimwear, outerwear, fragrance, accessories, footwear, men’s dress furnishings, women’s dresses, suits and handbags, and items for the home. Distribution is primarily in North America, Europe and the Asia-Pacific region through our own stores, our wholesale partners (in stores and online), pure play digital commerce retailers and on calvinklein.com. |
• | CALVIN KLEIN JEANS — the casual expression of the CALVIN KLEIN brand with roots in denim, offering men’s and women’s jeanswear, related apparel and accessories. CALVIN KLEIN JEANS is known for its unique details and innovative washes. Distribution is worldwide through our own stores, our wholesale partners (in stores and online), pure play digital commerce retailers and on calvinklein.com. |
• | CALVIN KLEIN UNDERWEAR — known across the globe for provocative, cutting-edge products and marketing campaigns and consistently delivering innovative designs with superior fit and quality. Offerings include men’s and women’s underwear, women’s intimates, sleepwear and loungewear. Distribution is worldwide throughour own stores, our wholesale partners (in stores and online), pure play digital commerce retailers and on calvinklein.com. |
• | CALVIN KLEIN PERFORMANCE — built on the foundation of innovation, fit and function. Designs are fashion-inspired and feature trend-driven, modern pieces that unite innovative fabric technology with classic American design elements. Distribution is primarily in North America, Europe and the Asia-Pacific region through our own stores, our wholesale partners (in stores and online), pure play digital commerce retailers and on calvinklein.com. |
• | Wholesale — principally consists of the distribution and sale of products in North America, Europe, the Asia-Pacific region and Brazil under the CALVIN KLEIN brands. In North America, distribution is primarily through warehouse clubs, department and specialty stores, and off-price and independent retailers, as well as digital commerce sites operated by department store customers and pure play digital commerce retailers. In Europe, the Asia-Pacific region and Brazil, distribution is through department and specialty stores, and digital commerce sites operated by department store customers and pure play digital commerce retailers, as well as through distributors and franchisees. |
• | Retail — principally consists of the distribution and sale of apparel, accessories and related products under the CALVIN KLEIN brands in our stores in North America, Europe, the Asia-Pacific region and Brazil, as well as on the calvinklein.com sites we operate in over 35 countries. Our stores in North America are primarily located in premium outlet centers. In Europe, the Asia-Pacific region and Brazil, we operate full-price and outlet stores and concession locations. |
• | Licensing — we license the CALVIN KLEIN brands throughout the world in connection with a broad array of product categories. In these arrangements, Calvin Klein combines its design, marketing and branding skills with the specific manufacturing, distribution and geographic capabilities of its partners to develop, market and distribute these goods, most of which are subject to our prior approval and continuing oversight. Calvin Klein has approximately 45 licensing and other arrangements across the CALVIN KLEIN brands. The arrangements generally are exclusive to a territory or product category. Territorial licensees include our joint ventures in India and Mexico. |
Licensee | Product Category and Territory | |
CK21 Holdings Pte. Ltd. | Men’s and women’s CK CALVIN KLEIN apparel (Asia, excluding Japan) | |
CK Watch & Jewelry Co., Ltd. (Swatch SA) | Men’s and women’s watches and jewelry (worldwide) * | |
Coty Inc. | Men’s and women’s fragrance, bath products and color cosmetics (worldwide) | |
Soft home bed and bath furnishings (United States, Canada, Mexico, Europe, Middle East, Asia and India) | ||
G-III | Women’s coats, suits, dresses, sportswear, jeanswear, active performancewear, handbags and small leather goods, men’s coats, men’s and women’s luggage and men’s and women’s swimwear (United States and Canada | |
Jimlar Corporation | Men’s and women’s footwear (various jurisdictions) * | |
Marchon Eyewear, Inc. | Men’s and women’s optical frames and sunglasses (worldwide) | |
Onward Kashiyama Co. Ltd. | Men’s and women’s CK CALVIN KLEIN apparel (Japan) | |
Peerless Clothing International Inc. | Men’s tailored clothing (United States, Canada and Mexico) |
• | Men’s dress shirts and neckwear under brands including Van Heusen, IZOD, ARROW, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, Unlisted, a Kenneth Cole Production, MICHAEL Michael Kors, Michael Kors Collection and DKNY. We also market dress shirts under the Chaps brand, among others. We offer private label dress shirt and neckwear programs to retailers, primarily national department stores and mass market retailers. We believe our product offerings collectively represent a sizeable portion of the domestic dress furnishings market. |
Brand Name | Expiration | |
MICHAEL Michael Kors and Michael Kors Collection | Michael Kors, LLC and Michael Kors (Switzerland) International GmbH | January 31, 2022 |
DKNY | Donna Karan Studio LLC | Terminated on December 31, |
Kenneth Cole New York, Kenneth Cole Reaction and Unlisted, a Kenneth Cole Production | Kenneth Cole Productions (Lic), LLC and Kenneth Cole Productions, Inc. | December 31, 2022, with a right of renewal (subject to certain conditions) through December 31, 2025 |
Chaps | The Polo/Lauren Company, LP and PRL USA, Inc. | March 31, |
• | Men’s sportswear, including sport shirts, sweaters, bottoms and outerwear, principally under the Van Heusen, IZOD and ARROW brands. IZOD and Van Heusen were the first and second best selling national brand men’s woven sport shirts, respectively, in United States department and chain stores in 2019. We also produced men’s sportswear under a license agreement for the DKNY brand as noted in the table above. |
• | Men’s, women’s and children’s swimwear, pool and deck footwear, and swim-related products and accessories under the Speedo trademark. The Speedo brand is exclusively licensed to us for North America and the Caribbean in perpetuity from Speedo International Limited. We will no longer license the Speedo trademark in conjunction with the Speedo transaction, which is expected to close in the first quarter of 2020, subject to customary closing conditions. |
• | Women’s intimate apparel under the Warner’s and Olga brands and intimate apparel under the True&Co. brand.Warner’s was the fourth best selling brand for bras and panties in United States department and chain stores in 2019. True&Co. is primarily distributed in the United States through our TrueAndCo.com digital commerce site, and, to a lesser extent, through a department store and a mass market retailer. |
Licensee | Product Category and Territory | |
Arvind Fashions Limited | ARROW men’s and women’s dresswear, sportswear and accessories (India, Middle East, | |
Basic Resources, Inc. | Van Heusen and IZOD men’s and boys’ knit and woven | |
Five Star Blue, LLC | IZOD men’s denim, twill pants and shorts (United States, Canada and Mexico) | |
F&T Apparel LLC | Van Heusen and ARROW boys’ dress furnishings and sportswear; IZOD boys’ sportswear; IZOD and ARROW boys’ andgirls’ school uniforms; ARROW men’s tailored clothing; IZOD boys’ tailored clothing (United States and Canada) | |
I.C.C. International Public Company | ARROW men’s dress furnishings, tailored clothing, sportswear and accessories; ARROW women’s dresswear and sportswear (Thailand, Myanmar, Laos, Cambodia and Vietnam) | |
Peerless | Van Heusen and IZOD men’s tailored clothing (United States, Canada and Mexico) | |
IZODmen’s, women’s |
◦ | Leveraging data driven marketing to deepen the relationships with our consumers through segmented product assortments and personalized content. |
◦ | Evolving our supply chain to adapt more quickly to change and reduce lead times. |
• | Delivering compelling products that reflect TOMMY HILFIGER’s accessible premium positioning and classic American cool aesthetic, with a focus on sustainability and social innovation. |
• | Delivering compelling products that reflect CALVIN KLEIN’s accessible premium positioning and seductive aesthetic, with a focus on sustainable product creation. |
• | Improve lives across our value chain — Our ambition is to improve the lives of the over one million people across our value chain, focusing on education and opportunities for women and children, ensuring access to clean water, investing in health and education initiatives, and continuing to champion inclusion and diversity. |
Name | Age | Position | |||
Emanuel Chirico | Chairman and Chief Executive Officer | ||||
Stefan Larsson | 45 | President | |||
Michael A. Shaffer | Executive Vice President and Chief Operating & Financial Officer | ||||
Francis K. Duane | Vice Chairman and Chief Executive Officer, Heritage Brands | ||||
Daniel Grieder | Chief Executive Officer, Tommy Hilfiger Global and PVH Europe | ||||
Chief Executive Officer, Calvin Klein | |||||
Mark D. Fischer | Executive Vice President, General Counsel & Secretary | ||||
David F. Kozel | Executive Vice President, Chief Human Resources Officer |
• | continue to maintain and enhance the distinctive brand identities of the TOMMY HILFIGER and CALVIN KLEIN brands; |
• | continue to enter into new, or renew or extend existing, licensing agreements for the TOMMY HILFIGER and CALVIN KLEIN brands; and |
Location | Use | Ownership Status | Approximate Area in Square Feet | |||
New York, New York | Corporate and Heritage Brands administrative offices and showrooms | Leased | 209,000 | |||
New York, New York | Calvin Klein administrative offices and showrooms | Leased | ||||
New York, New York | Tommy Hilfiger administrative offices and showrooms | Leased | ||||
Bridgewater, New Jersey | Corporate and retail administrative offices | Leased | 285,000 | |||
Banksmeadow, Australia | Tommy Hilfiger, Calvin Klein and Heritage Brands administrative offices, showrooms, warehouse and distribution center | Leased | 243,000 | (1) | ||
Milperra, Australia | Warehouse and distribution center | Leased | 86,000 | (1) | ||
Amsterdam, The Netherlands | Tommy Hilfiger and Calvin Klein administrative offices, warehouse and showrooms | Leased | 499,000 | |||
Venlo/Oud Gastel, The Netherlands | Warehouse and distribution centers | Leased | 2,051,000 | |||
McDonough, Georgia | Warehouse and distribution center | Leased | 851,000 | |||
Palmetto, Georgia | Warehouse and distribution center | Leased | 983,000 | |||
Jonesville, North Carolina | Warehouse and distribution center | Owned | 778,000 | |||
Montreal, Canada | Administrative offices, warehouse and distribution center | Leased | 183,000 | |||
Hong Kong SAR, China | Corporate, Tommy Hilfiger and Calvin Klein administrative offices | Leased | ||||
Hawassa, Ethiopia | Manufacturing facility | Leased | 155,000 | |||
Dusseldorf, Germany | Tommy Hilfiger and Calvin Klein administrative offices and showrooms | Leased | 91,000 | |||
Cypress, California | Speedo administrative offices | Leased | 69,000 | |||
Shanghai, China | Tommy Hilfiger and Calvin Klein administrative offices | Leased |
(1) | We occupy properties in Australia since May 2019 in connection with the Australia acquisition. |
(2) | Our Speedo administrative offices in Cypress, California will no longer be occupied by us following the pending sale of our Speedo North America business to Pentland, which is expected to close in the first quarter of 2020, subject to customary conditions. Please see Note 4, “Assets Held For Sale,” in the Notes to Consolidated Financial Statements included in Item 8 of this report for further discussion. |
Period | (a) Total Number of Shares (or Units) Purchased(1)(2) | (b) Average Price Paid per Share (or Unit)(1)(2) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(1) | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||
November 5, 2018 - | ||||||||||||||
December 2, 2018 | 158,007 | $ | 116.13 | 157,695 | $ | 292,665,255 | ||||||||
December 3, 2018 - | ||||||||||||||
January 6, 2019 | 240,657 | 95.72 | 240,352 | 269,662,940 | ||||||||||
January 7, 2019 - | ||||||||||||||
February 3, 2019 | 110,154 | 103.76 | 110,000 | 258,257,007 | ||||||||||
Total | 508,818 | $ | 103.80 | 508,047 | $ | 258,257,007 |
Period | (a) Total Number of Shares (or Units) Purchased(1)(2) | (b) Average Price Paid per Share (or Unit)(1)(2) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(1) | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||
November 4, 2019 - | ||||||||||||||
December 1, 2019 | 333,392 | $ | 97.47 | 332,451 | $ | 752,514,829 | ||||||||
December 2, 2019 - | ||||||||||||||
January 5, 2020 | 381,889 | 102.92 | 381,441 | 713,255,373 | ||||||||||
January 6, 2020 - | ||||||||||||||
February 2, 2020 | 307,761 | 98.67 | 304,259 | 683,257,019 | ||||||||||
Total | 1,023,042 | $ | 99.87 | 1,018,151 | $ | 683,257,019 |
(1) |
(2) | Our 2006 Stock Incentive Plan provides us with the right to deduct or withhold, or require employees to remit to us, an amount sufficient to satisfy any applicable tax withholding requirements applicable to stock-based compensation awards. To the extent permitted, employees may elect to satisfy all or part of such withholding requirements by tendering previously owned shares or by having us withhold shares having a fair market value equal to the minimum statutory tax withholding rate that could be imposed on the transaction. Included in this table are shares withheld during the fourth quarter of |
Value of $100.00 invested after 5 years: | ||||||
Our Common Stock | $ | 90.62 | $ | 79.62 | ||
S&P 500 Index | $ | 168.36 | $ | 179.17 | ||
S&P 500 Apparel, Accessories & Luxury Goods Index | $ | 88.04 | $ | 78.24 |
• | We entered into a definitive agreement on January 9, 2020 to sell our Speedo North America business to Pentland for $170 million in cash, subject to a working capital adjustment, as described above. We recorded a pre-tax noncash loss of $142 million in the fourth quarter of 2019 related to the Speedo transaction and expected deconsolidation of the net assets of the business, consisting of (i) a noncash impairment of our perpetual license right for the Speedo trademark and (ii) a noncash loss to reduce the carrying value of the business to its estimated fair value, less costs to sell. |
• | We entered into agreements on July 3, 2019 to terminate early the licenses for the global Calvin Klein and Tommy Hilfiger North America socks and hosiery businesses in order to consolidate the socks and hosiery businesses for all of our brands in the United States and Canada in a newly formed joint venture, PVH Legwear, in which we own a 49% economic interest, and to bring in-house the international Calvin Klein socks and hosiery wholesale businesses. PVH Legwear was formed with a wholly owned subsidiary of our former Heritage Brands socks and hosiery licensee, and licenses from us the rights to distribute and sell TOMMY HILFIGER, CALVIN KLEIN, IZOD, Van Heusen and Warner’s socks and hosiery beginning in December 2019. We recorded a pre-tax charge of $60 million during 2019 in connection with these agreements. |
• | We completed the Australia and TH CSAP acquisitions in the second quarter of 2019. The Australia acquisition closed on May 31, 2019. Prior to the closing, we, along with Gazal, jointly owned and managed a joint venture, PVH Australia, which licensed and operated businesses under the TOMMY HILFIGER, CALVIN KLEIN and Van Heusen brands, along with other owned and licensed brands. PVH Australia came under our full control as a result of the Australia acquisition and we now operate directly those businesses. The aggregate net purchase price for the shares acquired was $59 million, net of cash acquired and after taking into account the proceeds from the divestiture to a third party of an office building and warehouse owned by Gazal in June 2019. We completed the TH CSAP acquisition on July 1, 2019 for $74 million, as a result of which we now operate directly the Tommy Hilfiger retail business in the Central and Southeast Asia market. Please see Note 3, “Acquisitions,” in the Notes to Consolidated Financial Statements included in Item 8 of this report for further discussion. |
• | We entered into a licensing agreement on May 30, 2019 with G-III for the design, production and wholesale distribution of CALVIN KLEIN JEANS women’s jeanswear collections in the United States and Canada, which resulted in the discontinuation of our directly operated Calvin Klein North America women’s jeanswear wholesale business in 2019. |
• | We closed our TOMMY HILFIGER flagship and anchor stores in the United States (the “TH U.S. store closures”)in the first quarter of 2019 and recorded pre-tax costs of $55 million, primarily consisting of noncash lease asset impairments. Please see Note 12, “Fair Value Measurements,” in the Notes to Consolidated Financial Statements included in Item 8 of this report for further discussion of the noncash lease asset impairments. |
• | We announced on January 10, 2019 a restructuring in connection with strategic changes for ourCalvin Klein business (the “Calvin Klein restructuring”). The strategic changes included (i) the closure of the CALVIN KLEIN 205 W39 NYC brand (formerly Calvin Klein Collection), (ii) the closure of the flagship store on Madison Avenue in New York, New |
• | We acquired on April 20, 2018 the Geoffrey Beene tradename from Geoffrey Beene for $17 million, of which $16 million was paid in cash. Prior to the acquisition, we had licensed the rights to design, market and distribute Geoffrey Beene dress shirts and neckwear from Geoffrey Beene. |
• | We acquired on April 13, 2016 the 55% ownership interests in our former joint venture for TOMMY HILFIGER in China that we did not already own (the “TH China acquisition”). As a result of the TH China acquisition, we now operate directly our Tommy Hilfiger business in this market. We recorded pre-tax charges of $24 million and $27 million in 2018 and 2017, respectively, primarily consisting of noncash amortization of short-lived assets. |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||
Net sales | $ | 9,154 | $ | 8,439 | $ | 7,791 | $ | 9,400 | $ | 9,154 | $ | 8,439 | ||||||||||
Royalty revenue | 376 | 366 | 321 | 380 | 376 | 366 | ||||||||||||||||
Advertising and other revenue | 127 | 109 | 91 | 129 | 127 | 109 | ||||||||||||||||
Total revenue | 9,657 | 8,915 | 8,203 | 9,909 | 9,657 | 8,915 | ||||||||||||||||
Gross profit | 5,308 | 4,894 | 4,370 | 5,388 | 5,308 | 4,894 | ||||||||||||||||
% of total revenue | 55.0 | % | 54.9 | % | 53.3 | % | 54.4 | % | 55.0 | % | 54.9 | % | ||||||||||
SG&A | 4,433 | 4,245 | 3,678 | 4,715 | 4,433 | 4,245 | ||||||||||||||||
% of total revenue | 45.9 | % | 47.6 | % | 44.8 | % | 47.6 | % | 45.9 | % | 47.6 | % | ||||||||||
Non-service related pension and postretirement cost (income) | 5 | 3 | (41 | ) | ||||||||||||||||||
Non-service related pension and postretirement cost | 90 | 5 | 3 | |||||||||||||||||||
Debt modification and extinguishment costs | — | 24 | 16 | 5 | — | 24 | ||||||||||||||||
Other noncash gain, net | — | — | 71 | |||||||||||||||||||
Other noncash loss, net | 29 | — | — | |||||||||||||||||||
Equity in net income of unconsolidated affiliates | 21 | 10 | 0 | 10 | 21 | 10 | ||||||||||||||||
Income before interest and taxes | 892 | 632 | 789 | 559 | 892 | 632 | ||||||||||||||||
Interest expense | 121 | 128 | 121 | 120 | 121 | 128 | ||||||||||||||||
Interest income | 5 | 6 | 6 | 5 | 5 | 6 | ||||||||||||||||
Income before taxes | 776 | 510 | 674 | 444 | 776 | 510 | ||||||||||||||||
Income tax expense (benefit) | 31 | (26 | ) | 125 | 29 | 31 | (26 | ) | ||||||||||||||
Net income | 745 | 536 | 549 | 415 | 745 | 536 | ||||||||||||||||
Less: Net loss attributable to redeemable non-controlling interest | (2 | ) | (2 | ) | 0 | (2 | ) | (2 | ) | (2 | ) | |||||||||||
Net income attributable to PVH Corp. | $ | 746 | $ | 538 | $ | 549 | $ | 417 | $ | 746 | $ | 538 |
• | The net addition of an aggregate $367 million of revenue, or an 8% increase over the prior year, attributable to our Tommy Hilfiger International and Tommy Hilfiger North America segments, which included a negative impact of $129 million, or 3%, related to foreign currency translation. Tommy Hilfiger International segment revenue increased 15% (including a 5% negative foreign currency impact), driven principally by outperformance in Europe and the addition of revenue resulting from the Australia and TH CSAP acquisitions. Tommy Hilfiger International comparable store sales increased 9%, including a benefit of 4% from sales on our digital commerce sites. Revenue in our Tommy Hilfiger North America segment decreased 1%, as growth in the North America wholesale business was more than offset by a 6% decline in Tommy Hilfiger North America comparable store sales due to weakness in traffic and consumer spending trends, especially in stores located in international tourist locations. |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||
Components of revenue: | ||||||||||||||||
Net sales | 94.8 | % | 94.7 | % | 95.0 | % | 94.9 | % | 94.8 | % | 94.7 | % | ||||
Royalty, advertising and other revenue | 5.2 | 5.3 | 5.0 | 5.1 | 5.2 | 5.3 | ||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
Gross margin | 55.0 | % | 54.9 | % | 53.3 | % | 54.4 | % | 55.0 | % | 54.9 | % |
2019 | 2018 | 2017 | |||||||||
(In millions) | |||||||||||
SG&A expenses | $ | 4,715 | $ | 4,433 | $ | 4,245 | |||||
% of total revenue | 47.6 | % | 45.9 | % | 47.6 | % |
2018 | 2017 | 2016 | |||||||||
(Dollars in millions) | |||||||||||
SG&A expenses | $ | 4,433 | $ | 4,245 | $ | 3,678 | |||||
% of total revenue | 45.9 | % | 47.6 | % | 44.8 | % |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||
Income tax expense (benefit) | $ | 31 | $ | (26 | ) | $ | 125 | $ | 29 | $ | 31 | $ | (26 | ) | ||||||||
Income tax expense (benefit) as a % of pre-tax income | 4.0 | % | (5.1 | )% | 18.6 | % | 6.5 | % | 4.0 | % | (5.1 | )% |
(In millions) | February 3, 2019 | February 4, 2018 | February 2, 2020 | February 3, 2019 | ||||||||||
Short-term borrowings | $ | 13 | $ | 20 | $ | 50 | $ | 13 | ||||||
Current portion of long-term debt | — | — | 14 | — | ||||||||||
Capital lease obligations | 17 | 16 | ||||||||||||
Finance lease obligations | 15 | 17 | ||||||||||||
Long-term debt | 2,819 | 3,061 | 2,694 | 2,819 | ||||||||||
Stockholders’ equity | 5,828 | 5,536 | 5,811 | 5,828 |
(In millions) | |||||||||||||||||||||||
Designation Date | Commencement Date | Initial Notional Amount | Notional Amount Outstanding as of February 3, 2019 | Fixed Rate | Expiration Date | Commencement Date | Initial Notional Amount | Notional Amount Outstanding as of February 2, 2020 | Fixed Rate | Expiration Date | |||||||||||||
August 2019 | February 2020 | $ | 50 | $ | — | 1.1975% | February 2022 | ||||||||||||||||
June 2019 | February 2020 | 50 | — | 1.409% | February 2022 | ||||||||||||||||||
June 2019 | June 2019 | 50 | 50 | 1.719% | July 2021 | ||||||||||||||||||
January 2019 | February 2020 | $ | 50 | $ | — | 2.4187% | February 2021 | February 2020 | 50 | — | 2.4187% | February 2021 | |||||||||||
November 2018 | February 2019 | 139 | — | 2.8645% | February 2021 | February 2019 | 139 | 127 | 2.8645% | February 2021 | |||||||||||||
October 2018 | February 2019 | 116 | — | 2.9975% | February 2021 | February 2019 | 116 | 103 | 2.9975% | February 2021 | |||||||||||||
June 2018 | August 2018 | 50 | 50 | 2.6825% | February 2021 | August 2018 | 50 | 50 | 2.6825% | February 2021 | |||||||||||||
June 2017 | February 2018 | 306 | 182 | 1.566% | February 2020 | February 2018 | 306 | 56 | 1.566% | February 2020 | |||||||||||||
July 2014 | February 2016 | 683 | — | 1.924% | February 2018 | February 2016 | 683 | — | 1.924% | February 2018 |
Payments Due by Period | Payments Due by Period | |||||||||||||||||||||||||||||||||||||||
Description | Total Obligations | 2019 | 2020-2021 | 2022-2023 | Thereafter | Total Obligations | 2020 | 2021-2022 | 2023-2024 | Thereafter | ||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||
Long-term debt(1) | $ | 2,839 | $ | — | $ | 1,649 | $ | 100 | $ | 1,090 | $ | 2,725 | $ | 14 | $ | 142 | $ | 1,906 | $ | 663 | ||||||||||||||||||||
Interest payments on long-term debt | 469 | 111 | 178 | 87 | 93 | 419 | 86 | 159 | 112 | 62 | ||||||||||||||||||||||||||||||
Short-term borrowings | 13 | 13 | — | — | — | 50 | 50 | |||||||||||||||||||||||||||||||||
Operating and capital leases(2) | 2,171 | 408 | 694 | 447 | 621 | |||||||||||||||||||||||||||||||||||
Operating and finance leases(2) | 2,274 | 445 | 740 | 443 | 646 | |||||||||||||||||||||||||||||||||||
Inventory purchase commitments(3) | 1,074 | 1,074 | — | — | — | 883 | 883 | |||||||||||||||||||||||||||||||||
Minimum contractual royalty payments(4) | 32 | 18 | 12 | 2 | — | 23 | 8 | 11 | 4 | |||||||||||||||||||||||||||||||
Non-qualified supplemental defined benefit plan(5) | 9 | 1 | 2 | 1 | 5 | 8 | 1 | 2 | 1 | 4 | ||||||||||||||||||||||||||||||
Sponsorship and model payments(6) | 57 | 28 | 25 | 3 | 1 | |||||||||||||||||||||||||||||||||||
Information-technology, sponsorships and other commitments(6) | 134 | 103 | 29 | 2 | ||||||||||||||||||||||||||||||||||||
Total contractual cash obligations | $ | 6,664 | $ | 1,653 | $ | 2,560 | $ | 640 | $ | 1,810 | $ | 6,516 | $ | 1,590 | $ | 1,083 | $ | 2,468 | $ | 1,375 |
(1) | At February |
(2) |
(3) | Represents contractual commitments that are enforceable and legally binding for goods on order and not received or paid for as of February |
(4) | Our minimum contractual royalty payments arise under numerous license agreements we have with third parties, each of which has different terms. Agreements typically require us to make minimum payments to the licensors of the licensed trademarks based on expected or required minimum levels of sales of licensed products, as well as additional royalty payments based on a percentage of sales when our sales exceed such minimum sales. Certain of our license agreements require that we pay a specified percentage of net sales to the licensor for advertising and promotion of the licensed products, in some cases requiring a minimum amount to be paid. Any advertising payments, with the exception of minimum payments to licensors, are excluded from the minimum contractual royalty payments shown in the table. There is no guarantee that we will exceed the minimum payments under any of these license agreements. |
(5) | We have an unfunded, non-qualified supplemental defined benefit plan covering certain retired executives under which the participants will receive a predetermined amount during the 10 years following the attainment of age 65, provided that prior to the termination of employment with us, the participant has been in such plan for at least 10 years and has attained age 55. |
(6) |
(a)(1) | See page F-1 for a listing of the consolidated financial statements included in Item 8 of this report. |
(a)(2) | See page F-1 for a listing of consolidated financial statement schedules submitted as part of this report. |
(a)(3) | The following exhibits are included in this report: |
+101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
+ | Filed or furnished herewith. |
* | Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report. |
(b) | Exhibits: See (a)(3) above for a listing of the exhibits included as part of this report. |
(c) | Financial Statement Schedules: See page F-1 for a listing of the consolidated financial statement schedules submitted as part of this report. |
PVH CORP. | ||
By: | /s/ EMANUEL CHIRICO | |
Emanuel Chirico | ||
Chairman and Chief Executive Officer |
Signature | Title | Date |
/s/ EMANUEL CHIRICO | Chairman and Chief Executive Officer | |
Emanuel Chirico | (Principal Executive Officer) | |
/s/ MICHAEL SHAFFER | Executive Vice President and Chief Operating & | |
Michael Shaffer | Financial Officer (Principal Financial Officer) | |
/s/ JAMES W. HOLMES | Senior Vice President and Controller | |
James W. Holmes | (Principal Accounting Officer) | |
/s/ MARY BAGLIVO | Director | |
Mary Baglivo | ||
/s/ BRENT CALLINICOS | Director | |
Brent Callinicos | ||
/s/ JUAN R. FIGUEREO | Director | |
Juan R. Figuereo | ||
/s/ JOSEPH B. FULLER | Director | |
Joseph B. Fuller | ||
/s/ JUDITH AMANDA SOURRY KNOX | Director | |
Judith Amanda Sourry Knox | ||
/s/ V. JAMES MARINO | Director | |
V. James Marino | ||
/s/ GERALDINE (PENNY) MCINTYRE | Director | |
Geraldine (Penny) McIntyre | ||
/s/ AMY MCPHERSON | Director | |
Amy McPherson | ||
/s/ HENRY NASELLA | Director | |
Henry Nasella | ||
/s/ EDWARD R. ROSENFELD | Director | |
Edward R. Rosenfeld | ||
/s/ CRAIG RYDIN | Director | |
Craig Rydin |
15(a)(1) The following consolidated financial statements and supplementary data are included in Item 8 of this report: |
15(a)(2) The following consolidated financial statement schedule is included herein: |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
Net sales | $ | 9,154.2 | $ | 8,439.4 | $ | 7,791.4 | $ | 9,400.0 | $ | 9,154.2 | $ | 8,439.4 | ||||||||||
Royalty revenue | 375.9 | 366.3 | 320.6 | 379.9 | 375.9 | 366.3 | ||||||||||||||||
Advertising and other revenue | 126.7 | 109.1 | 91.1 | 129.1 | 126.7 | 109.1 | ||||||||||||||||
Total revenue | 9,656.8 | 8,914.8 | 8,203.1 | 9,909.0 | 9,656.8 | 8,914.8 | ||||||||||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 4,348.5 | 4,020.4 | 3,832.8 | 4,520.6 | 4,348.5 | 4,020.4 | ||||||||||||||||
Gross profit | 5,308.3 | 4,894.4 | 4,370.3 | 5,388.4 | 5,308.3 | 4,894.4 | ||||||||||||||||
Selling, general and administrative expenses | 4,432.8 | 4,245.2 | 3,677.9 | 4,715.2 | 4,432.8 | 4,245.2 | ||||||||||||||||
Non-service related pension and postretirement cost (income) | 5.1 | 3.0 | (41.2 | ) | ||||||||||||||||||
Non-service related pension and postretirement cost | 90.0 | 5.1 | 3.0 | |||||||||||||||||||
Debt modification and extinguishment costs | — | 23.9 | 15.8 | 5.2 | — | 23.9 | ||||||||||||||||
Other noncash gain, net | — | — | 71.3 | |||||||||||||||||||
Other noncash loss, net | 28.9 | — | — | |||||||||||||||||||
Equity in net income of unconsolidated affiliates | 21.3 | 10.1 | 0.1 | 9.6 | 21.3 | 10.1 | ||||||||||||||||
Income before interest and taxes | 891.7 | 632.4 | 789.2 | 558.7 | 891.7 | 632.4 | ||||||||||||||||
Interest expense | 120.8 | 128.5 | 120.9 | 120.0 | 120.8 | 128.5 | ||||||||||||||||
Interest income | 4.7 | 6.3 | 5.9 | 5.3 | 4.7 | 6.3 | ||||||||||||||||
Income before taxes | 775.6 | 510.2 | 674.2 | 444.0 | 775.6 | 510.2 | ||||||||||||||||
Income tax expense (benefit) | 31.0 | (25.9 | ) | 125.5 | 28.9 | 31.0 | (25.9 | ) | ||||||||||||||
Net income | 744.6 | 536.1 | 548.7 | 415.1 | 744.6 | 536.1 | ||||||||||||||||
Less: Net loss attributable to redeemable non-controlling interest | (1.8 | ) | (1.7 | ) | (0.3 | ) | (2.2 | ) | (1.8 | ) | (1.7 | ) | ||||||||||
Net income attributable to PVH Corp. | $ | 746.4 | $ | 537.8 | $ | 549.0 | $ | 417.3 | $ | 746.4 | $ | 537.8 | ||||||||||
Basic net income per common share attributable to PVH Corp. | $ | 9.75 | $ | 6.93 | $ | 6.84 | $ | 5.63 | $ | 9.75 | $ | 6.93 | ||||||||||
Diluted net income per common share attributable to PVH Corp. | $ | 9.65 | $ | 6.84 | $ | 6.79 | $ | 5.60 | $ | 9.65 | $ | 6.84 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
Net income | $ | 744.6 | $ | 536.1 | $ | 548.7 | $ | 415.1 | $ | 744.6 | $ | 536.1 | ||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||||||
Foreign currency translation adjustments | (361.3 | ) | 561.3 | (21.4 | ) | (157.8 | ) | (361.3 | ) | 561.3 | ||||||||||||
Net unrealized and realized gain (loss) related to effective cash flow hedges, net of tax expense of $3.2, $0.1 and $1.2 | 101.8 | (99.1 | ) | 0.7 | ||||||||||||||||||
Net gain (loss) on net investment hedges, net of tax expense (benefit) of $22.5, $(28.7) and $8.6 | 73.1 | (70.8 | ) | 14.1 | ||||||||||||||||||
Net unrealized and realized (loss) gain related to effective cash flow hedges, net of tax (benefit) expense of $(1.0), $3.2 and $0.1 | (4.1 | ) | 101.8 | (99.1 | ) | |||||||||||||||||
Net gain (loss) on net investment hedges, net of tax expense (benefit) of $9.6, $22.5 and $(28.7) | 29.7 | 73.1 | (70.8 | ) | ||||||||||||||||||
Total other comprehensive (loss) income | (186.4 | ) | 391.4 | (6.6 | ) | (132.2 | ) | (186.4 | ) | 391.4 | ||||||||||||
Comprehensive income | 558.2 | 927.5 | 542.1 | 282.9 | 558.2 | 927.5 | ||||||||||||||||
Less: Comprehensive loss attributable to redeemable non-controlling interest | (1.8 | ) | (1.7 | ) | (0.3 | ) | (2.2 | ) | (1.8 | ) | (1.7 | ) | ||||||||||
Comprehensive income attributable to PVH Corp. | $ | 560.0 | $ | 929.2 | $ | 542.4 | $ | 285.1 | $ | 560.0 | $ | 929.2 |
February 3, 2019 | February 4, 2018 | February 2, 2020 | February 3, 2019 | |||||||||||
ASSETS | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | 452.0 | $ | 493.9 | $ | 503.4 | $ | 452.0 | ||||||
Trade receivables, net of allowances for doubtful accounts of $21.6 and $21.1 | 777.8 | 658.5 | ||||||||||||
Trade receivables, net of allowances for doubtful accounts of $21.1 and $21.6 | 741.4 | 777.8 | ||||||||||||
Other receivables | 26.0 | 37.9 | 23.7 | 26.0 | ||||||||||
Inventories, net | 1,732.4 | 1,591.3 | 1,615.7 | 1,732.4 | ||||||||||
Prepaid expenses | 168.7 | 184.5 | 159.9 | 168.7 | ||||||||||
Other | 81.7 | 64.7 | 112.9 | 81.7 | ||||||||||
Assets held for sale | 237.2 | — | ||||||||||||
Total Current Assets | 3,238.6 | 3,030.8 | 3,394.2 | 3,238.6 | ||||||||||
Property, Plant and Equipment, net | 984.5 | 899.8 | 1,026.8 | 984.5 | ||||||||||
Operating Lease Right-of-Use Assets | 1,675.8 | — | ||||||||||||
Goodwill | 3,670.5 | 3,834.7 | 3,677.6 | 3,670.5 | ||||||||||
Tradenames | 2,863.7 | 2,928.4 | 2,830.2 | 2,863.7 | ||||||||||
Other Intangibles, net | 705.5 | 798.2 | 650.5 | 705.5 | ||||||||||
Other Assets, including deferred taxes of $40.5 and $25.4 | 400.9 | 393.8 | ||||||||||||
Other Assets, including deferred taxes of $40.3 and $40.5 | 375.9 | 400.9 | ||||||||||||
Total Assets | $ | 11,863.7 | $ | 11,885.7 | $ | 13,631.0 | $ | 11,863.7 | LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | |||||
Current Liabilities: | ||||||||||||||
Accounts payable | $ | 924.2 | $ | 889.8 | $ | 882.8 | $ | 924.2 | ||||||
Accrued expenses | 891.6 | 923.1 | 929.6 | 891.6 | ||||||||||
Deferred revenue | 65.3 | 39.2 | 64.7 | 65.3 | ||||||||||
Current portion of operating lease liabilities | 363.5 | — | ||||||||||||
Short-term borrowings | 12.8 | 19.5 | 49.6 | 12.8 | ||||||||||
Current portion of long-term debt | — | — | 13.8 | — | ||||||||||
Liabilities related to assets held for sale | 57.1 | — | ||||||||||||
Total Current Liabilities | 1,893.9 | 1,871.6 | 2,361.1 | 1,893.9 | ||||||||||
Long-Term Portion of Operating Lease Liabilities | 1,532.0 | — | ||||||||||||
Long-Term Debt | 2,819.4 | 3,061.3 | 2,693.9 | 2,819.4 | ||||||||||
Other Liabilities, including deferred taxes of $565.2 and $663.0 | 1,322.4 | 1,414.4 | ||||||||||||
Other Liabilities, including deferred taxes of $558.1 and $565.2 | 1,234.5 | 1,322.4 | ||||||||||||
Redeemable Non-Controlling Interest | 0.2 | 2.0 | (2.0 | ) | 0.2 | |||||||||
Stockholders’ Equity: | ||||||||||||||
Preferred stock, par value $100 per share; 150,000 total shares authorized | — | — | — | — | ||||||||||
Common stock, par value $1 per share; 240,000,000 shares authorized; 85,446,141 and 84,851,079 shares issued | 85.4 | 84.9 | ||||||||||||
Common stock, par value $1 per share; 240,000,000 shares authorized; 85,890,276 and 85,446,141 shares issued | 85.9 | 85.4 | ||||||||||||
Additional paid in capital – common stock | 3,017.3 | 2,941.2 | 3,075.4 | 3,017.3 | ||||||||||
Retained earnings | 4,350.1 | 3,625.2 | 4,753.0 | 4,350.1 | ||||||||||
Accumulated other comprehensive loss | (507.9 | ) | (321.5 | ) | (640.1 | ) | (507.9 | ) | ||||||
Less: 10,042,510 and 7,672,317 shares of common stock held in treasury, at cost | (1,117.1 | ) | (793.4 | ) | ||||||||||
Less: 13,597,113 and 10,042,510 shares of common stock held in treasury, at cost | (1,462.7 | ) | (1,117.1 | ) | ||||||||||
Total Stockholders’ Equity | 5,827.8 | 5,536.4 | 5,811.5 | 5,827.8 | ||||||||||
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity | $ | 11,863.7 | $ | 11,885.7 | $ | 13,631.0 | $ | 11,863.7 |
2019 | 2018 | 2017 | ||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 415.1 | $ | 744.6 | $ | 536.1 | ||||||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 323.8 | 334.8 | 324.9 | |||||||||
Equity in net income of unconsolidated affiliates | (9.6 | ) | (21.3 | ) | (10.1 | ) | ||||||
Deferred taxes | (72.9 | ) | (113.3 | ) | (1) | (224.6 | ) | (1) | ||||
Stock-based compensation expense | 56.1 | 56.2 | 44.9 | |||||||||
Impairment of long-lived assets | 109.9 | (2) | 17.9 | 7.5 | ||||||||
Actuarial loss on retirement and benefit plans | 97.8 | 15.0 | 2.5 | |||||||||
Settlement loss on retirement plans | — | — | 9.4 | |||||||||
Debt modification and extinguishment costs | 5.2 | — | 23.9 | |||||||||
Other noncash loss, net | 28.9 | — | — | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Trade receivables, net | (17.1 | ) | (151.4 | ) | 3.3 | |||||||
Other receivables | 1.0 | 10.7 | (11.7 | ) | ||||||||
Inventories, net | 121.4 | (212.1 | ) | (163.5 | ) | |||||||
Accounts payable, accrued expenses and deferred revenue | 47.8 | 112.9 | 185.9 | |||||||||
Prepaid expenses | (14.4 | ) | 8.5 | (41.0 | ) | |||||||
Employer pension contributions | (0.7 | ) | (10.0 | ) | (0.3 | ) | ||||||
Contingent purchase price payments to Mr. Calvin Klein | — | (15.9 | ) | (55.6 | ) | |||||||
Other, net | (72.0 | ) | 75.9 | 12.6 | ||||||||
Net cash provided by operating activities | 1,020.3 | 852.5 | 644.2 | |||||||||
INVESTING ACTIVITIES(3) | ||||||||||||
Acquisitions, net of cash acquired | (192.4 | ) | (15.9 | ) | (40.1 | ) | ||||||
Purchases of property, plant and equipment | (345.2 | ) | (379.5 | ) | (358.1 | ) | ||||||
Proceeds from sale of building | 59.4 | — | 3.4 | |||||||||
Investments in unconsolidated affiliates | (27.7 | ) | — | (14.2 | ) | |||||||
Payment received on advance to unconsolidated affiliate | — | — | 6.3 | |||||||||
Net cash used by investing activities | (505.9 | ) | (395.4 | ) | (402.7 | ) | ||||||
FINANCING ACTIVITIES(2) | ||||||||||||
Net (payments on) proceeds from short-term borrowings | (12.1 | ) | (6.7 | ) | 0.4 | |||||||
Proceeds from 2019 facilities, net of related fees | 1,639.8 | — | — | |||||||||
Repayment of 2016 facilities | (1,649.3 | ) | — | — | ||||||||
Repayment of 2019 facilities | (70.6 | ) | — | — | ||||||||
Proceeds from 3 1/8% senior notes, net of related fees | — | — | 701.6 | |||||||||
Redemption of 4 1/2% senior notes, including premium | — | — | (715.8 | ) | ||||||||
Repayment of 2016/2014 facilities | — | (150.0 | ) | (250.0 | ) | |||||||
Net proceeds from settlement of awards under stock plans | 2.5 | 20.4 | 30.0 | |||||||||
Cash dividends | (11.3 | ) | (11.6 | ) | (11.9 | ) | ||||||
Acquisition of treasury shares | (345.1 | ) | (325.2 | ) | (259.1 | ) | ||||||
Payments of finance lease liabilities | (5.5 | ) | (5.4 | ) | (5.1 | ) | ||||||
Tommy Hilfiger India contingent purchase price payments | — | — | (0.8 | ) | ||||||||
Contributions from non-controlling interest | — | — | 1.7 | |||||||||
Net cash used by financing activities | (451.6 | ) | (478.5 | ) | (509.0 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (11.4 | ) | (20.5 | ) | 31.3 | |||||||
Increase (decrease) in cash and cash equivalents | 51.4 | (41.9 | ) | (236.2 | ) | |||||||
Cash and cash equivalents at beginning of year | 452.0 | 493.9 | 730.1 | |||||||||
Cash and cash equivalents at end of year | $ | 503.4 | $ | 452.0 | $ | 493.9 |
2018 | 2017 | 2016 | |||||||||
OPERATING ACTIVITIES | |||||||||||
Net income | $ | 744.6 | $ | 536.1 | $ | 548.7 | |||||
Adjustments to reconcile to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 334.8 | 324.9 | 321.8 | ||||||||
Equity in net income of unconsolidated affiliates | (21.3 | ) | (10.1 | ) | (0.1 | ) | |||||
Deferred taxes | (113.3 | ) | (1) | (224.6 | ) | (1) | 1.3 | ||||
Stock-based compensation expense | 56.2 | 44.9 | 38.2 | ||||||||
Impairment of long-lived assets | 17.9 | 7.5 | 10.1 | ||||||||
Actuarial loss (gain) on retirement and benefit plans | 15.0 | 2.5 | (39.1 | ) | |||||||
Settlement loss on retirement plans | — | 9.4 | — | ||||||||
Debt modification and extinguishment costs | — | 23.9 | 15.8 | ||||||||
Gain to write-up equity investment in joint venture to fair value | — | — | (153.1 | ) | |||||||
Net loss on deconsolidation of subsidiary | — | — | 81.8 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables, net | (151.4 | ) | 3.3 | 22.3 | |||||||
Other receivables | 10.7 | (11.7 | ) | 4.2 | |||||||
Inventories, net | (212.1 | ) | (163.5 | ) | 2.2 | ||||||
Accounts payable, accrued expenses and deferred revenue | 112.9 | 185.9 | 166.9 | ||||||||
Prepaid expenses | 8.5 | (41.0 | ) | 19.2 | |||||||
Employer pension contributions | (10.0 | ) | (0.3 | ) | (100.0 | ) | |||||
Contingent purchase price payments to Mr. Calvin Klein | (15.9 | ) | (55.6 | ) | (53.1 | ) | |||||
Other, net | 75.9 | 12.6 | 15.5 | ||||||||
Net cash provided by operating activities | 852.5 | 644.2 | 902.6 | ||||||||
INVESTING ACTIVITIES(2) | |||||||||||
Acquisitions, net of cash acquired | (15.9 | ) | (40.1 | ) | (157.7 | ) | |||||
Purchases of property, plant and equipment | (379.5 | ) | (358.1 | ) | (246.6 | ) | |||||
Proceeds from sale of building | — | 3.4 | 16.7 | ||||||||
Investments in and advance to unconsolidated affiliates | — | (14.2 | ) | (32.0 | ) | ||||||
Payment received on advance to unconsolidated affiliate | — | 6.3 | 6.2 | ||||||||
Loan to a supplier | — | — | (13.8 | ) | |||||||
Net cash used by investing activities | (395.4 | ) | (402.7 | ) | (427.2 | ) | |||||
FINANCING ACTIVITIES(2) | |||||||||||
Net (payments on) proceeds from short-term borrowings | (6.7 | ) | 0.4 | (6.8 | ) | ||||||
Proceeds from 3 1/8% senior notes, net of related fees | — | 701.6 | — | ||||||||
Redemption of 4 1/2% senior notes, including premium | — | (715.8 | ) | — | |||||||
Proceeds from 2016 facilities, net of related fees | — | — | 571.1 | ||||||||
Repayment of Term Loan B in connection with amendment to 2014 facilities | — | — | (582.0 | ) | |||||||
Repayment of 2016/2014 facilities | (150.0 | ) | (250.0 | ) | (350.0 | ) | |||||
Proceeds from 3 5/8% senior notes, net of related fees | — | — | 389.6 | ||||||||
Net proceeds from settlement of awards under stock plans | 20.4 | 30.0 | 13.1 | ||||||||
Cash dividends | (11.6 | ) | (11.9 | ) | (12.2 | ) | |||||
Acquisition of treasury shares | (325.2 | ) | (259.1 | ) | (322.1 | ) | |||||
Payments of capital lease obligations | (5.4 | ) | (5.1 | ) | (7.0 | ) | |||||
Tommy Hilfiger India contingent purchase price payments | — | (0.8 | ) | (0.6 | ) | ||||||
Contributions from non-controlling interest | — | 1.7 | 2.2 | ||||||||
Net cash used by financing activities | (478.5 | ) | (509.0 | ) | (304.7 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (20.5 | ) | 31.3 | 3.0 | |||||||
(Decrease) increase in cash and cash equivalents | (41.9 | ) | (236.2 | ) | 173.7 | ||||||
Cash and cash equivalents at beginning of year | 493.9 | 730.1 | 556.4 | ||||||||
Cash and cash equivalents at end of year | $ | 452.0 | $ | 493.9 | $ | 730.1 |
Stockholders’ Equity | Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid In Capital- Common Stock | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | Common Stock | Additional Paid In Capital- Common Stock | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Non-Controlling Interest | Preferred Stock | Shares | td par Value | Retained Earnings | Treasury Stock | Redeemable Non-Controlling Interest | Preferred Stock | Shares | td par Value | Retained Earnings | Treasury Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
January 31, 2016 | $ | — | $ | — | 83,545,818 | $ | 83.5 | $ | 2,822.5 | $ | 2,561.2 | $ | (704.2 | ) | $ | (210.7 | ) | $ | 4,552.3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to PVH Corp. | 549.0 | 549.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | (21.4 | ) | (21.4 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $1.2 | 0.7 | 0.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on net investment hedge, net of tax expense of $8.6 | 14.1 | 14.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income attributable to PVH Corp. | 542.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of awards under stock plans | 377,366 | 0.4 | 12.7 | 13.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax deficiency from awards under stock plans | (7.2 | ) | (7.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 38.2 | 38.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.15 per share) | (12.2 | ) | (12.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of 3,313,810 treasury shares | (322.1 | ) | (322.1 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition date fair value of redeemable non-controlling interest | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from the minority shareholder | 2.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to redeemable non-controlling interest | (0.3 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
January 29, 2017 | 2.0 | — | 83,923,184 | 83.9 | 2,866.2 | 3,098.0 | (710.8 | ) | (532.8 | ) | 4,804.5 | $ | 2.0 | $ | — | 83,923,184 | $ | 83.9 | $ | 2,866.2 | $ | 3,098.0 | $ | (710.8 | ) | $ | (532.8 | ) | $ | 4,804.5 | ||||||||||||||||||||||||||||||||||||||
Net income attributable to PVH Corp. | 537.8 | 537.8 | 537.8 | 537.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | 561.3 | 561.3 | 561.3 | 561.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net unrealized and realized loss related to effective cash flow hedges, net of tax expense of $0.1 | (99.1 | ) | (99.1 | ) | (99.1 | ) | (99.1 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss on net investment hedges, net of tax benefit of $(28.7) | (70.8 | ) | (70.8 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income attributable to PVH Corp. | 929.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss on net investment hedges, net of tax benefit of $28.7 | (70.8 | ) | (70.8 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to PVH Corp. | 929.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification related to the adoption of accounting guidance for certain tax effects in connection with the U.S. Tax Legislation | 2.1 | (2.1 | ) | — | 2.1 | (2.1 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment related to the adoption of accounting guidance for share-based payment award transactions | 1.1 | (0.8 | ) | 0.3 | 1.1 | (0.8 | ) | 0.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of awards under stock plans | 927,895 | 1.0 | 29.0 | 30.0 | 927,895 | 1.0 | 29.0 | 30.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 44.9 | 44.9 | 44.9 | 44.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.15 per share) | (11.9 | ) | (11.9 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.15 per common share) | (11.9 | ) | (11.9 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of 2,300,657 treasury shares | (260.6 | ) | (260.6 | ) | (260.6 | ) | (260.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from the minority shareholder | 1.7 | 1.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to redeemable non-controlling interest | (1.7 | ) | (1.7 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
February 4, 2018 | 2.0 | — | 84,851,079 | 84.9 | 2,941.2 | 3,625.2 | (321.5 | ) | (793.4 | ) | 5,536.4 | 2.0 | — | 84,851,079 | 84.9 | 2,941.2 | 3,625.2 | (321.5 | ) | (793.4 | ) | 5,536.4 | ||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to PVH Corp. | 746.4 | 746.4 | 746.4 | 746.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | (361.3 | ) | (361.3 | ) | (361.3 | ) | (361.3 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $3.2 | 101.8 | 101.8 | 101.8 | 101.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on net investment hedges, net of tax expense of $22.5 | 73.1 | 73.1 | 73.1 | 73.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income attributable to PVH Corp. | 560.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to PVH Corp. | 560.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment related to the adoption of accounting guidance for revenue recognition | (1.9 | ) | (1.9 | ) | (1.9 | ) | (1.9 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment related to the adoption of accounting guidance for income tax accounting on intercompany sales or transfers of assets other than inventory | (8.0 | ) | (8.0 | ) | (8.0 | ) | (8.0 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of awards under stock plans | 595,062 | 0.5 | 19.9 | 20.4 | 595,062 | 0.5 | 19.9 | 20.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 56.2 | 56.2 | 56.2 | 56.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.15 per share) | (11.6 | ) | (11.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.15 per common share) | (11.6 | ) | (11.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of 2,370,193 treasury shares | (323.7 | ) | (323.7 | ) | (323.7 | ) | (323.7 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to redeemable non-controlling interest | (1.8 | ) | (1.8 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
February 3, 2019 | $ | 0.2 | $ | — | 85,446,141 | $ | 85.4 | $ | 3,017.3 | $ | 4,350.1 | $ | (507.9 | ) | $ | (1,117.1 | ) | $ | 5,827.8 | 0.2 | — | 85,446,141 | 85.4 | 3,017.3 | 4,350.1 | (507.9 | ) | (1,117.1 | ) | 5,827.8 | ||||||||||||||||||||||||||||||||||||||
Net income attributable to PVH Corp. | 417.3 | 417.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | (157.8 | ) | (157.8 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net unrealized and realized loss related to effective cash flow hedges, net of tax benefit of $1.0 | (4.1 | ) | (4.1 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on net investment hedges, net of tax expense of $9.6 | 29.7 | 29.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to PVH Corp. | 285.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment related to the adoption of accounting guidance for leases | (3.1 | ) | (3.1 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of awards under stock plans | 444,135 | 0.5 | 2.0 | 2.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 56.1 | 56.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.15 per common share) | (11.3 | ) | (11.3 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of 3,554,603 treasury shares | (345.6 | ) | (345.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to redeemable non-controlling interest | (2.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
February 2, 2020 | $ | (2.0 | ) | $ | — | 85,890,276 | $ | 85.9 | $ | 3,075.4 | $ | 4,753.0 | $ | (640.1 | ) | $ | (1,462.7 | ) | $ | 5,811.5 |
(In millions) | As Reported 2/3/19 | Adjustments | Adjusted 2/3/19 | ||||||||
Assets | |||||||||||
Prepaid expenses | $ | 168.7 | $ | (21.3 | ) | $ | 147.4 | ||||
Operating Lease Right-of-Use Assets | — | 1,708.2 | 1,708.2 | ||||||||
Other Assets | 400.9 | (10.3 | ) | 390.6 | |||||||
Liabilities | |||||||||||
Accrued expenses | 891.6 | (17.0 | ) | 874.6 | |||||||
Current portion of operating lease liabilities | — | 350.5 | 350.5 | ||||||||
Long-Term Portion of Operating Lease Liabilities | — | 1,514.1 | 1,514.1 | ||||||||
Other Liabilities | 1,322.4 | (167.9 | ) | 1,154.5 | |||||||
Stockholders’ Equity | |||||||||||
Retained earnings | 4,350.1 | (3.1 | ) | 4,347.0 |
(In millions) | 2018 | 2019 | 2018 | |||||||
Deferred revenue balance at February 4, 2018 | $ | 39.2 | ||||||||
Deferred revenue balance at beginning of period | $ | 65.3 | $ | 39.2 | ||||||
Impact of adopting the new revenue standard | 15.6 | — | 15.6 | |||||||
Net additions to deferred revenue during the period | 61.3 | 60.3 | 61.3 | |||||||
Reductions in deferred revenue for revenue recognized during the period | (50.8 | ) | (60.9 | ) | (50.8 | ) | ||||
Deferred revenue balance at February 3, 2019 | $ | 65.3 | ||||||||
Deferred revenue balance at end of period | $ | 64.7 | $ | 65.3 |
(In millions) | ||||
Cash consideration | $ | 124.7 | ||
Fair value of the Company’s investment in PVH Australia | 131.4 | |||
Fair value of the Company’s investment in Gazal | 40.1 | |||
Fair value of mandatorily redeemable non-controlling interest | 26.2 | |||
Elimination of pre-acquisition receivable owed to the Company | 2.2 | |||
Total acquisition date fair value of the business acquired | $ | 324.6 |
(In millions) | ||||
Cash and cash equivalents | $ | 6.6 | ||
Trade receivables | 15.1 | |||
Inventories | 89.9 | |||
Prepaid expenses | 1.3 | |||
Other current assets | 3.5 | |||
Assets held for sale | 58.8 | |||
Property, plant and equipment | 18.4 | |||
Goodwill | 65.9 | |||
Intangible assets | 222.2 | |||
Operating lease right-of-use assets | 56.4 | |||
Total assets acquired | 538.1 | |||
Accounts payable | 14.4 | |||
Accrued expenses | 22.5 | |||
Short-term borrowings | 50.5 | |||
Current portion of operating lease liabilities | 10.9 | |||
Long-term portion of operating lease liabilities | 43.9 | |||
Deferred tax liability | 69.6 | |||
Other liabilities | 1.7 | |||
Total liabilities assumed | 213.5 | |||
Total acquisition date fair value of the business acquired | $ | 324.6 |
(In millions) | |||
Assets held for sale: | |||
Trade receivables | $ | 48.8 | |
Inventories, net | 54.3 | ||
Prepaid expenses | 0.6 | ||
Other current assets | 0.6 | ||
Property, plant and equipment, net | 6.1 | ||
Operating lease right-of-use assets | 9.0 | ||
Goodwill | 48.1 | ||
Other intangibles, net (1) | 95.3 | ||
Allowance for reduction of assets held for sale | (25.6 | ) | |
Total assets held for sale | $ | 237.2 | |
Liabilities related to assets held for sale: | |||
Accounts payable | $ | 38.7 | |
Accrued expenses | 5.4 | ||
Current portion of operating lease liabilities | 0.6 | ||
Long-term portion of operating lease liabilities | 10.6 | ||
Other liabilities | 1.8 | ||
Total liabilities related to assets held for sale | $ | 57.1 |
(In millions) | 2019 | 2018 | |||||
Land | $ | 1.0 | $ | 1.0 | |||
Buildings and building improvements | 53.2 | 54.8 | |||||
Machinery, software and equipment | 871.7 | 697.6 | |||||
Furniture and fixtures | 586.0 | 540.0 | |||||
Shop-in-shops/concession locations | 209.8 | 230.9 | |||||
Leasehold improvements | 849.0 | 790.3 | |||||
Construction in progress | 35.5 | 83.9 | |||||
Property, plant and equipment, gross | 2,606.2 | 2,398.5 | |||||
Less: Accumulated depreciation | (1,579.4 | ) | (1,414.0 | ) | |||
Property, plant and equipment, net | $ | 1,026.8 | $ | 984.5 |
(In millions) | 2018 | 2017 | |||||
Land | $ | 1.0 | $ | 1.0 | |||
Buildings and building improvements | 54.8 | 55.3 | |||||
Machinery, software and equipment | 697.6 | 609.5 | |||||
Furniture and fixtures | 540.0 | 494.9 | |||||
Shop-in-shops | 230.9 | 208.6 | |||||
Leasehold improvements | 790.3 | 724.5 | |||||
Construction in progress | 83.9 | 35.9 | |||||
Property, plant and equipment, gross | 2,398.5 | 2,129.7 | |||||
Less: Accumulated depreciation | (1,414.0 | ) | (1,229.9 | ) | |||
Property, plant and equipment, net | $ | 984.5 | $ | 899.8 |
(In millions) | Calvin Klein North America | Calvin Klein International | Tommy Hilfiger North America | Tommy Hilfiger International | Heritage Brands Wholesale | Heritage Brands Retail | Total | ||||||||||||||||||||
Balance as of February 4, 2018 | |||||||||||||||||||||||||||
Goodwill, gross | $ | 780.2 | $ | 942.0 | $ | 204.4 | $ | 1,661.6 | $ | 246.5 | $ | 11.9 | $ | 3,846.6 | |||||||||||||
Accumulated impairment losses | — | — | — | — | — | (11.9 | ) | (11.9 | ) | ||||||||||||||||||
Goodwill, net | 780.2 | 942.0 | 204.4 | 1,661.6 | 246.5 | — | 3,834.7 | ||||||||||||||||||||
Contingent purchase price payments to Mr. Calvin Klein | 1.0 | 0.7 | — | — | — | — | 1.7 | ||||||||||||||||||||
Currency translation | (0.9 | ) | (33.2 | ) | — | (131.8 | ) | — | — | (165.9 | ) | ||||||||||||||||
Balance as of February 3, 2019 | |||||||||||||||||||||||||||
Goodwill, gross | 780.3 | 909.5 | 204.4 | 1,529.8 | 246.5 | 11.9 | 3,682.4 | ||||||||||||||||||||
Accumulated impairment losses | — | — | — | — | — | (11.9 | ) | (11.9 | ) | ||||||||||||||||||
Goodwill, net | 780.3 | 909.5 | 204.4 | 1,529.8 | 246.5 | — | 3,670.5 | ||||||||||||||||||||
Australia acquisition | — | 9.1 | — | 56.8 | — | — | 65.9 | ||||||||||||||||||||
TH CSAP acquisition | — | — | — | 63.9 | — | — | 63.9 | ||||||||||||||||||||
Reclassification of goodwill to assets held for sale | — | — | — | — | (48.1 | ) | — | (48.1 | ) | ||||||||||||||||||
Currency translation | 0.1 | (22.5 | ) | — | (52.2 | ) | — | — | (74.6 | ) | |||||||||||||||||
Balance as of February 2, 2020 | |||||||||||||||||||||||||||
Goodwill, gross | 780.4 | 896.1 | 204.4 | 1,598.3 | 198.4 | 11.9 | 3,689.5 | ||||||||||||||||||||
Accumulated impairment losses | — | — | — | — | — | (11.9 | ) | (11.9 | ) | ||||||||||||||||||
Goodwill, net | $ | 780.4 | $ | 896.1 | $ | 204.4 | $ | 1,598.3 | $ | 198.4 | $ | — | $ | 3,677.6 |
(In millions) | Calvin Klein North America | Calvin Klein International | Tommy Hilfiger North America | Tommy Hilfiger International | Heritage Brands Wholesale | Heritage Brands Retail | Total | ||||||||||||||||||||
Balance as of January 29, 2017 | |||||||||||||||||||||||||||
Goodwill, gross | $ | 739.4 | $ | 864.5 | $ | 204.4 | $ | 1,425.8 | $ | 235.8 | $ | 11.9 | $ | 3,481.8 | |||||||||||||
Accumulated impairment losses | — | — | — | — | — | (11.9 | ) | (11.9 | ) | ||||||||||||||||||
Goodwill, net | 739.4 | 864.5 | 204.4 | 1,425.8 | 235.8 | — | 3,469.9 | ||||||||||||||||||||
Contingent purchase price payments to Mr. Calvin Klein | 34.2 | 23.1 | — | — | — | — | 57.3 | ||||||||||||||||||||
True & Co. acquisition | 5.4 | 4.8 | — | — | 10.7 | — | 20.9 | ||||||||||||||||||||
Belgian acquisition | — | 1.3 | — | 11.1 | — | — | 12.4 | ||||||||||||||||||||
Currency translation | 1.2 | 48.3 | — | 224.7 | — | — | 274.2 | ||||||||||||||||||||
Balance as of February 4, 2018 | |||||||||||||||||||||||||||
Goodwill, gross | 780.2 | 942.0 | 204.4 | 1,661.6 | 246.5 | 11.9 | 3,846.6 | ||||||||||||||||||||
Accumulated impairment losses | — | — | — | — | — | (11.9 | ) | (11.9 | ) | ||||||||||||||||||
Goodwill, net | 780.2 | 942.0 | 204.4 | 1,661.6 | 246.5 | — | 3,834.7 | ||||||||||||||||||||
Contingent purchase price payments to Mr. Calvin Klein | 1.0 | 0.7 | — | — | — | — | 1.7 | ||||||||||||||||||||
Currency translation | (0.9 | ) | (33.2 | ) | — | (131.8 | ) | — | — | (165.9 | ) | ||||||||||||||||
Balance as of February 3, 2019 | |||||||||||||||||||||||||||
Goodwill, gross | 780.3 | 909.5 | 204.4 | 1,529.8 | 246.5 | 11.9 | 3,682.4 | ||||||||||||||||||||
Accumulated impairment losses | — | — | — | — | — | (11.9 | ) | (11.9 | ) | ||||||||||||||||||
Goodwill, net | $ | 780.3 | $ | 909.5 | $ | 204.4 | $ | 1,529.8 | $ | 246.5 | $ | — | $ | 3,670.5 |
2019 | 2018 | ||||||||||||||||||||||
(In millions) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||
Intangible assets subject to amortization: | |||||||||||||||||||||||
Customer relationships (1)(2) | $ | 289.9 | $ | (189.2 | ) | $ | 100.7 | $ | 307.4 | $ | (186.1 | ) | $ | 121.3 | |||||||||
Reacquired license rights | 502.5 | (161.9 | ) | 340.6 | 523.8 | (154.4 | ) | 369.4 | |||||||||||||||
Total intangible assets subject to amortization | 792.4 | (351.1 | ) | 441.3 | 831.2 | (340.5 | ) | 490.7 | |||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||
Tradenames | 2,830.2 | — | 2,830.2 | 2,863.7 | — | 2,863.7 | |||||||||||||||||
Perpetual license right (2) | — | — | — | 203.8 | — | 203.8 | |||||||||||||||||
Reacquired perpetual license rights (1) | 209.2 | — | 209.2 | 11.0 | — | 11.0 | |||||||||||||||||
Total indefinite-lived intangible assets | 3,039.4 | — | 3,039.4 | 3,078.5 | — | 3,078.5 | |||||||||||||||||
Total other intangible assets | $ | 3,831.8 | $ | (351.1 | ) | $ | 3,480.7 | $ | 3,909.7 | $ | (340.5 | ) | $ | 3,569.2 |
2018 | 2017 | ||||||||||||||||||||||
(In millions) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||
Intangible assets subject to amortization: | |||||||||||||||||||||||
Customer relationships | $ | 307.4 | $ | (186.1 | ) | $ | 121.3 | $ | 324.7 | $ | (169.4 | ) | $ | 155.3 | |||||||||
Reacquired license rights | 523.8 | (154.4 | ) | 369.4 | 550.7 | (124.4 | ) | 426.3 | |||||||||||||||
Total intangible assets subject to amortization | 831.2 | (340.5 | ) | 490.7 | 875.4 | (293.8 | ) | 581.6 | |||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||
Tradenames | 2,863.7 | — | 2,863.7 | 2,928.4 | — | 2,928.4 | |||||||||||||||||
Perpetual license rights | 203.8 | — | 203.8 | 204.7 | — | 204.7 | |||||||||||||||||
Reacquired perpetual license rights | 11.0 | — | 11.0 | 11.9 | — | 11.9 | |||||||||||||||||
Total indefinite-lived intangible assets | 3,078.5 | — | 3,078.5 | 3,145.0 | — | 3,145.0 | |||||||||||||||||
Total other intangible assets | $ | 3,909.7 | $ | (340.5 | ) | $ | 3,569.2 | $ | 4,020.4 | $ | (293.8 | ) | $ | 3,726.6 |
(In millions) | ||||
Fiscal Year | Amount | |||
2020 | $ | 36.8 | ||
2021 | 36.6 | |||
2022 | 34.3 | |||
2023 | 24.0 | |||
2024 | 23.6 |
(In millions) | ||||
Fiscal Year | Amount | |||
2019 | $ | 39.0 | ||
2020 | 39.0 | |||
2021 | 38.7 | |||
2022 | 36.5 | |||
2023 | 23.3 |
(In millions) | 2019 | 2018 | |||||
Senior unsecured Term Loan A facilities due 2024 (1)(2) | $ | 1,569.5 | $ | — | |||
Senior secured Term Loan A facility due 2021 | — | 1,643.8 | |||||
7 3/4% debentures due 2023 | 99.7 | 99.6 | |||||
3 5/8% senior unsecured euro notes due 2024 (2) | 382.9 | 396.5 | |||||
3 1/8% senior unsecured euro notes due 2027 (2) | 655.6 | 679.5 | |||||
Total | 2,707.7 | 2,819.4 | |||||
Less: Current portion of long-term debt | 13.8 | — | |||||
Long-term debt | $ | 2,693.9 | $ | 2,819.4 |
(In millions) | 2018 | 2017 | |||||
Senior secured Term Loan A facility due 2021 | $ | 1,643.8 | $ | 1,792.1 | |||
7 3/4% debentures due 2023 | 99.6 | 99.5 | |||||
3 5/8% senior unsecured euro notes due 2024 (1) | 396.5 | 430.8 | |||||
3 1/8% senior unsecured euro notes due 2027 (1) | 679.5 | 738.9 | |||||
Total | 2,819.4 | 3,061.3 | |||||
Less: Current portion of long-term debt | — | — | |||||
Long-term debt | $ | 2,819.4 | $ | 3,061.3 |
(1) | The outstanding principal balance for the United States dollar-denominated Term Loan A facility and the euro-denominated Term Loan A facility was $1,029.6 million and €493.8 million, respectively, as of February 2, 2020. |
(2) | The carrying amount of the Company’s euro-denominated Term Loan A facility and senior unsecured euro notes includes the impact of changes in the exchange rate of the United States dollar against the euro. |
(In millions) | ||
Fiscal Year | Amount (1) | |
2020 | 13.8 | |
2021 | 39.0 | |
2022 | 102.9 | |
2023 | 223.4 | |
2024 | 1,682.9 |
(In millions) | |||
Fiscal Year | Amount | ||
2019 | $ | — | |
2020 | 123.5 | ||
2021 | 1,525.8 | ||
2022 | — | ||
2023 | 100.0 |
(1) | A portion of the Company’s mandatory long-term debt repayments are denominated in euro and subject to changes in the exchange rate of the United States dollar against the euro. |
(In millions) | ||||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||
Designation Date | Commencement Date | Initial Notional Amount | Notional Amount Outstanding as of February 3, 2019 | Fixed Rate | Expiration Date | Commencement Date | Initial Notional Amount | Notional Amount Outstanding as of February 2, 2020 | Fixed Rate | Expiration Date | ||||||||||||||||||
August 2019 | February 2020 | $ | 50.0 | $ | — | 1.1975% | February 2022 | |||||||||||||||||||||
June 2019 | February 2020 | 50.0 | — | 1.409% | February 2022 | |||||||||||||||||||||||
June 2019 | June 2019 | 50.0 | 50.0 | 1.719% | July 2021 | |||||||||||||||||||||||
January 2019 | February 2020 | $ | 50.0 | $ | — | 2.4187% | February 2021 | February 2020 | 50.0 | — | 2.4187% | February 2021 | ||||||||||||||||
November 2018 | February 2019 | 139.2 | — | 2.8645% | February 2021 | February 2019 | 139.2 | 126.6 | 2.8645% | February 2021 | ||||||||||||||||||
October 2018 | February 2019 | 115.7 | — | 2.9975% | February 2021 | February 2019 | 115.7 | 103.3 | 2.9975% | February 2021 | ||||||||||||||||||
June 2018 | August 2018 | 50.0 | 50.0 | 2.6825% | February 2021 | August 2018 | 50.0 | 50.0 | 2.6825% | February 2021 | ||||||||||||||||||
June 2017 | February 2018 | 306.5 | 181.5 | 1.566% | February 2020 | February 2018 | 306.5 | 56.5 | 1.566% | February 2020 | ||||||||||||||||||
July 2014 | February 2016 | 682.6 | — | 1.924% | February 2018 | February 2016 | 682.6 | — | 1.924% | February 2018 |
(In millions) | 2019 | 2018 | 2017 | ||||||||
Domestic | $ | (441.2 | ) | $ | (5.3 | ) | $ | (102.0 | ) | ||
Foreign | 885.2 | 780.9 | 612.2 | ||||||||
Total | $ | 444.0 | $ | 775.6 | $ | 510.2 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Domestic | $ | (5.3 | ) | $ | (102.0 | ) | $ | 60.9 | |||
Foreign | 780.9 | 612.2 | 613.3 | ||||||||
Total | $ | 775.6 | $ | 510.2 | $ | 674.2 |
(In millions) | 2019 | 2018 | 2017 | |||||||||
Federal: | ||||||||||||
Current | $ | (30.4 | ) | $ | (30.5 | ) | $ | 51.7 | ||||
Deferred | (52.6 | ) | (1) | (53.2 | ) | (2) | (198.3 | ) | (2) | |||
State and local: | ||||||||||||
Current | 4.3 | 4.6 | 3.5 | |||||||||
Deferred | (16.5 | ) | 9.6 | (7.8 | ) | |||||||
Foreign: | ||||||||||||
Current | 127.9 | 170.2 | 143.5 | |||||||||
Deferred | (3.8 | ) | (1) | (69.7 | ) | (3) | (18.5 | ) | ||||
Total | $ | 28.9 | $ | 31.0 | $ | (25.9 | ) |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Federal: | |||||||||||
Current | $ | (30.5 | ) | $ | 51.7 | $ | (2.7 | ) | |||
Deferred | (53.2 | ) | (1) | (198.3 | ) | (1) | (9.3 | ) | |||
State and local: | |||||||||||
Current | 4.6 | 3.5 | (2.4 | ) | |||||||
Deferred | 9.6 | (7.8 | ) | (0.9 | ) | ||||||
Foreign: | |||||||||||
Current | 170.2 | 143.5 | 129.3 | ||||||||
Deferred | (69.7 | ) | (2) | (18.5 | ) | 11.5 | |||||
Total | $ | 31.0 | $ | (25.9 | ) | $ | 125.5 |
(1) | Includes a $27.8 million benefit related to the write-off of deferred tax liabilities in connection with the pre-tax noncash impairment of the Speedo perpetual license right, primarily in the United States. Please see Note 4, “Assets Held For Sale,” for further discussion. |
Includes a $41.1 million benefit related to the remeasurement of certain net deferred tax liabilities in connection with the enactment of legislation in the Netherlands known as the “2019 Dutch Tax Plan,” which became effective on January 1, 2019 and includes a gradual reduction of the corporate income tax rate by 2021. |
2019 | 2018 | 2017 | |||||||
Statutory federal income tax rate (1) | 21.0 | % | 21.0 | % | 33.7 | % | |||
State and local income taxes, net of federal income tax benefit | (2.4 | )% | 0.5 | % | (1.1 | )% | |||
Effects of international jurisdictions, including foreign tax credits | (15.7 | )% | (9.5 | )% | (20.3 | )% | |||
Change in estimates for uncertain tax positions | (11.8 | )% | (2) | (3.7 | )% | (7.5 | )% | ||
Change in valuation allowance | 1.8 | % | (5.3 | )% | (3) | 11.0 | % | (4) | |
One-time transition tax due to U.S. Tax Legislation | — | % | — | % | 34.0 | % | |||
Remeasurement due to U.S. Tax Legislation | — | % | 0.2 | % | (51.9 | )% | |||
Tax on foreign earnings (U.S. Tax Legislation - GILTI and FDII) | 10.0 | % | 1.9 | % | — | % | |||
Tax on Speedo transaction basis difference | 2.3 | % | — | % | — | % | |||
Excess tax benefits related to stock-based compensation | (0.2 | )% | (0.6 | )% | (2.8 | )% | (5) | ||
Other, net | 1.5 | % | (0.5 | )% | (0.2 | )% | |||
Effective income tax rate | 6.5 | % | 4.0 | % | (5.1 | )% |
2018 | 2017 | 2016 | ||||||
Statutory federal income tax rate (1) | 21.0 | % | 33.7 | % | 35.0 | % | ||
State and local income taxes, net of federal income tax benefit | 0.5 | % | (1.1 | )% | 0.4 | % | ||
Effects of international jurisdictions, including foreign tax credits | (9.5 | )% | (2) | (20.3 | )% | (12.9 | )% | |
Change in estimates for uncertain tax positions | (3.7 | )% | (7.5 | )% | (3.7 | )% | ||
Change in valuation allowance | (5.3 | )% | (3) | 11.0 | % | (4) | (0.1 | )% |
One-time transition tax due to U.S. Tax Legislation | — | % | 34.0 | % | — | % | ||
Remeasurement due to U.S. Tax Legislation | 0.2 | % | (51.9 | )% | — | % | ||
Tax on foreign earnings (U.S. Tax Legislation - GILTI and FDII) | 1.9 | % | — | % | — | % | ||
Excess tax benefits related to stock-based compensation | (0.6 | )% | (2.8 | )% | (5) | — | % | |
Other, net | (0.5 | )% | (0.2 | )% | (0.1 | )% | ||
Effective income tax rate | 4.0 | % | (5.1 | )% | 18.6 | % |
(1) | The United States statutory federal income tax rate changed from 35.0% to 21.0%, effective January 1, 2018, as a result of the U.S. Tax Legislation. The United States statutory federal income tax rate for 2017 is a blended rate of 33.7%. |
(3) | Includes the release of a $26.3 million valuation allowance on the Company’s foreign tax credits to adjust the provisional amount recorded in 2017 as a result of the U.S. Tax Legislation. |
(4) | Includes the recognition of a $38.5 million provisional valuation allowance on the Company’s foreign tax credits as a result of the U.S. Tax Legislation. |
(5) | Includes an excess tax benefit from the exercise of stock options by the Company’s Chairman and Chief Executive Officer. |
(In millions) | 2019 | 2018 | |||||
Gross deferred tax assets | |||||||
Tax loss and credit carryforwards | $ | 232.5 | $ | 230.1 | |||
Operating lease liabilities | 407.6 | — | |||||
Employee compensation and benefits | 110.9 | 83.1 | |||||
Inventories | 39.7 | 26.8 | |||||
Accounts receivable | 20.3 | 17.1 | |||||
Accrued expenses | 26.5 | 30.2 | |||||
Other, net | — | 13.8 | |||||
Subtotal | 837.5 | 401.1 | |||||
Valuation allowances | (69.8 | ) | (62.6 | ) | |||
Total gross deferred tax assets, net of valuation allowances | $ | 767.7 | $ | 338.5 | |||
Gross deferred tax liabilities | |||||||
Intangibles | $ | (860.6 | ) | $ | (825.3 | ) | |
Operating lease right-of-use assets | (357.2 | ) | — | ||||
Property, plant and equipment | (46.2 | ) | (33.6 | ) | |||
Derivative financial instruments | (12.8 | ) | (4.3 | ) | |||
Other, net | (8.7 | ) | — | ||||
Total gross deferred tax liabilities | $ | (1,285.5 | ) | $ | (863.2 | ) | |
Net deferred tax liability | $ | (517.8 | ) | $ | (524.7 | ) |
(In millions) | 2018 | 2017 | |||||
Gross deferred tax assets | |||||||
Tax loss and credit carryforwards | $ | 230.1 | $ | 247.0 | |||
Employee compensation and benefits | 83.1 | 72.2 | |||||
Inventories | 26.8 | 22.1 | |||||
Accounts receivable | 17.1 | 17.6 | |||||
Accrued expenses | 30.2 | 25.5 | |||||
Derivative financial instruments | — | 18.3 | |||||
Other, net | 13.8 | 8.7 | |||||
Subtotal | 401.1 | 411.4 | |||||
Valuation allowances | (62.6 | ) | (106.3 | ) | |||
Total gross deferred tax assets, net of valuation allowances | $ | 338.5 | $ | 305.1 | |||
Gross deferred tax liabilities | |||||||
Intangibles | $ | (825.3 | ) | $ | (898.9 | ) | |
Property, plant and equipment | (33.6 | ) | (43.8 | ) | |||
Derivative financial instruments | (4.3 | ) | — | ||||
Total gross deferred tax liabilities | $ | (863.2 | ) | $ | (942.7 | ) | |
Net deferred tax liability | $ | (524.7 | ) | $ | (637.6 | ) |
(In millions) | 2019 | 2018 | 2017 | ||||||||
Balance at beginning of year | $ | 248.3 | $ | 297.1 | $ | 245.6 | |||||
Increases related to prior year tax positions | 7.7 | 13.9 | 15.4 | ||||||||
Decreases related to prior year tax positions | (15.8 | ) | (24.9 | ) | (10.3 | ) | |||||
Increases related to current year tax positions | 18.2 | 25.5 | 79.7 | ||||||||
Lapses in statute of limitations | (36.0 | ) | (54.7 | ) | (46.3 | ) | |||||
Effects of foreign currency translation | (2.5 | ) | (8.6 | ) | 13.0 | ||||||
Balance at end of year | $ | 219.9 | $ | 248.3 | $ | 297.1 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Balance at beginning of year | $ | 297.1 | $ | 245.6 | $ | 226.8 | |||||
Increases related to prior year tax positions | 13.9 | 15.4 | 2.8 | ||||||||
Decreases related to prior year tax positions | (24.9 | ) | (10.3 | ) | (9.9 | ) | |||||
Increases related to current year tax positions | 25.5 | 79.7 | 52.0 | ||||||||
Lapses in statute of limitations | (54.7 | ) | (46.3 | ) | (24.4 | ) | |||||
Effects of foreign currency translation | (8.6 | ) | 13.0 | (1.7 | ) | ||||||
Balance at end of year | $ | 248.3 | $ | 297.1 | $ | 245.6 |
(In millions) | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Assets | Other Assets | Other Current Assets | Other Assets | Accrued Expenses | Other Liabilities | Accrued Expenses | Other Liabilities | Other Current Assets | Other Assets | Other Current Assets | Other Assets | Accrued Expenses | Other Liabilities | Accrued Expenses | Other Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
Contracts designated as cash flow hedges: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | 24.0 | $ | 0.7 | $ | 0.9 | $ | 0.1 | $ | 3.5 | $ | 0.7 | $ | 62.4 | $ | 4.1 | $ | 21.4 | $ | 0.4 | $ | 24.0 | $ | 0.7 | $ | 1.2 | $ | 0.1 | $ | 3.5 | $ | 0.7 | ||||||||||||||||||||||||||||||
Interest rate swap agreements | 1.4 | 0.0 | 1.1 | 1.3 | 1.2 | 1.6 | 0.1 | — | 0.1 | — | 1.4 | — | 5.5 | 0.4 | 1.2 | 1.6 | ||||||||||||||||||||||||||||||||||||||||||||||
Total contracts designated as cash flow hedges | 25.4 | 0.7 | 2.0 | 1.4 | 4.7 | 2.3 | 62.5 | 4.1 | 21.5 | 0.4 | 25.4 | 0.7 | 6.7 | 0.5 | 4.7 | 2.3 | ||||||||||||||||||||||||||||||||||||||||||||||
Undesignated contracts: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency forward exchange contracts | 0.1 | — | 0.5 | — | 2.0 | — | 0.9 | — | 1.5 | — | 0.1 | — | 0.9 | — | 2.0 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 25.5 | $ | 0.7 | $ | 2.5 | $ | 1.4 | $ | 6.7 | $ | 2.3 | $ | 63.4 | $ | 4.1 | $ | 23.0 | $ | 0.4 | $ | 25.5 | $ | 0.7 | $ | 7.6 | $ | 0.5 | $ | 6.7 | $ | 2.3 |
Gain (Loss) Recognized in Other Comprehensive (Loss) Income | ||||||||||||
(In millions) | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | 22.4 | $ | 97.1 | $ | (122.0 | ) | |||||
Interest rate swap agreements | (5.8 | ) | (2.6 | ) | 3.2 | |||||||
Foreign currency borrowings (net investment hedges) | 39.3 | 95.6 | (99.5 | ) | ||||||||
Total | $ | 55.9 | $ | 190.1 | $ | (218.3 | ) |
Gain (Loss) Recognized in Other Comprehensive (Loss) Income | (Loss) Gain Reclassified from AOCL into (Expense) Income | ||||||||||||||||
(In millions) | Location | Amount | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | 97.1 | $ | (122.0 | ) | Cost of goods sold | $ | (11.6 | ) | $ | (13.6 | ) | |||||
Interest rate swap agreements | (2.6 | ) | 3.2 | Interest expense | 1.1 | (6.2 | ) | ||||||||||
Foreign currency borrowings (net investment hedges) | 95.6 | (99.5 | ) | N/A | — | — | |||||||||||
Total | $ | 190.1 | $ | (218.3 | ) | $ | (10.5 | ) | $ | (19.8 | ) |
Amount of Gain (Loss) Reclassified from AOCL into Income (Expense), Consolidated Income Statement Location, and Total Amount of Consolidated Income Statement Line Item | ||||||||||||||||||||||||||
(In millions) | Amount Reclassified | Location | Total Income Statement Amount | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | 23.1 | $ | (11.6 | ) | $ | (13.6 | ) | Cost of goods sold | $ | 4,520.6 | $ | 4,348.5 | $ | 4,020.4 | |||||||||||
Interest rate swap agreements | (1.4 | ) | 1.1 | (6.2 | ) | Interest expense | 120.0 | 120.8 | 128.5 | |||||||||||||||||
Total | $ | 21.7 | $ | (10.5 | ) | $ | (19.8 | ) |
Gain (Loss) Recognized in Income (Expense) | ||||||||||||
(In millions) | 2019 | 2018 | 2017 | |||||||||
Foreign currency forward exchange contracts | $ | 3.4 | $ | (1.5 | ) | $ | (4.6 | ) | ||||
Foreign currency option contracts | — | — | (4.3 | ) |
Loss Recognized in Expense | ||||||||
(In millions) | 2018 | 2017 | ||||||
Foreign currency forward exchange contracts | $ | (1.5 | ) | $ | (4.6 | ) | ||
Foreign currency option contracts | — | (4.3 | ) |
(In millions) | 2019 | 2018 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets: | |||||||||||||||||||||||
Foreign currency forward exchange contracts | N/A | $ | 23.3 | N/A | $ | 23.3 | N/A | $ | 24.8 | N/A | $ | 24.8 | |||||||||||
Interest rate swap agreements | N/A | 0.1 | N/A | 0.1 | N/A | 1.4 | N/A | 1.4 | |||||||||||||||
Total Assets | N/A | $ | 23.4 | N/A | $ | 23.4 | N/A | $ | 26.2 | N/A | $ | 26.2 | |||||||||||
Liabilities: | |||||||||||||||||||||||
Foreign currency forward exchange contracts | N/A | $ | 2.2 | N/A | $ | 2.2 | N/A | $ | 6.2 | N/A | $ | 6.2 | |||||||||||
Interest rate swap agreements | N/A | 5.9 | N/A | 5.9 | N/A | 2.8 | N/A | 2.8 | |||||||||||||||
Total Liabilities | N/A | $ | 8.1 | N/A | $ | 8.1 | N/A | $ | 9.0 | N/A | $ | 9.0 |
(In millions) | 2018 | 2017 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets: | |||||||||||||||||||||||
Foreign currency forward exchange contracts | N/A | $ | 24.8 | N/A | $ | 24.8 | N/A | $ | 1.5 | N/A | $ | 1.5 | |||||||||||
Interest rate swap agreements | N/A | 1.4 | N/A | 1.4 | N/A | 2.4 | N/A | 2.4 | |||||||||||||||
Total Assets | N/A | $ | 26.2 | N/A | $ | 26.2 | N/A | $ | 3.9 | N/A | $ | 3.9 | |||||||||||
Liabilities: | |||||||||||||||||||||||
Foreign currency forward exchange contracts | N/A | $ | 6.2 | N/A | $ | 6.2 | N/A | $ | 67.4 | N/A | $ | 67.4 | |||||||||||
Interest rate swap agreements | N/A | 2.8 | N/A | 2.8 | N/A | 0.1 | N/A | 0.1 | |||||||||||||||
Total Liabilities | N/A | $ | 9.0 | N/A | $ | 9.0 | N/A | $ | 67.5 | N/A | $ | 67.5 |
(In millions) | 2017 | |||
Beginning Balance | $ | 1.6 | ||
Payments | (0.8 | ) | ||
Adjustments included in earnings | (0.8 | ) | ||
Ending Balance | $ | — |
(In millions) | Fair Value Measurement Using | Fair Value As Of Impairment Date | Total Impairments | Fair Value Measurement Using | Fair Value As Of Impairment Date | Total Impairments | |||||||||||||||||||||||||
2019 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
Operating lease right-of-use assets | N/A | N/A | $ | 14.5 | $ | 14.5 | $ | 83.0 | |||||||||||||||||||||||
Property, plant and equipment, net | N/A | N/A | — | — | 26.9 | ||||||||||||||||||||||||||
Other intangible assets, net | N/A | N/A | 87.4 | 87.4 | 116.4 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value As Of Impairment Date | Total Impairments | |||||||||||||||||||||||||||
2018 | N/A | N/A | $ | 0.6 | |||||||||||||||||||||||||||
Property, plant and equipment, net | N/A | N/A | 0.6 | 0.6 | 17.9 | ||||||||||||||||||||||||||
2017 | N/A | N/A | 0.6 | 0.6 | 7.5 | ||||||||||||||||||||||||||
2016 | N/A | N/A | 0.4 | 0.4 | 10.1 | ||||||||||||||||||||||||||
Property, plant and equipment, net | N/A | N/A | 0.6 | 0.6 | 7.5 |
(In millions) | 2019 | 2018 | |||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Cash and cash equivalents | $ | 503.4 | $ | 503.4 | $ | 452.0 | $ | 452.0 | |||||||
Short-term borrowings | 49.6 | 49.6 | 12.8 | 12.8 | |||||||||||
Long-term debt (including portion classified as current) | 2,707.7 | 2,869.7 | 2,819.4 | 2,853.7 |
(In millions) | 2018 | 2017 | |||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Cash and cash equivalents | $ | 452.0 | $ | 452.0 | $ | 493.9 | $ | 493.9 | |||||||
Short-term borrowings | 12.8 | 12.8 | 19.5 | 19.5 | |||||||||||
Long-term debt | 2,819.4 | 2,853.7 | 3,061.3 | 3,140.9 |
– | A plan for certain current and former members of Tommy Hilfiger’s domestic senior management. The plan is frozen and, as a result, participants do not accrue additional benefits. |
– | A capital accumulation program for certain current and former senior executives. Under the individual participants’ agreements, the participants in the program will receive a predetermined amount during the ten years following the attainment of age 65, provided that prior to the termination of employment with the Company, the participant has been in the plan for at least ten years and has attained age 55. |
– | A plan for certain employees resident in the United States who meet certain age and service requirements that provides benefits for compensation in excess of Internal Revenue Service earnings limits and requires payments to vested employees upon, or shortly after, employment termination or retirement. |
Pension Plans | SERP Plans | Postretirement Plans | |||||||||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Balance at beginning of year | $ | 651.0 | $ | 648.0 | $ | 99.2 | $ | 96.9 | $ | 8.4 | $ | 10.5 | |||||||||||
Service cost, net of plan expenses | 31.2 | 31.4 | 5.8 | 5.8 | — | — | |||||||||||||||||
Interest cost | 27.9 | 26.0 | 4.3 | 3.9 | 0.3 | 0.4 | |||||||||||||||||
Benefit payments | (29.2 | ) | (26.0 | ) | (7.9 | ) | (6.1 | ) | — | — | |||||||||||||
Benefit payments, net of retiree contributions | — | — | — | — | (1.0 | ) | (1.4 | ) | |||||||||||||||
Actuarial loss (gain) | 149.2 | (28.4 | ) | 23.1 | (1.3 | ) | 0.5 | (1.1 | ) | ||||||||||||||
Balance at end of year | $ | 830.1 | $ | 651.0 | $ | 124.5 | $ | 99.2 | $ | 8.2 | $ | 8.4 |
Pension Plans | SERP Plans | Postretirement Plans | |||||||||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Balance at beginning of year | $ | 648.0 | $ | 627.5 | $ | 96.9 | $ | 87.6 | $ | 10.5 | $ | 11.4 | |||||||||||
Service cost, net of plan expenses | 31.4 | 26.3 | 5.8 | 4.5 | — | — | |||||||||||||||||
Interest cost | 26.0 | 25.7 | 3.9 | 3.8 | 0.4 | 0.4 | |||||||||||||||||
Benefit payments | (26.0 | ) | (29.4 | ) | (6.1 | ) | (5.1 | ) | — | — | |||||||||||||
Benefit payments, net of retiree contributions | — | — | — | — | (1.4 | ) | (1.6 | ) | |||||||||||||||
Plan curtailments | — | (0.3 | ) | — | — | — | — | ||||||||||||||||
Plan settlements | — | (65.3 | ) | — | — | — | — | ||||||||||||||||
Actuarial (gain) loss | (28.4 | ) | 63.5 | (1.3 | ) | 6.1 | (1.1 | ) | 0.3 | ||||||||||||||
Balance at end of year | $ | 651.0 | $ | 648.0 | $ | 99.2 | $ | 96.9 | $ | 8.4 | $ | 10.5 |
(In millions) | 2019 | 2018 | |||||
Fair value of plan assets at beginning of year | $ | 636.8 | $ | 660.6 | |||
Actual return, net of plan expenses | 112.9 | (7.8 | ) | ||||
Benefit payments | (29.2 | ) | (26.0 | ) | |||
Company contributions | 0.7 | 10.0 | |||||
Fair value of plan assets at end of year | $ | 721.2 | $ | 636.8 | |||
Funded status at end of year | $ | (108.9 | ) | $ | (14.2 | ) |
Pension Plans | SERP Plans | Postretirement Plans | |||||||||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Non-current assets | $ | 1.7 | $ | 1.8 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Current liabilities | — | — | (9.3 | ) | (7.4 | ) | (1.1 | ) | (1.1 | ) | |||||||||||||
Non-current liabilities | (110.6 | ) | (16.0 | ) | (115.2 | ) | (91.8 | ) | (7.1 | ) | (7.3 | ) | |||||||||||
Net amount recognized | $ | (108.9 | ) | $ | (14.2 | ) | $ | (124.5 | ) | $ | (99.2 | ) | $ | (8.2 | ) | $ | (8.4 | ) |
Pension Plans | SERP Plans | Postretirement Plans | ||||||||||||||||||||||||||||||||||
(In millions) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||
Service cost | $ | 33.5 | $ | 33.7 | $ | 27.3 | $ | 5.8 | $ | 5.8 | $ | 4.5 | $ | — | $ | — | $ | — | ||||||||||||||||||
Interest cost | 27.9 | 26.0 | 25.7 | 4.3 | 3.9 | 3.8 | 0.3 | 0.4 | 0.4 | |||||||||||||||||||||||||||
Actuarial loss (gain) | 74.2 | 17.4 | (3.9 | ) | 23.1 | (1.3 | ) | 6.1 | 0.5 | (1.1 | ) | 0.3 | ||||||||||||||||||||||||
Expected return on plan assets | (40.3 | ) | (40.3 | ) | (38.6 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Amortization of prior service cost | — | 0.1 | 0.1 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Curtailment gain | — | — | (0.3 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Settlement loss | — | — | 9.4 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total | $ | 95.3 | $ | 36.9 | $ | 19.7 | $ | 33.2 | $ | 8.4 | $ | 14.4 | $ | 0.8 | $ | (0.7 | ) | $ | 0.7 |
(In millions) | 2018 | 2017 | |||||
Fair value of plan assets at beginning of year | $ | 660.6 | $ | 659.5 | |||
Actual return, net of plan expenses | (7.8 | ) | 95.5 | ||||
Benefit payments | (26.0 | ) | (29.4 | ) | |||
Plan settlements | — | (65.3 | ) | ||||
Company contributions | 10.0 | 0.3 | |||||
Fair value of plan assets at end of year | $ | 636.8 | $ | 660.6 | |||
Funded status at end of year | $ | (14.2 | ) | $ | 12.6 |
Pension Plans | SERP Plans | Postretirement Plans | |||||||||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
Non-current assets | $ | 1.8 | $ | 19.1 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Current liabilities | — | — | (7.4 | ) | (7.4 | ) | (1.1 | ) | (1.4 | ) | |||||||||||||
Non-current liabilities | (16.0 | ) | (6.5 | ) | (91.8 | ) | (89.5 | ) | (7.3 | ) | (9.1 | ) | |||||||||||
Net amount recognized | $ | (14.2 | ) | $ | 12.6 | $ | (99.2 | ) | $ | (96.9 | ) | $ | (8.4 | ) | $ | (10.5 | ) |
Pension Plans | SERP Plans | Postretirement Plans | ||||||||||||||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||
Service cost | $ | 33.7 | $ | 27.3 | $ | 25.2 | $ | 5.8 | $ | 4.5 | $ | 4.4 | $ | — | $ | — | $ | — | ||||||||||||||||||
Interest cost | 26.0 | 25.7 | 29.8 | 3.9 | 3.8 | 3.9 | 0.4 | 0.4 | 0.5 | |||||||||||||||||||||||||||
Actuarial loss (gain) | 17.4 | (3.9 | ) | (35.4 | ) | (1.3 | ) | 6.1 | (0.7 | ) | (1.1 | ) | 0.3 | (3.0 | ) | |||||||||||||||||||||
Expected return on plan assets | (40.3 | ) | (38.6 | ) | (35.9 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Amortization of prior service cost (credit) | 0.1 | 0.1 | 0.0 | — | (0.0 | ) | (0.1 | ) | — | — | (0.3 | ) | ||||||||||||||||||||||||
Curtailment gain | — | (0.3 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Settlement loss | — | 9.4 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total | $ | 36.9 | $ | 19.7 | $ | (16.3 | ) | $ | 8.4 | $ | 14.4 | $ | 7.5 | $ | (0.7 | ) | $ | 0.7 | $ | (2.8 | ) |
Pension Plans | SERP Plans | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Accumulated benefit obligation | $ | 751.3 | $ | 598.9 | $ | 99.9 | $ | 81.5 |
Pension Plans | SERP Plans | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Accumulated benefit obligation | $ | 598.9 | $ | 595.6 | $ | 81.5 | $ | 79.6 |
(In millions, except plan count) | 2018 | 2017 | 2019 | 2018 | ||||||||||
Number of plans with projected benefit obligations in excess of plan assets | 3 | 2 | 3 | 3 | ||||||||||
Aggregate projected benefit obligation | $ | 634.7 | $ | 41.6 | $ | 811.9 | $ | 634.7 | ||||||
Aggregate fair value of related plan assets | $ | 618.8 | $ | 35.1 | $ | 701.3 | $ | 618.8 | ||||||
Number of plans with accumulated benefit obligations in excess of plan assets | 2 | 2 | 3 | 2 | ||||||||||
Aggregate accumulated benefit obligation | $ | 38.5 | $ | 37.4 | $ | 733.3 | $ | 38.5 | ||||||
Aggregate fair value of related plan assets | $ | 38.0 | $ | 35.1 | $ | 701.3 | $ | 38.0 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||
Discount rate (applies to Pension Plans and SERP Plans) | 4.35 | % | 4.08 | % | 4.59 | % | 3.15 | % | 4.35 | % | 4.08 | % | ||||
Discount rate (applies to Postretirement Plans) | 4.16 | % | 3.91 | % | 4.04 | % | 2.70 | % | 4.16 | % | 3.91 | % | ||||
Rate of increase in compensation levels (applies to Pension Plans) | 4.24 | % | 4.24 | % | 4.27 | % | 4.23 | % | 4.24 | % | 4.24 | % | ||||
Expected long-term rate of return on assets (applies to Pension Plans) | 6.50 | % | 6.25 | % | 6.50 | % | 6.25 | % | 6.50 | % | 6.25 | % |
(In millions) | Fair Value Measurements as of February 2, 2020(1) | |||||||||||||||
Asset Category | Total | Quoted Prices In Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
Equity securities: | ||||||||||||||||
United States equities(2) | $ | 182.2 | $ | 182.2 | $ | — | $ | — | ||||||||
International equities(2) | 10.7 | 10.7 | — | — | ||||||||||||
United States equity fund(3) | 66.3 | — | 66.3 | — | ||||||||||||
International equity funds(4) | 135.1 | 65.4 | 69.7 | — | ||||||||||||
Fixed income securities: | ||||||||||||||||
Government securities(5) | 74.0 | — | 74.0 | — | ||||||||||||
Corporate securities(5) | 225.9 | — | 225.9 | — | ||||||||||||
Short-term investment funds(6) | 18.6 | — | 18.6 | — | ||||||||||||
Total return mutual fund(7) | 6.9 | 6.9 | — | — | ||||||||||||
Subtotal | $ | 719.7 | $ | 265.2 | $ | 454.5 | $ | — | ||||||||
Other assets and liabilities(8) | 1.5 | |||||||||||||||
Total | $ | 721.2 |
(In millions) | Fair Value Measurements as of February 3, 2019(1) | |||||||||||||||
Asset Category | Total | Quoted Prices In Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
Equity securities: | ||||||||||||||||
United States equities(2) | $ | 170.9 | $ | 170.9 | $ | — | $ | — | ||||||||
International equities(2) | 12.2 | 12.2 | — | — | ||||||||||||
United States equity fund(3) | 58.9 | — | 58.9 | — | ||||||||||||
International equity funds(4) | 126.5 | 60.3 | 66.2 | — | ||||||||||||
Fixed income securities: | ||||||||||||||||
Government securities(5) | 70.3 | — | 70.3 | — | ||||||||||||
Corporate securities(5) | 173.7 | — | 173.7 | — | ||||||||||||
Short-term investment funds(6) | 16.7 | — | 16.7 | — | ||||||||||||
Total return mutual fund(7) | 6.3 | 6.3 | — | — | ||||||||||||
Subtotal | $ | 635.5 | $ | 249.7 | $ | 385.8 | $ | — | ||||||||
Other assets and liabilities(8) | 1.3 | |||||||||||||||
Total | $ | 636.8 |
(In millions) | Fair Value Measurements as of February 4, 2018(1) | |||||||||||||||
Asset Category | Total | Quoted Prices In Active Markets for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||
Equity securities: | ||||||||||||||||
United States equities(2) | $ | 179.8 | $ | 179.8 | $ | — | $ | — | ||||||||
International equities(2) | 13.0 | 13.0 | — | — | ||||||||||||
United States equity fund(3) | 58.9 | — | 58.9 | — | ||||||||||||
International equity funds(4) | 140.0 | 65.6 | 74.4 | — | ||||||||||||
Fixed income securities: | ||||||||||||||||
Government securities(5) | 58.1 | — | 58.1 | — | ||||||||||||
Corporate securities(5) | 183.3 | — | 183.3 | — | ||||||||||||
Short-term investment funds(6) | 18.4 | — | 18.4 | — | ||||||||||||
Total return mutual fund(7) | 6.6 | 6.6 | — | — | ||||||||||||
Subtotal | $ | 658.1 | $ | 265.0 | $ | 393.1 | $ | — | ||||||||
Other assets and liabilities(8) | 2.5 | |||||||||||||||
Total | $ | 660.6 |
(1) | The Company uses third party pricing services to determine the fair values of the financial instruments held by the |
(2) | Valued at the closing price or unadjusted quoted price in the active market in which the individual securities are traded. |
(3) | Valued at the net asset value of the fund, as determined by a pricing vendor or the fund family. The Company has the ability to redeem this investment at net asset value within the near term and therefore classifies this investment within Level 2. This commingled fund invests in United States large cap equities that track the Russell 1000 Index. |
(4) | Valued at the net asset value of the fund, either as determined by the closing price in the active market in which the individual fund is traded and classified within Level 1, or as determined by a pricing vendor or the fund family and classified within Level 2. This category includes funds that invest in equities of companies outside of the United States. |
(5) | Valued with bid evaluation pricing where the inputs are based on actual trades in active markets, when available, as well as observable market inputs that include actual and comparable trade data, market benchmarks, broker quotes, trading spreads and/or other applicable data. |
(6) | Valued at the net asset value of the funds, as determined by a pricing vendor or the fund family. The Company has the ability to redeem these investments at net asset value within the near term and therefore classifies these investments within Level 2. These funds invest in high-grade, short-term, money market instruments. |
(7) | Valued at the net asset value of |
(8) | This category includes other pension assets and liabilities such as pending trades and accrued income. |
(In millions) | ||||||||||||
Fiscal Year | Pension Plans | SERP Plans | Postretirement Plans | |||||||||
2020 | $ | 37.2 | $ | 9.2 | $ | 1.0 | ||||||
2021 | 39.0 | 10.1 | 1.0 | |||||||||
2022 | 41.1 | 13.3 | 0.9 | |||||||||
2023 | 42.3 | 12.2 | 0.8 | |||||||||
2024 | 44.2 | 10.0 | 0.7 | |||||||||
2025-2029 | 240.6 | 59.1 | 2.7 |
(In millions) | ||||||||||||
Fiscal Year | Pension Plans | SERP Plans | Postretirement Plans | |||||||||
2019 | $ | 25.5 | $ | 7.4 | $ | 1.1 | ||||||
2020 | 26.1 | 8.3 | 1.0 | |||||||||
2021 | 27.0 | 8.8 | 1.0 | |||||||||
2022 | 28.1 | 11.6 | 0.9 | |||||||||
2023 | 29.1 | 10.6 | 0.8 | |||||||||
2024-2028 | 164.1 | 51.1 | 3.1 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||
Weighted average risk-free interest rate | 2.78 | % | 2.10 | % | 1.45 | % | 2.15 | % | 2.78 | % | 2.10 | % | ||||||||||
Weighted average expected stock option term (in years) | 6.25 | 6.25 | 6.25 | 6.25 | 6.25 | 6.25 | ||||||||||||||||
Weighted average Company volatility | 26.92 | % | 29.46 | % | 34.54 | % | 29.88 | % | 26.92 | % | 29.46 | % | ||||||||||
Expected annual dividends per share | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | ||||||||||
Weighted average grant date fair value per stock option | $ | 51.66 | $ | 33.50 | $ | 35.62 | $ | 37.14 | $ | 51.66 | $ | 33.50 |
(In thousands, except years and per stock option data) | Stock Options | Weighted Average Exercise Price Per Stock Option | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||
Outstanding at February 3, 2019 | 791 | $ | 107.81 | 6.1 | $ | 6,568 | ||||||
Granted | 169 | 111.92 | ||||||||||
Exercised | 31 | 77.92 | ||||||||||
Cancelled | 27 | 119.83 | ||||||||||
Outstanding at February 2, 2020 | 902 | $ | 109.25 | 5.9 | $ | 871 | ||||||
Exercisable at February 2, 2020 | 589 | $ | 106.11 | 4.7 | $ | 871 |
(In thousands, except years and per stock option data) | Stock Options | Weighted Average Exercise Price Per Stock Option | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||
Outstanding at February 4, 2018 | 921 | $ | 102.18 | 6.6 | $ | 45,020 | ||||||
Granted | 86 | 158.53 | ||||||||||
Exercised | 200 | 103.04 | ||||||||||
Cancelled | 16 | 116.31 | ||||||||||
Outstanding at February 3, 2019 | 791 | $ | 107.81 | 6.1 | $ | 6,568 | ||||||
Exercisable at February 3, 2019 | 463 | $ | 102.05 | 4.9 | $ | 4,833 |
(In thousands, except per RSU data) | RSUs | Weighted Average Grant Date Fair Value Per RSU | ||||
Non-vested at February 3, 2019 | 847 | $ | 122.97 | |||
Granted | 612 | 110.03 | ||||
Vested | 350 | 116.25 | ||||
Cancelled | 113 | 123.93 | ||||
Non-vested at February 2, 2020 | 996 | $ | 117.28 |
(In thousands, except per RSU data) | RSUs | Weighted Average Grant Date Fair Value Per RSU | ||||
Non-vested at February 4, 2018 | 917 | $ | 103.90 | |||
Granted | 339 | 157.85 | ||||
Vested | 328 | 107.10 | ||||
Cancelled | 81 | 117.28 | ||||
Non-vested at February 3, 2019 | 847 | $ | 122.97 |
2019 | 2018 | 2017 | ||||||||||
Risk-free interest rate | 2.13 | % | 2.62 | % | 1.49 | % | ||||||
Expected Company volatility | 30.25 | % | 29.78 | % | 31.29 | % | ||||||
Expected annual dividends per share | $ | 0.15 | $ | 0.15 | $ | 0.15 | ||||||
Weighted average grant date fair value per PSU | $ | 119.46 | $ | 159.53 | $ | 96.81 |
2018 | 2017 | 2016 | ||||||||||
Risk-free interest rate | 2.62 | % | 1.49 | % | 1.04 | % | ||||||
Expected Company volatility | 29.78 | % | 31.29 | % | 28.33 | % | ||||||
Expected annual dividends per share | $ | 0.15 | $ | 0.15 | $ | 0.15 | ||||||
Weighted average grant date fair value per PSU | $ | 159.53 | $ | 96.81 | $ | 87.16 |
(In thousands, except per PSU data) | PSUs | Weighted Average Grant Date Fair Value Per PSU | ||||
Non-vested at February 3, 2019 | 194 | $ | 106.76 | |||
Granted at target | 72 | 119.46 | ||||
Reduction due to market condition achieved below target | 10 | 87.16 | ||||
Vested | 67 | 87.16 | ||||
Cancelled | 8 | 117.27 | ||||
Non-vested at February 2, 2020 | 181 | $ | 119.63 |
(In thousands, except per PSU data) | PSUs | Weighted Average Grant Date Fair Value Per PSU | ||||
Non-vested at February 4, 2018 | 197 | $ | 93.97 | |||
Granted at target | 44 | 159.53 | ||||
Change due to market condition achieved above target | 32 | 101.23 | ||||
Vested | 78 | 101.23 | ||||
Cancelled | 1 | 143.65 | ||||
Non-vested at February 3, 2019 | 194 | $ | 106.76 |
(In millions) | Foreign currency translation adjustments | Net unrealized and realized gain (loss) on effective cash flow hedges | Total | ||||||||
Balance at January 29, 2017 | $ | (737.7 | ) | $ | 26.9 | $ | (710.8 | ) | |||
Other comprehensive income (loss) before reclassifications | 490.5 | (1)(2) | (116.0 | ) | 374.5 | ||||||
Less: Amounts reclassified from AOCL | — | (16.9 | ) | (16.9 | ) | ||||||
Other comprehensive income (loss) | 490.5 | (99.1 | ) | 391.4 | |||||||
Impact of the U.S. Tax Legislation (4) | (2.2 | ) | 0.1 | (2.1 | ) | ||||||
Balance at February 4, 2018 | $ | (249.4 | ) | $ | (72.1 | ) | $ | (321.5 | ) | ||
Other comprehensive (loss) income before reclassifications | (288.2 | ) | (1)(3) | 92.0 | (196.2 | ) | |||||
Less: Amounts reclassified from AOCL | — | (9.8 | ) | (9.8 | ) | ||||||
Other comprehensive (loss) income | (288.2 | ) | 101.8 | (186.4 | ) | ||||||
Balance at February 3, 2019 | $ | (537.6 | ) | $ | 29.7 | $ | (507.9 | ) | |||
Other comprehensive (loss) income before reclassifications | (128.1 | ) | (1)(3) | 15.9 | (112.2 | ) | |||||
Less: Amounts reclassified from AOCL | — | 20.0 | 20.0 | ||||||||
Other comprehensive loss | (128.1 | ) | (4.1 | ) | (132.2 | ) | |||||
Balance at February 2, 2020 | $ | (665.7 | ) | $ | 25.6 | $ | (640.1 | ) |
(In millions) | Foreign currency translation adjustments | Net unrealized and realized gain (loss) on effective cash flow hedges | Total | ||||||||
Balance at January 29, 2017 | $ | (737.7 | ) | $ | 26.9 | $ | (710.8 | ) | |||
Other comprehensive income (loss) before reclassifications | 490.5 | (1)(2) | (116.0 | ) | 374.5 | ||||||
Less: Amounts reclassified from AOCL | — | (16.9 | ) | (16.9 | ) | ||||||
Other comprehensive income (loss) | 490.5 | (99.1 | ) | 391.4 | |||||||
Impact of the U.S. Tax Legislation (4) | (2.2 | ) | 0.1 | (2.1 | ) | ||||||
Balance at February 4, 2018 | $ | (249.4 | ) | $ | (72.1 | ) | $ | (321.5 | ) | ||
Other comprehensive (loss) income before reclassifications | (288.2 | ) | (1)(3) | 92.0 | (196.2 | ) | |||||
Less: Amounts reclassified from AOCL | — | (9.8 | ) | (9.8 | ) | ||||||
Other comprehensive (loss) income | (288.2 | ) | 101.8 | (186.4 | ) | ||||||
Balance at February 3, 2019 | $ | (537.6 | ) | $ | 29.7 | $ | (507.9 | ) |
(In millions) | Amount Reclassified from AOCL | Affected Line Item in the Company’s Consolidated Income Statements | |||||||
2018 | 2017 | ||||||||
Realized (loss) gain on effective cash flow hedges: | |||||||||
Foreign currency forward exchange contracts (inventory purchases) | $ | (11.6 | ) | $ | (13.6 | ) | Cost of goods sold | ||
Interest rate swap agreements | 1.1 | (6.2 | ) | Interest expense | |||||
Less: Tax effect | (0.7 | ) | (2.9 | ) | Income tax expense (benefit) | ||||
Total, net of tax | $ | (9.8 | ) | $ | (16.9 | ) |
(1) | Foreign currency translation adjustments included a net gain (loss) on net investment hedges of $29.7 million, $73.1 million and $(70.8) million in 2019, 2018 and 2017, respectively. |
(2) | Favorable foreign currency translation adjustments were principally driven by a weakening of the United States dollar against the euro. |
(3) | Unfavorable foreign currency translation adjustments were principally driven by a strengthening of the United States dollar against the euro. |
(4) | The stranded tax effects resulting from the U.S. Tax Legislation were reclassified from AOCL to retained earnings as a result of the Company’s early adoption of an update to accounting guidance in the fourth quarter of 2017. The amount of the reclassification was calculated based on the effect of the change in the United States federal corporate income tax rate on the gross deferred tax amounts at the date of the enactment of the U.S. Tax Legislation related to items that remained in AOCL at that time. |
(In millions) | Amount Reclassified from AOCL | Affected Line Item in the Company’s Consolidated Income Statements | |||||||||||
2019 | 2018 | 2017 | |||||||||||
Realized gain (loss) on effective cash flow hedges: | |||||||||||||
Foreign currency forward exchange contracts (inventory purchases) | 23.1 | (11.6 | ) | (13.6 | ) | Cost of goods sold | |||||||
Interest rate swap agreements | (1.4 | ) | 1.1 | (6.2 | ) | Interest expense | |||||||
Less: Tax effect | 1.7 | (0.7 | ) | (2.9 | ) | Income tax expense (benefit) | |||||||
Total, net of tax | $ | 20.0 | $ | (9.8 | ) | $ | (16.9 | ) |
(In millions) | Line Item in the Company’s Consolidated Income Statement | 2019 | ||||
Finance lease cost: | ||||||
Amortization of right-of-use-assets | SG&A expenses (depreciation and amortization) | $ | 5.3 | |||
Interest on lease liabilities | Interest expense | 0.5 | ||||
Total finance lease cost | 5.8 | |||||
Operating lease cost | SG&A expenses | 459.5 | ||||
Short-term lease cost | SG&A expenses | 25.9 | ||||
Variable lease cost | SG&A expenses | 143.8 | ||||
Less: sublease income | SG&A expenses | (0.4 | ) | |||
Total net lease cost | $ | 634.6 |
(In millions) | Line Item in the Company’s Consolidated Balance Sheet | 2019 | ||||
Right-of-use assets: | ||||||
Operating lease | Operating lease right-of-use assets | $ | 1,675.8 | |||
Finance lease | Property, plant and equipment, net | 12.6 | ||||
$ | 1,688.4 | |||||
Current lease liabilities: | ||||||
Operating lease | Current portion of operating lease liabilities | $ | 363.5 | |||
Finance lease | Accrued expenses | 4.6 | ||||
$ | 368.1 | |||||
Other lease liabilities: | ||||||
Operating lease | Long-term portion of operating lease liabilities | $ | 1,532.0 | |||
Finance lease | Other liabilities | 9.9 | ||||
$ | 1,541.9 |
(In millions) | 2019 | |||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ | 472.8 | ||
Operating cash flows from finance leases | 0.5 | |||
Financing cash flows from finance leases | 5.5 | |||
Non-cash transactions: | ||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 441.3 | |||
Right-of-use assets obtained in exchange for new finance lease liabilities | 3.6 |
2019 | |||
Weighted average remaining lease term (years): | |||
Operating leases | 6.84 | ||
Finance leases | 4.37 | ||
Weighted average discount rate: | |||
Operating leases | 4.25 | % | |
Finance leases | 3.11 | % |
(In millions) | Finance Leases | Operating Leases | Total | |||||||||
2020 | $ | 5.1 | $ | 436.2 | $ | 441.3 | ||||||
2021 | 4.5 | 399.2 | 403.7 | |||||||||
2022 | 2.5 | 323.5 | 326.0 | |||||||||
2023 | 1.0 | 244.2 | 245.2 | |||||||||
2024 | 0.5 | 187.1 | 187.6 | |||||||||
Thereafter | 2.3 | 622.5 | 624.8 | |||||||||
Total lease payments | $ | 15.9 | $ | 2,212.7 | $ | 2,228.6 | ||||||
Less: Interest | (1.4 | ) | (317.2 | ) | (318.6 | ) | ||||||
Total lease liabilities | $ | 14.5 | $ | 1,895.5 | $ | 1,910.0 |
(In millions) | Capital Leases | Operating Leases | Total | |||||||||
2019 | $ | 5.6 | $ | 402.4 | $ | 408.0 | ||||||
2020 | 4.4 | 371.9 | 376.3 | |||||||||
2021 | 3.8 | 314.0 | 317.8 | |||||||||
2022 | 1.8 | 255.0 | 256.8 | |||||||||
2023 | 0.6 | 189.9 | 190.5 | |||||||||
Thereafter | 2.5 | 618.7 | 621.2 | |||||||||
Total minimum lease payments | $ | 18.7 | $ | 2,151.9 | $ | 2,170.6 | ||||||
Less: Amount representing interest | (2.2 | ) | ||||||||||
Present value of net minimum capital lease payments | $ | 16.5 |
(In millions) | 2018 | 2017 | |||||
Minimum | $ | 465.3 | $ | 455.2 | |||
Percentage and other | 128.6 | 103.0 | |||||
Less: Sublease rental income | (1.4 | ) | (1.8 | ) | |||
Total | $ | 592.5 | $ | 556.4 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Minimum | $ | 465.3 | $ | 455.2 | $ | 421.8 | |||||
Percentage and other | 128.6 | 103.0 | 90.9 | ||||||||
Less: Sublease rental income | (1.4 | ) | (1.8 | ) | (4.9 | ) | |||||
Total | $ | 592.5 | $ | 556.4 | $ | 507.8 |
(In millions) | Total Costs Expected to be Incurred | Costs Incurred During 2018 | Costs Incurred During 2018 | Costs Incurred During 2019 | Cumulative Costs Incurred | |||||||||||||
Severance, termination benefits and other employee costs | $ | 65.7 | $ | 27.3 | $ | 27.3 | $ | 25.6 | $ | 52.9 | ||||||||
Long-lived asset impairments | 55.0 | (1) | 6.9 | 6.9 | 38.2 | 45.1 | ||||||||||||
Lease/contract termination and other costs | 45.0 | 4.3 | ||||||||||||||||
Contract termination and other costs | 4.3 | 26.2 | 30.5 | |||||||||||||||
Inventory markdowns | 5.0 | 2.2 | 2.2 | 12.9 | 15.1 | |||||||||||||
Total | $ | 170.7 | $ | 40.7 | $ | 40.7 | $ | 102.9 | $ | 143.6 |
(In millions) | Liability at 2/3/19 | Costs Incurred During 2019 | Costs Paid During 2019 | Liability at 2/2/20 | |||||||||||
Severance, termination benefits and other employee costs | $ | 25.8 | $ | 25.6 | $ | 44.9 | $ | 6.5 | |||||||
Contract termination and other costs | 2.3 | 26.2 | 27.3 | 1.2 | |||||||||||
Total | $ | 28.1 | $ | 51.8 | $ | 72.2 | $ | 7.7 |
(In millions) | Liability at 2/4/18 | Costs Incurred During 2018 | Costs Paid During 2018 | Liability at 2/3/19 | |||||||||||
Severance, termination benefits and other employee costs | $ | — | $ | 27.3 | $ | 1.5 | $ | 25.8 | |||||||
Lease/contract termination and other costs | — | 4.3 | 2.0 | 2.3 | |||||||||||
Total | $ | — | $ | 31.6 | $ | 3.5 | $ | 28.1 |
(In millions, except per share data) | 2019 | 2018 | 2017 | ||||||||
Net income attributable to PVH Corp. | $ | 417.3 | $ | 746.4 | $ | 537.8 | |||||
Weighted average common shares outstanding for basic net income per common share | 74.2 | 76.5 | 77.6 | ||||||||
Weighted average impact of dilutive securities | 0.4 | 0.8 | 1.0 | ||||||||
Total shares for diluted net income per common share | 74.6 | 77.3 | 78.6 | ||||||||
Basic net income per common share attributable to PVH Corp. | $ | 5.63 | $ | 9.75 | $ | 6.93 | |||||
Diluted net income per common share attributable to PVH Corp. | $ | 5.60 | $ | 9.65 | $ | 6.84 |
(In millions, except per share data) | 2018 | 2017 | 2016 | ||||||||
Net income attributable to PVH Corp. | $ | 746.4 | $ | 537.8 | $ | 549.0 | |||||
Weighted average common shares outstanding for basic net income per common share | 76.5 | 77.6 | 80.2 | ||||||||
Weighted average impact of dilutive securities | 0.8 | 1.0 | 0.7 | ||||||||
Total shares for diluted net income per common share | 77.3 | 78.6 | 80.9 | ||||||||
Basic net income per common share attributable to PVH Corp. | $ | 9.75 | $ | 6.93 | $ | 6.84 | |||||
Diluted net income per common share attributable to PVH Corp. | $ | 9.65 | $ | 6.84 | $ | 6.79 |
(In millions) | 2019 | 2018 | 2017 | |||||
Weighted average potentially dilutive securities | 1.1 | 0.4 | 0.5 |
(In millions) | 2018 | 2017 | 2016 | |||||
Weighted average potentially dilutive securities | 0.4 | 0.5 | 0.8 |
(In millions) | 2018 | (1) | 2017 | (1) | 2016 | (1) | 2019 | (1) | 2018 | (1) | 2017 | (1) | ||||||||||||||
Revenue – Tommy Hilfiger North America | ||||||||||||||||||||||||||
Net sales | $ | 1,574.3 | $ | 1,482.2 | $ | 1,502.4 | $ | 1,540.2 | $ | 1,574.3 | $ | 1,482.2 | ||||||||||||||
Royalty revenue | 76.2 | 68.9 | 48.9 | 84.1 | 76.2 | 68.9 | ||||||||||||||||||||
Advertising and other revenue | 18.7 | 16.7 | 12.0 | 23.6 | 18.7 | 16.7 | ||||||||||||||||||||
Total | 1,669.2 | 1,567.8 | 1,563.3 | 1,647.9 | 1,669.2 | 1,567.8 | ||||||||||||||||||||
Revenue – Tommy Hilfiger International | ||||||||||||||||||||||||||
Net sales | 2,599.7 | 2,268.0 | 1,899.4 | 2,994.2 | 2,599.7 | 2,268.0 | ||||||||||||||||||||
Royalty revenue | 52.7 | 47.8 | 44.5 | 49.8 | 52.7 | 47.8 | ||||||||||||||||||||
Advertising and other revenue | 22.9 | 9.6 | 3.6 | 19.8 | 22.9 | 9.6 | ||||||||||||||||||||
Total | 2,675.3 | 2,325.4 | 1,947.5 | 3,063.8 | 2,675.3 | 2,325.4 | ||||||||||||||||||||
Revenue – Calvin Klein North America | ||||||||||||||||||||||||||
Net sales | 1,599.9 | 1,511.3 | 1,513.0 | 1,467.0 | 1,599.9 | 1,511.3 | ||||||||||||||||||||
Royalty revenue | 143.6 | 146.4 | 131.7 | 148.9 | 143.6 | 146.4 | ||||||||||||||||||||
Advertising and other revenue | 49.8 | 50.1 | 45.2 | 53.8 | 49.8 | 50.1 | ||||||||||||||||||||
Total | 1,793.3 | 1,707.8 | 1,689.9 | 1,669.7 | 1,793.3 | 1,707.8 | ||||||||||||||||||||
Revenue – Calvin Klein International | ||||||||||||||||||||||||||
Net sales | 1,827.9 | 1,645.0 | 1,346.2 | 1,896.7 | 1,827.9 | 1,645.0 | ||||||||||||||||||||
Royalty revenue | 78.9 | 80.0 | 72.9 | 74.1 | 78.9 | 80.0 | ||||||||||||||||||||
Advertising and other revenue | 31.1 | 28.8 | 26.2 | 27.3 | 31.1 | 28.8 | ||||||||||||||||||||
Total | 1,937.9 | 1,753.8 | 1,445.3 | 1,998.1 | 1,937.9 | 1,753.8 | ||||||||||||||||||||
Revenue – Heritage Brands Wholesale | ||||||||||||||||||||||||||
Net sales | 1,293.2 | 1,274.4 | 1,271.6 | 1,248.5 | 1,293.2 | 1,274.4 | ||||||||||||||||||||
Royalty revenue | 20.5 | 19.5 | 20.3 | 19.2 | 20.5 | 19.5 | ||||||||||||||||||||
Advertising and other revenue | 3.7 | 3.5 | 3.9 | 4.2 | 3.7 | 3.5 | ||||||||||||||||||||
Total | 1,317.4 | 1,297.4 | 1,295.8 | 1,271.9 | 1,317.4 | 1,297.4 | ||||||||||||||||||||
Revenue – Heritage Brands Retail | ||||||||||||||||||||||||||
Net sales | 259.2 | 258.5 | 258.8 | 253.4 | 259.2 | 258.5 | ||||||||||||||||||||
Royalty revenue | 4.0 | 3.7 | 2.3 | 3.8 | 4.0 | 3.7 | ||||||||||||||||||||
Advertising and other revenue | 0.5 | 0.4 | 0.2 | 0.4 | 0.5 | 0.4 | ||||||||||||||||||||
Total | 263.7 | 262.6 | 261.3 | 257.6 | 263.7 | 262.6 | ||||||||||||||||||||
Total Revenue | ||||||||||||||||||||||||||
Net sales | 9,154.2 | 8,439.4 | 7,791.4 | 9,400.0 | 9,154.2 | 8,439.4 | ||||||||||||||||||||
Royalty revenue | 375.9 | 366.3 | 320.6 | 379.9 | 375.9 | 366.3 | ||||||||||||||||||||
Advertising and other revenue | 126.7 | 109.1 | 91.1 | 129.1 | 126.7 | 109.1 | ||||||||||||||||||||
Total(2) | $ | 9,656.8 | $ | 8,914.8 | $ | 8,203.1 | $ | 9,909.0 | $ | 9,656.8 | $ | 8,914.8 |
(1) | Revenue was impacted by fluctuations of the United States dollar against foreign currencies in which the Company transacts significant levels of business. |
(2) | No single customer accounted for more than 10% of the Company’s revenue in 2019, 2018 |
(In millions) | 2018 | 2017 | 2016 | 2019 | 2018 | 2017 | ||||||||||||||||
Wholesale net sales | $ | 4,969.6 | $ | 4,504.3 | $ | 4,195.9 | $ | 5,066.9 | $ | 4,969.6 | $ | 4,504.3 | ||||||||||
Retail net sales | 4,184.6 | 3,935.1 | 3,595.5 | 4,333.1 | 4,184.6 | 3,935.1 | ||||||||||||||||
Net sales | 9,154.2 | 8,439.4 | 7,791.4 | 9,400.0 | 9,154.2 | 8,439.4 | ||||||||||||||||
Royalty revenue | 375.9 | 366.3 | 320.6 | 379.9 | 375.9 | 366.3 | ||||||||||||||||
Advertising and other revenue | 126.7 | 109.1 | 91.1 | 129.1 | 126.7 | 109.1 | ||||||||||||||||
Total | $ | 9,656.8 | $ | 8,914.8 | $ | 8,203.1 | $ | 9,909.0 | $ | 9,656.8 | $ | 8,914.8 |
(In millions) | 2019 | (1) | 2018 | (1) | 2017 | (1) | |||||||||||
Income before interest and taxes – Tommy Hilfiger North America | $ | 93.5 | (3)(4) | $ | 233.8 | $ | 97.0 | (12)(13)(14) | |||||||||
Income before interest and taxes – Tommy Hilfiger International | 468.2 | (5) | 377.1 | (10) | 221.5 | (10)(12)(13) | |||||||||||
Income before interest and taxes – Calvin Klein North America | 99.8 | (3)(6) | 166.7 | (11) | 184.0 | ||||||||||||
Income before interest and taxes – Calvin Klein International | 153.3 | (3)(5)(6) | 211.5 | (11) | 226.5 | ||||||||||||
(Loss) Income before interest and taxes – Heritage Brands Wholesale | (84.9 | ) | (5)(7) | 83.3 | 96.7 | ||||||||||||
Income before interest and taxes – Heritage Brands Retail | 3.0 | 7.4 | 7.6 | ||||||||||||||
Loss before interest and taxes – Corporate(2) | (174.2 | ) | (5)(8)(9) | (188.1 | ) | (200.9 | ) | (15)(16) | |||||||||
Income before interest and taxes | $ | 558.7 | $ | 891.7 | $ | 632.4 |
(In millions) | 2018 | (1) | 2017 | (1) | 2016 | (1) | |||||||||||
Income before interest and taxes – Tommy Hilfiger North America | $ | 233.8 | $ | 97.0 | (5)(6)(7) | $ | 135.8 | (11) | |||||||||
Income before interest and taxes – Tommy Hilfiger International | 377.1 | (3) | 221.5 | (3)(5)(6) | 328.3 | (12)(13) | |||||||||||
Income before interest and taxes – Calvin Klein North America | 166.7 | (4) | 184.0 | 123.9 | (14) | ||||||||||||
Income before interest and taxes – Calvin Klein International | 211.5 | (4) | 226.5 | 209.6 | |||||||||||||
Income before interest and taxes – Heritage Brands Wholesale | 83.3 | 96.7 | 90.2 | ||||||||||||||
Income before interest and taxes – Heritage Brands Retail | 7.4 | 7.6 | 8.8 | ||||||||||||||
Loss before interest and taxes – Corporate(2) | (188.1 | ) | (200.9 | ) | (8)(9)(10) | (107.4 | ) | (15) | |||||||||
Income before interest and taxes | $ | 891.7 | $ | 632.4 | $ | 789.2 |
(1) | Income (loss) before interest and taxes was impacted by fluctuations of the United States dollar against foreign currencies in which the Company transacts significant levels of business. |
(2) | Includes corporate expenses not allocated to any reportable segments, the Company’s proportionate share of the net income or loss of its investments in Gazal (prior to the Australia acquisition closing) and Karl Lagerfeld, and the results of PVH Ethiopia. Corporate expenses represent overhead operating expenses and include expenses for senior corporate management, corporate finance, information technology related to corporate infrastructure, certain digital investments, certain corporate responsibility initiatives, actuarial gains and losses on the Company’s Pension Plans, SERP Plans and Postretirement Plans, and gains and losses from changes in the fair value of foreign currency option contracts. Actuarial |
(3) | Income before interest and taxes for 2019 included costs of $59.8 million in connection with agreements the Company entered into in 2019 to terminate early the licenses for the global Calvin Klein and Tommy Hilfiger North America socks and hosiery businesses (the “Socks and Hosiery transaction”) in order to consolidate the socks and hosiery businesses for all Company brands in North America in a newly formed joint venture, PVH Legwear, which began operations in December 2019, and to bring in-house the international Calvin Klein socks and hosiery wholesale businesses. Such costs were included in the Company’s segments as follows: $7.5 million in Tommy Hilfiger North America, $25.5 million in Calvin Klein North America and $26.8 million in Calvin Klein International. |
(4) | Income before interest and taxes for 2019 included costs of $54.9 million incurred in connection with the TH U.S. store closures, primarily consisting of noncash lease asset impairments. Please see Note 12, “Fair Value Measurements,” for further discussion. |
(5) | Income (loss) before interest and taxes for 2019 included costs of $19.3 million in connection with the Australia and TH CSAP acquisitions, primarily consisting of noncash valuation adjustments, and one-time costs of $2.1 million recorded on the Company’s equity investments in Gazal and PVH Australia prior to the Australia acquisition closing. Such costs were included in the Company’s segments as follows: $11.1 million in Tommy Hilfiger International, $6.0 million in Calvin Klein International, $1.8 million in Heritage Brands Wholesale and $2.5 million in corporate expenses not allocated to any reportable segments. Please see Note 3, “Acquisitions,” for further discussion. |
(6) | Income before interest and taxes for 2019 included costs of $102.9 million incurred in connection with the Calvin Klein restructuring. Such costs were included in the Company’s segments as follows: $66.0 million in Calvin Klein North America and $36.9 million in Calvin Klein International. Please see Note 18, “Exit Activity Costs,” for further discussion. |
(7) | Loss before interest and taxes for 2019 included a noncash loss of $142.0 million in connection with the Speedo transaction. Please see Note 4, “Assets Held For Sale,” for further discussion. |
(8) | Loss before interest and taxes for 2019 included a noncash gain of $113.1 million to write up the Company’s equity investments in Gazal and PVH Australia to fair value in connection with the Australia acquisition. Please see Note 3, “Acquisitions,” for further discussion. |
(9) | Loss before interest and taxes for 2019 included costs of $6.2 million related to the refinancing of the Company’s senior credit facilities. Please see Note 9, “Debt,” for further discussion. |
(10) | Income before interest and taxes for 2018 and 2017 included costs of $23.6 million and $26.9 million, respectively, associated with the TH China acquisition, primarily consisting of noncash amortization of short-lived assets. |
Income before interest and taxes for 2018 included costs of $40.7 million incurred in connection with the Calvin Klein restructuring. Such costs were included in the Company’s segments as follows: $18.9 million in Calvin Klein North America and $21.8 million in Calvin Klein International. Please see Note |
Income before interest and taxes for 2017 included costs of $82.9 million incurred in connection with an amendment to Mr. Tommy Hilfiger’s employment agreement pursuant to which the Company made a cash buyout of a portion of the future payments to Mr. Hilfiger (the “Mr. Hilfiger amendment”). Such costs were included in the Company’s segments as follows: $34.7 million in Tommy Hilfiger North America and $48.2 million in Tommy Hilfiger International. |
Income before interest and taxes for 2017 included costs of $54.2 million associated with the agreements to restructure the Company’s supply chain relationship with Li & Fung Trading Limited (“Li & Fung”), under which the Company terminated its non-exclusive buying agency agreement with Li & Fung in 2017 (the “Li & Fung termination”). Such costs were included in the Company’s segments as follows: $31.3 million in Tommy Hilfiger North America and $22.9 million in Tommy Hilfiger International. |
Income before interest and taxes for 2017 included costs of $19.2 million associated with the relocation of the Tommy Hilfiger office in New York, including noncash depreciation expense. |
Loss before interest and taxes for 2017 included costs of $23.9 million related to the early redemption of the Company’s $700 million 4 1/2% senior notes due 2022. Please see Note |
Loss before interest and taxes for 2017 included costs of $9.4 million related to the noncash settlement of certain of the Company’s benefit obligations related to its Pension Plans as a result of an annuity purchased for certain participants, under which such obligations were transferred to an insurer. Please see Note |
(In millions) | 2018 | 2017 | 2016 | 2019 | 2018 | 2017 | ||||||||||||||||||||
Identifiable Assets | ||||||||||||||||||||||||||
Tommy Hilfiger North America | $ | 1,330.5 | $ | 1,276.5 | $ | 1,229.8 | $ | 1,599.0 | $ | 1,330.5 | $ | 1,276.5 | ||||||||||||||
Tommy Hilfiger International | 3,949.3 | 4,047.3 | 3,481.3 | 4,888.6 | 3,949.3 | 4,047.3 | ||||||||||||||||||||
Calvin Klein North America | 1,817.9 | 1,836.9 | 1,752.1 | 1,932.3 | 1,817.9 | 1,836.9 | ||||||||||||||||||||
Calvin Klein International | 3,114.9 | 3,138.0 | 2,821.0 | 3,428.9 | 3,114.9 | 3,138.0 | ||||||||||||||||||||
Heritage Brands Wholesale | 1,178.1 | 1,123.5 | 1,203.5 | 1,075.3 | 1,178.1 | 1,123.5 | ||||||||||||||||||||
Heritage Brands Retail | 86.6 | 81.6 | 75.5 | 128.4 | 86.6 | 81.6 | ||||||||||||||||||||
Corporate(2) | 386.4 | 381.9 | 504.7 | |||||||||||||||||||||||
Corporate | 578.5 | 386.4 | 381.9 | |||||||||||||||||||||||
Total | $ | 11,863.7 | $ | 11,885.7 | $ | 11,067.9 | $ | 13,631.0 | $ | 11,863.7 | $ | 11,885.7 | ||||||||||||||
Depreciation and Amortization | ||||||||||||||||||||||||||
Tommy Hilfiger North America | $ | 37.9 | $ | 45.1 | $ | 35.3 | $ | 40.6 | $ | 37.9 | $ | 45.1 | ||||||||||||||
Tommy Hilfiger International | 133.9 | 124.5 | 139.2 | 119.7 | 133.9 | 124.5 | ||||||||||||||||||||
Calvin Klein North America | 41.5 | 43.8 | 47.6 | 38.6 | 41.5 | 43.8 | ||||||||||||||||||||
Calvin Klein International | 90.6 | 83.1 | 70.5 | 91.9 | 90.6 | 83.1 | ||||||||||||||||||||
Heritage Brands Wholesale | 14.9 | 14.3 | 15.6 | 15.1 | 14.9 | 14.3 | ||||||||||||||||||||
Heritage Brands Retail | 5.6 | 5.3 | 5.4 | 6.2 | 5.6 | 5.3 | ||||||||||||||||||||
Corporate | 10.4 | 8.8 | 8.2 | 11.7 | 10.4 | 8.8 | ||||||||||||||||||||
Total | $ | 334.8 | $ | 324.9 | $ | 321.8 | $ | 323.8 | $ | 334.8 | $ | 324.9 | ||||||||||||||
Identifiable Capital Expenditures | ||||||||||||||||||||||||||
Tommy Hilfiger North America | $ | 56.1 | $ | 82.0 | $ | 26.9 | $ | 41.7 | $ | 56.1 | $ | 82.0 | ||||||||||||||
Tommy Hilfiger International | 143.9 | 126.7 | 82.0 | 139.6 | 143.9 | 126.7 | ||||||||||||||||||||
Calvin Klein North America | 36.0 | 36.8 | 39.3 | 30.3 | 36.0 | 36.8 | ||||||||||||||||||||
Calvin Klein International | 102.7 | 96.6 | 79.5 | 83.3 | 102.7 | 96.6 | ||||||||||||||||||||
Heritage Brands Wholesale | 15.8 | 8.0 | 14.1 | 18.6 | 15.8 | 8.0 | ||||||||||||||||||||
Heritage Brands Retail | 8.5 | 4.2 | 7.0 | 6.5 | 8.5 | 4.2 | ||||||||||||||||||||
Corporate | 18.3 | 10.1 | 8.9 | 21.0 | 18.3 | 10.1 | ||||||||||||||||||||
Total | $ | 381.3 | $ | 364.4 | $ | 257.7 | $ | 341.0 | $ | 381.3 | $ | 364.4 |
(1) | Identifiable assets included the impact of changes in foreign currency exchange rates. |
(2) |
(3) | Identifiable assets in 2019 included the impact of the Australia acquisition. Please see Note 3, “Acquisitions,” for a further discussion. |
(4) | Depreciation and amortization in 2018 |
Capital expenditures in 2019 included $39.5 million of accruals that will not be paid until 2020. Capital expenditures in 2018 included $43.7 million of accruals that |
(In millions) | 2018 (1) | 2017 (1) | 2016 (1) | 2019 (1) | 2018 (1) | 2017 (1) | ||||||||||||||||
Domestic | $ | 500.5 | $ | 449.2 | $ | 412.8 | $ | 525.8 | $ | 500.5 | $ | 449.2 | ||||||||||
Canada | 28.8 | 30.0 | 31.0 | 25.3 | 28.8 | 30.0 | ||||||||||||||||
Europe | 362.7 | 325.5 | 230.5 | 375.6 | 362.7 | 325.5 | ||||||||||||||||
Asia | 73.4 | 73.8 | 66.8 | |||||||||||||||||||
Asia-Pacific(2) | 87.6 | 73.4 | 73.8 | |||||||||||||||||||
Other foreign | 19.1 | 21.3 | 18.8 | 12.5 | 19.1 | 21.3 | ||||||||||||||||
Total | $ | 984.5 | $ | 899.8 | $ | 759.9 | $ | 1,026.8 | $ | 984.5 | $ | 899.8 |
(1) | Property, plant and equipment, net included the impact of changes in foreign currency exchange rates. |
(2) | The Company completed the Australia acquisition in the second quarter of 2019. Please see Note 3, “Acquisitions,” for further discussion. |
(In millions) | 2019 (1) | 2018 (1) | 2017 (1) | ||||||||
Domestic | $ | 4,275.0 | $ | 4,481.3 | $ | 4,290.1 | |||||
Canada | 505.5 | 528.8 | 512.2 | ||||||||
Europe | 3,657.3 | 3,362.1 | 2,907.2 | ||||||||
Asia-Pacific(2) | 1,353.4 | 1,163.7 | 1,059.3 | ||||||||
Other foreign | 117.8 | 120.9 | 146.0 | ||||||||
Total | $ | 9,909.0 | $ | 9,656.8 | $ | 8,914.8 |
(In millions) | 2018 (1) | 2017 (1) | 2016 (1) | ||||||||
Domestic | $ | 4,481.3 | $ | 4,290.1 | $ | 4,226.6 | |||||
Canada | 528.8 | 512.2 | 484.5 | ||||||||
Europe | 3,362.1 | 2,907.2 | 2,372.7 | ||||||||
Asia | 1,163.7 | 1,059.3 | 910.4 | ||||||||
Other foreign(2) | 120.9 | 146.0 | 208.9 | ||||||||
Total | $ | 9,656.8 | $ | 8,914.8 | $ | 8,203.1 |
(1) | Revenue was impacted by fluctuations of the United States dollar against foreign currencies in which the Company transacts significant levels of business. |
(2) |
(In millions) | 2019 | 2018 | |||||
Balance at beginning of year | $ | 32.3 | $ | 27.1 | |||
Business acquisitions | 1.4 | — | |||||
Liabilities incurred | 3.9 | 7.4 | |||||
Liabilities settled (payments) | (2.2 | ) | (1.7 | ) | |||
Accretion expense | 0.4 | 0.4 | |||||
Revisions in estimated cash flows | 0.4 | (0.1 | ) | ||||
Currency translation adjustment | (0.5 | ) | (0.8 | ) | |||
Balance at end of year | $ | 35.7 | $ | 32.3 |
(In millions) | 2018 | 2017 | |||||
Balance at beginning of year | $ | 27.1 | $ | 21.8 | |||
Liabilities incurred | 7.4 | 4.1 | |||||
Liabilities settled (payments) | (1.7 | ) | (1.0 | ) | |||
Accretion expense | 0.4 | 0.5 | |||||
Revisions in estimated cash flows | (0.1 | ) | 0.3 | ||||
Currency translation adjustment | (0.8 | ) | 1.4 | ||||
Balance at end of year | $ | 32.3 | $ | 27.1 |
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | ||||||||||||||||||||||||||||
2018 (1) | 2017 (6),(7),(8),(9),(10) | 2018 (1) | 2017 (6),(7),(8) | 2018 (1) | 2017 (6),(7),(8) | 2018 (1),(2),(3),(4),(5) | 2017 (6),(7),(11),(12),(13),(14),(15) | ||||||||||||||||||||||||
Total revenue | $ | 2,314.6 | $ | 1,989.0 | $ | 2,333.7 | $ | 2,069.9 | $ | 2,524.5 | $ | 2,357.0 | $ | 2,484.0 | $ | 2,498.9 | |||||||||||||||
Gross profit | 1,291.0 | 1,080.8 | 1,297.0 | 1,147.3 | 1,364.8 | 1,297.3 | 1,355.5 | 1,369.0 | |||||||||||||||||||||||
Net income | 178.9 | 70.1 | 164.7 | 119.4 | 242.6 | 238.7 | 158.4 | 107.9 | |||||||||||||||||||||||
Net income attributable to PVH Corp. | 179.4 | 70.4 | 165.2 | 119.7 | 243.1 | 239.2 | 158.7 | 108.5 | |||||||||||||||||||||||
Basic net income per common share attributable to PVH Corp. | 2.33 | 0.90 | 2.15 | 1.54 | 3.18 | 3.09 | 2.10 | 1.41 | |||||||||||||||||||||||
Diluted net income per common share attributable to PVH Corp. | 2.29 | 0.89 | 2.12 | 1.52 | 3.15 | 3.05 | 2.09 | 1.39 |
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | ||||||||||||||||||||||||||||
2019 (1),(2),(3) | 2018 (10) | 2019 (1),(4),(5),(6) | 2018 (10) | 2019 (1),(4),(7) | 2018 (10) | 2019 (4),(7),(8),(9) | 2018 (10),(11),(12),(13),(14) | ||||||||||||||||||||||||
Total revenue | $ | 2,356.3 | $ | 2,314.6 | $ | 2,364.2 | $ | 2,333.7 | $ | 2,587.7 | $ | 2,524.5 | $ | 2,600.8 | $ | 2,484.0 | |||||||||||||||
Gross profit | 1,295.9 | 1,291.0 | 1,288.4 | 1,297.0 | 1,406.2 | 1,364.8 | 1,397.9 | 1,355.5 | |||||||||||||||||||||||
Net income (loss) | 81.6 | 178.9 | 193.1 | 164.7 | 208.9 | 242.6 | (68.5 | ) | 158.4 | ||||||||||||||||||||||
Net income (loss) attributable to PVH Corp. | 82.0 | 179.4 | 193.5 | 165.2 | 209.2 | 243.1 | (67.4 | ) | 158.7 | ||||||||||||||||||||||
Basic net income (loss) per common share attributable to PVH Corp. | 1.09 | 2.33 | 2.59 | 2.15 | 2.83 | 3.18 | (0.93 | ) | 2.10 | ||||||||||||||||||||||
Diluted net income (loss) per common share attributable to PVH Corp. | 1.08 | 2.29 | 2.58 | 2.12 | 2.82 | 3.15 | (0.93 | ) | (15) | 2.09 |
(1) | The first, second and third quarters of 2019 included pre-tax costs of $70.3 million, $29.1 million and $3.5 million, respectively, associated with the Calvin Klein restructuring, of which $1.7 million and $11.2 million are included in gross profit in the first and second quarters of 2019, respectively. |
(2) | The first quarter of 2019 included pre-tax costs of $54.9 million in connection with the TH U.S. store closures, primarily consisting of noncash lease asset impairments. |
(3) | The first quarter of 2019 included pre-tax costs of $6.2 million related to the refinancing of the Company’s senior credit facilities. |
(4) | The second, third and fourth quarters of 2019 included pre-tax costs of $4.8 million, $8.6 million and $5.9 million, respectively, associated with the Australia and TH CSAP acquisitions, of which $4.1 million, $6.5 million and $5.9 million, respectively, are included in gross profit. |
(5) | The second quarter of 2019 included a pre-tax noncash gain of $113.1 million to write up the Company’s equity investments in Gazal and PVH Australia to fair value in connection with the Australia acquisition, as well as pre-tax costs of $2.1 million on the Company’s equity investments in Gazal and PVH Australia prior to the Australia acquisition closing. |
(6) | The second quarter of 2019 included pre-tax costs of $59.8 million associated with the Socks and Hosiery transaction. |
(7) | The third and fourth quarters of 2019 included pre-tax interest expense of $2.6 million and $6.0 million, respectively, resulting from the remeasurements of the mandatorily redeemable non-controlling interest that was recognized in connection with the Australia acquisition. |
(8) | The fourth quarter of 2019 included a pre-tax actuarial loss of $97.8 million on the Company’s Pension Plans, SERP Plans and Postretirement Plans. |
(9) | The fourth quarter of 2019 included a pre-tax noncash loss of $142.0 million, as well as a tax benefit of $27.8 million related to the write-off of deferred tax liabilities in connection with the Speedo transaction. |
(10) | The first, second, third and fourth quarters of 2018 included pre-tax costs of $6.9 million, $6.7 million, $6.3 million and $3.7 million, respectively, associated with the TH China acquisition. |
The fourth quarter of 2018 included pre-tax costs of $40.7 million associated with the Calvin Klein restructuring, of which $2.2 million |
The fourth quarter of 2018 included a discrete tax benefit of $41.1 million related to the remeasurement of certain net deferred tax liabilities in connection with the 2019 Dutch Tax Plan. |
The fourth quarter of 2018 included a discrete net tax benefit of $24.7 million related to the U.S. Tax Legislation. |
The fourth quarter of 2018 included a pre-tax actuarial loss of $15.0 million on the Company’s Pension Plans, SERP Plans and Postretirement Plans. |
The |
/s/ EMANUEL CHIRICO | /s/ MICHAEL SHAFFER |
Emanuel Chirico | Michael Shaffer |
Chairman and Chief Executive Officer | Executive Vice President and Chief |
Operating & Financial Officer | |
Wholesale Sales Allowances | ||
Description of the Matter | As discussed in Note 1 to the consolidated financial statements, the Company generates revenue from the wholesale distribution of its products to traditional retailers (including for sale through their digital commerce sites). The amount of revenue recognized is net of sales allowances that the Company offers to its wholesale customers which are estimated based on seasonal negotiations, historical experience and an evaluation of current market conditions. | |
Auditing management’s estimate of wholesale sales allowances was complex and judgmental as it is sensitive to changes in future market or economic conditions and has a direct, material impact on the amount of revenue recognized by the Company. There is also significant estimation to establish sales allowances, based on the Company’s review of the individual customer seasonal negotiations and the expected performance of the products in the customers’ stores. | ||
How we addressed the matter in our audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s process to calculate the wholesale sales allowances, including the consideration of historical experience and current as well as future market conditions. | |
To test the estimate of wholesale sales allowances, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions used by the Company to calculate the projected sales allowance dollars, including seasonal customer negotiations and expected performance of the products. We compared the significant assumptions used by management to current market and economic trends and other relevant factors. We assessed the historical accuracy of management’s estimate and performed sensitivity analyses of significant assumptions to evaluate the changes in the estimate that would result from changes in the assumptions. | ||
Valuation of Goodwill and Indefinite-Lived Intangibles | ||
Description of the Matter | At February 2, 2020, the Company’s goodwill and indefinite-lived intangible assets totaled $3.7 billion and $3.1 billion, respectively. As discussed in Note 1 of the consolidated financial statements, goodwill and indefinite-lived intangible assets are qualitatively tested and quantitatively tested, when necessary, for impairment at least annually. | |
Auditing management’s annual goodwill and indefinite-lived intangible assets impairment test was complex and judgmental due to the significant estimation required to determine the fair value of the reporting units and the fair value of the indefinite-lived intangible assets. In particular, the fair value estimates were sensitive to significant assumptions such as the weighted average cost of capital, revenue growth rate, forecast earnings before interest and taxes and terminal growth rate, which are affected by expectations about future market or economic conditions. | ||
How we addressed the matter in our audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill and indefinite-lived intangible assets impairment review process, including controls over management’s review of the significant assumptions described above. | |
To test the estimated fair value of the Company’s reporting units and indefinite-lived intangible assets, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to current industry and economic trends, changes to the Company’s business, customer base or product mix and other relevant factors. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units and indefinite-lived intangible assets that would result from changes in the assumptions. In addition, we reviewed the reconciliation of the fair value of the reporting units to the market capitalization of the Company. |
Accounting for Acquisition of Gazal | ||
Description of the Matter | On May 31, 2019, the Company acquired for AUD180.5 million (approximately $124.7 million) the approximately 78% interest in Gazal Corporation Limited (Gazal) that it did not already own. As discussed in Note 3 to the consolidated financial statements, PVH Australia came under the Company’s full control as a result of the acquisition, and the transaction was accounted for using the acquisition method of accounting for business combinations. | |
Auditing the Company’s accounting for its acquisition of Gazal was complex due to the significant estimation uncertainty required by management to determine the fair value of the Company’s previously held equity interests, the mandatorily redeemable non-controlling interest and identified intangible assets, which consisted principally of reacquired license rights of $204.9 million, which are indefinite lived, order backlog of $0.3 million and customer relationships of $17.0 million. The significant estimation was primarily due to the sensitivity of the respective fair values to underlying assumptions including the weighted average cost of capital, revenue growth rate, revenue and operating expense volatility, forecast earnings before interest and taxes and terminal growth rate. These assumptions relate to the future performance of the acquired businesses, are forward-looking and could be affected by future economic and market conditions. | ||
How we addressed the matter in our audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to determine the fair value of the previously held equity interests, the mandatorily redeemable non-controlling interest and the identified intangible assets. For example, we tested controls over management’s review of the valuations, including the review of the valuation models and significant assumptions used in the valuations. | |
To test the fair value of the previously held equity interests, the mandatorily redeemable non-controlling interest and the identified intangible assets, our audit procedures included, among others, evaluating the Company's use of valuation methodologies, evaluating the prospective financial information and testing the completeness and accuracy of underlying data. For example, we compared the significant assumptions to current industry, market and economic trends, historical results of the acquired businesses and to other relevant factors. We also performed sensitivity analyses of the significant assumptions to evaluate the change in the fair values resulting from changes in the assumptions. |
2018 (1) | 2017 (2),(6) | 2016 (3),(6) | 2015 (4),(6) | 2014 (5),(6) | 2019 (1) | 2018 (2),(7) | 2017 (3),(6),(7) | 2016 (4),(6),(7) | 2015 (5),(6),(7) | |||||||||||||||||||||||||||||
Summary of Operations | ||||||||||||||||||||||||||||||||||||||
Revenue | $ | 9,656.8 | $ | 8,914.8 | $ | 8,203.1 | $ | 8,020.3 | $ | 8,241.2 | $ | 9,909.0 | $ | 9,656.8 | $ | 8,914.8 | $ | 8,203.1 | $ | 8,020.3 | ||||||||||||||||||
Cost of goods sold, expenses and other income items | 8,765.1 | 8,282.4 | 7,413.9 | 7,259.8 | 7,711.3 | 9,350.3 | 8,765.1 | 8,282.4 | 7,413.9 | 7,259.8 | ||||||||||||||||||||||||||||
Income before interest and taxes | 891.7 | 632.4 | 789.2 | 760.5 | 529.9 | 558.7 | 891.7 | 632.4 | 789.2 | 760.5 | ||||||||||||||||||||||||||||
Interest expense, net | 116.1 | 122.2 | 115.0 | 113.0 | 138.5 | 114.7 | 116.1 | 122.2 | 115.0 | 113.0 | ||||||||||||||||||||||||||||
Income tax expense (benefit) | 31.0 | (25.9 | ) | 125.5 | 75.1 | (47.5 | ) | 28.9 | 31.0 | (25.9 | ) | 125.5 | 75.1 | |||||||||||||||||||||||||
Net loss attributable to redeemable non-controlling interest | (1.8 | ) | (1.7 | ) | (0.3 | ) | — | (0.1 | ) | (2.2 | ) | (1.8 | ) | (1.7 | ) | (0.3 | ) | — | ||||||||||||||||||||
Net income attributable to PVH Corp. | $ | 746.4 | $ | 537.8 | $ | 549.0 | $ | 572.4 | $ | 439.0 | $ | 417.3 | $ | 746.4 | $ | 537.8 | $ | 549.0 | $ | 572.4 | ||||||||||||||||||
Per Share Statistics | ||||||||||||||||||||||||||||||||||||||
Basic net income per common share attributable to PVH Corp. | $ | 9.75 | $ | 6.93 | $ | 6.84 | $ | 6.95 | $ | 5.33 | $ | 5.63 | $ | 9.75 | $ | 6.93 | $ | 6.84 | $ | 6.95 | ||||||||||||||||||
Diluted net income per common share attributable to PVH Corp. | 9.65 | 6.84 | 6.79 | 6.89 | 5.27 | 5.60 | 9.65 | 6.84 | 6.79 | 6.89 | ||||||||||||||||||||||||||||
Dividends paid per common share | 0.15 | 0.15 | 0.15 | 0.15 | 0.15 | 0.15 | 0.15 | 0.15 | 0.15 | 0.15 | ||||||||||||||||||||||||||||
Stockholders’ equity per common share | 77.29 | 71.73 | 61.16 | 55.86 | 52.89 | 80.39 | 77.29 | 71.73 | 61.16 | 55.86 | ||||||||||||||||||||||||||||
Financial Position | ||||||||||||||||||||||||||||||||||||||
Current assets | $ | 3,238.6 | $ | 3,030.8 | $ | 2,879.6 | $ | 2,804.5 | $ | 2,777.7 | $ | 3,394.2 | $ | 3,238.6 | $ | 3,030.8 | $ | 2,879.6 | $ | 2,804.5 | ||||||||||||||||||
Current liabilities (including short-term borrowings and current portion of long-term debt) | 1,893.9 | 1,871.6 | 1,564.8 | 1,527.2 | 1,428.1 | 2,361.1 | 1,893.9 | 1,871.6 | 1,564.8 | 1,527.2 | ||||||||||||||||||||||||||||
Working capital | 1,344.7 | 1,159.2 | 1,314.8 | 1,277.3 | 1,349.6 | 1,033.1 | 1,344.7 | 1,159.2 | 1,314.8 | 1,277.3 | ||||||||||||||||||||||||||||
Total assets | 11,863.7 | 11,885.7 | 11,067.9 | 10,673.8 | 10,796.6 | 13,631.0 | 11,863.7 | 11,885.7 | 11,067.9 | 10,673.8 | ||||||||||||||||||||||||||||
Capital leases | 16.5 | 16.0 | 16.4 | 14.6 | 18.1 | |||||||||||||||||||||||||||||||||
Finance leases | 14.5 | 16.5 | 16.0 | 16.4 | 14.6 | |||||||||||||||||||||||||||||||||
Long-term debt | 2,819.4 | 3,061.3 | 3,197.3 | 3,031.7 | 3,410.4 | 2,693.9 | 2,819.4 | 3,061.3 | 3,197.3 | 3,031.7 | ||||||||||||||||||||||||||||
Stockholders’ equity | 5,827.8 | 5,536.4 | 4,804.5 | 4,552.3 | 4,364.3 | 5,811.5 | 5,827.8 | 5,536.4 | 4,804.5 | 4,552.3 | ||||||||||||||||||||||||||||
Other Statistics | ||||||||||||||||||||||||||||||||||||||
Total debt to total capital | 32.8 | % | 35.9 | % | 40.2 | % | 41.3 | % | 44.8 | % | 32.3 | % | 32.8 | % | 35.9 | % | 40.2 | % | 41.3 | % | ||||||||||||||||||
Net debt to net capital | 29.1 | % | 32.0 | % | 34.2 | % | 36.8 | % | 41.2 | % | 28.1 | % | 29.1 | % | 32.0 | % | 34.2 | % | 36.8 | % | ||||||||||||||||||
Current ratio | 1.7 | 1.6 | 1.8 | 1.8 | 1.9 | 1.4 | 1.7 | 1.6 | 1.8 | 1.8 |
(1) | 2019 includes (a) pre-tax costs of $102.9 million associated with the Calvin Klein restructuring; (b) a pre-tax noncash loss of $142.0 million in connection with the Speedo transaction; (c) a pre-tax noncash gain of $113.1 million to write up the Company’s equity investments in Gazal and PVH Australia to fair value in connection with the Australia acquisition, partially offset by pre-tax acquisition related costs of $19.3 million associated with the Australia and TH CSAP acquisitions, consisting of noncash valuation adjustments, and a one-time cost of $2.1 million recorded on the Company’s equity investments in Gazal and PVH Australia prior to the Australia acquisition closing; (d) pre-tax costs of $59.8 million associated with the Socks and Hosiery transaction; (e) pre-tax costs of $54.9 million associated with the TH U.S. store closures, primarily consisting of noncash lease asset impairments; (f) pre-tax costs of $6.2 million associated with the refinancing of the Company’s senior credit facilities; (g) a pre-tax actuarial loss of $97.8 million on the Company’s Pension Plans, SERP Plans and Postretirement Plans; (h) pre-tax interest expense of $8.6 million resulting from the remeasurements of the mandatorily redeemable non-controlling interest that was recognized in connection with the Australia acquisition; and (i) a discrete tax benefit of $27.8 million related to the write-off of deferred tax liabilities in connection with the Speedo transaction. |
(2) | 2018 includes (a) pre-tax costs of $40.7 million associated with the Calvin Klein restructuring; (b) pre-tax costs of $23.6 million associated with the TH China acquisition, consisting of noncash amortization of short-lived assets; (c) a pre-tax actuarial loss of $15.0 million on the Company’s Pension Plans, SERP Plans and Postretirement Plans; (d) a discrete net tax benefit of $24.7 million related to the U.S. Tax Legislation; and (e) a discrete tax benefit of $41.1 million related to the remeasurement of certain net deferred tax liabilities in connection with the 2019 Dutch Tax Plan. |
2017 includes (a) pre-tax costs of $82.9 million associated with the Mr. Hilfiger amendment; (b) pre-tax costs of $54.2 million associated with the Li & Fung termination; (c) pre-tax costs of $23.9 million associated with the early redemption of the Company’s $700 million 4 1/2% senior notes due 2022; (d) pre-tax costs of $26.9 million associated with the TH China acquisition, primarily consisting of noncash amortization of short-lived assets; (e) pre-tax costs of $19.2 million associated with relocation of the Tommy Hilfiger office in New York, including noncash depreciation expense; (f) pre-tax costs of $9.4 million associated with the noncash |
2016 includes (a) a pre-tax noncash gain of $153.1 million to write up the Company’s equity investment in TH China to fair value in connection with the TH China acquisition, partially offset by pre-tax acquisition related costs of $76.9 million, primarily consisting of valuation adjustments and amortization of short-lived assets, and a one-time cost of $5.9 million recorded on the Company’s equity investment in TH China; (b) pre-tax costs of $15.8 million associated with the Company’s amendment of its prior 2014 senior secured credit facilities; (c) a pre-tax noncash loss of $81.8 million recorded in connection with the deconsolidation of the Mexico |
2015 includes (a) pre-tax costs of $73.4 million associated with the integration of Warnaco and the related restructuring; (b) pre-tax costs of $10.3 million related to the operation of and exit from the Izod retail business; (c) pre-tax costs of $16.5 million principally related to the discontinuation of several licensed product lines in the Heritage Brands dress furnishings business; and (d) a pre-tax actuarial gain of $20.2 million on the Company’s Pension Plans, SERP Plans and Postretirement Plans. |
(6) | The Company adopted the update to accounting guidance related to revenue recognition in 2018 |
(7) | The Company adopted the update to accounting guidance related to leases in 2019 using the modified retrospective approach applied as of the period of adoption with a cumulative-effect adjustment to opening retained earnings and as such, prior periods have not been restated. Upon adoption, the Company (i) recognized operating lease right-of-use assets of $1.7 billion and lease liabilities of $1.9 billion, (ii) recorded a cumulative-effect adjustment to retained earnings of $3.1 million and (iii) recorded other reclassification adjustments within its Consolidated Balance Sheet related to, among other things, deferred rent. Please see Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of this report for further discussion. |
Total capital equals total debt (including |
Net debt equals total debt (including |
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions Charged to Costs and Expenses | Additions Charged to Other Accounts | |||||||||||||||||||
Balance at Beginning of Period | Balance at End of Period | |||||||||||||||||||
Description | Deductions | (1) | ||||||||||||||||||
Year Ended February 2, 2020 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 21.6 | $ | 5.7 | $ | — | $ | 6.2 | (2) | $ | 21.1 | |||||||||
Allowance/accrual for operational chargebacks and customer markdowns | 226.8 | 529.3 | — | 535.9 | 220.2 | |||||||||||||||
Valuation allowance for deferred income tax assets | 62.6 | 17.1 | — | 9.9 | 69.8 | |||||||||||||||
Year Ended February 3, 2019 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 21.1 | $ | 14.2 | $ | — | $ | 13.7 | (2) | $ | 21.6 | |||||||||
Allowance/accrual for operational chargebacks and customer markdowns | 271.0 | 403.8 | — | 448.0 | 226.8 | |||||||||||||||
Valuation allowance for deferred income tax assets | 106.3 | 12.9 | — | 56.6 | (3) | 62.6 | ||||||||||||||
Year Ended February 4, 2018 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 15.0 | $ | 7.5 | $ | — | $ | 1.4 | (2) | $ | 21.1 | |||||||||
Allowance/accrual for operational chargebacks and customer markdowns | 289.5 | 498.2 | — | 516.7 | 271.0 | |||||||||||||||
Valuation allowance for deferred income tax assets | 43.9 | 64.3 | (4) | 1.9 | 3.8 | 106.3 |
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions Charged to Costs and Expenses | Additions Charged to Other Accounts | |||||||||||||||||||
Balance at Beginning of Period | Balance at End of Period | |||||||||||||||||||
Description | Deductions | (1) | ||||||||||||||||||
Year Ended February 3, 2019 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 21.1 | $ | 14.2 | $ | — | $ | 13.7 | (2) | $ | 21.6 | |||||||||
Allowance/accrual for operational chargebacks and customer markdowns | 271.0 | 403.8 | — | 448.0 | 226.8 | |||||||||||||||
Valuation allowance for deferred income tax assets | 106.3 | 12.9 | — | 56.6 | (3) | 62.6 | ||||||||||||||
Year Ended February 4, 2018 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 15.0 | $ | 7.5 | $ | — | $ | 1.4 | (2) | $ | 21.1 | |||||||||
Allowance/accrual for operational chargebacks and customer markdowns | 289.5 | 498.2 | — | 516.7 | 271.0 | |||||||||||||||
Valuation allowance for deferred income tax assets | 43.9 | 64.3 | (4) | 1.9 | 3.8 | 106.3 | ||||||||||||||
Year Ended January 29, 2017 | ||||||||||||||||||||
Allowance for doubtful accounts | $ | 18.1 | $ | 6.1 | $ | — | $ | 9.2 | (2) | $ | 15.0 | |||||||||
Allowance/accrual for operational chargebacks and customer markdowns | 291.9 | 551.0 | — | 553.4 | (5) | 289.5 | ||||||||||||||
Valuation allowance for deferred income tax assets | 43.8 | 6.0 | — | 5.9 | 43.9 |
(1) | Includes changes due to foreign currency translation. |
(2) | Principally accounts written off as uncollectible, net of recoveries. |
(3) | Includes the release of a $26.3 million valuation allowance on the Company’s foreign tax credits to adjust the provisional amount recorded in 2017 as a result of the U.S. Tax Legislation. |
(4) | Includes the recognition of a $38.5 million provisional valuation allowance on the Company’s foreign tax credits as a result of the U.S. Tax Legislation. |