UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended		October ~~31, 2021~~30, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number 001-07572


PVH CORP.
(Exact name of registrant as specified in its charter)

Delaware

13-1166910

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

~~200~~285 Madison Avenue,

New York,

New York

~~10016~~10017

(Address of principal executive offices)

(Zip Code)

(212) 381-3500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1.00 par value	PVH	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding shares of common stock of the registrant as of ~~December 1, 2021~~November 30, 2022 was ~~69,977,635.~~63,371,388.

PVH CORP.

INDEX

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking statements in this Quarterly Report on Form 10-Q, including, without limitation, statements relating to our future revenue, earnings and cash flows, plans, strategies, objectives, expectations and intentions are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated, including, without limitation, (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our ability to realize anticipated benefits and savings from ~~restructuring~~divestitures, restructurings and similar plans, such as the ~~workforce reductions~~headcount cost reduction initiative announced in ~~North America and certain international markets,~~August 2022, and the ~~reductions in~~2021 sale of assets of, and exit from, our ~~office~~Heritage Brands business to focus on our Calvin Klein and ~~store real estate footprint, all as previously announced;~~Tommy Hilfiger businesses; (iii) we ~~may be considered to be highly leveraged~~have significant levels of outstanding debt and borrowing capacity and we use a significant portion of our cash flows to service our indebtedness, as a result of which we might not have sufficient funds to operate our businesses in the manner we intend or have operated in the past; (iv) the levels of sales of our apparel, footwear and related products, both to our wholesale customers and in our retail stores and our directly operated digital commerce sites, the levels of sales of our licensees at wholesale and retail, and the extent of discounts and promotional pricing in which we and our licensees and other business partners are required to engage, all of which can be affected by weather conditions, changes in the economy (including inflationary pressures like those currently being seen globally), fuel prices, reductions in travel, fashion trends, consolidations, repositionings and bankruptcies in the retail industries, ~~repositionings of brands by our licensors,~~ consumer sentiment and other factors; (v) our ability to manage our growth and inventory; (vi) quota restrictions, the imposition of safeguard controls and the imposition of new or increased duties or tariffs on goods from the countries where we or our licensees produce goods under our trademarks, any of which, among other things, could limit the ability to produce products in cost-effective countries, or in countries that have the labor and technical expertise needed, or require us to absorb costs or try to pass costs onto consumers, which could materially impact our revenue and profitability; (vii) the availability and cost of raw materials; (viii) our ability to adjust timely to changes in trade regulations and the migration and development of manufacturers (which can affect where our products can best be produced); (ix) the regulation or prohibition of the transaction of business with specific individuals or entities and their affiliates or goods manufactured in (or containing raw materials or components from) certain regions, such as the listing of a person or entity as a Specially Designated National or Blocked Person by the U.S. Department of the Treasury’s Office of Foreign Assets Control and the issuance of Withhold Release Orders by the U.S. Customs and Border ~~Patrol;~~Protection; (x) changes in available factory and shipping capacity, wage and shipping cost escalation, and store closures in any of the countries where our licensees’ or wholesale customers’ or other business partners’ stores or our stores are located or products are sold or produced or are planned to be sold or produced, as a result of civil conflict, war or terrorist acts, the threat of any of the foregoing, or political or labor instability, such as the current war in ~~any~~Ukraine that has led to our decision to exit from our Russia business, including the closure of our retail stores in Russia and the ~~countries where~~cessation of our orwholesale operations in Russia and Belarus, and the temporary cessation of business by many of our ~~licensees’ or other~~ business ~~partners’ products are sold, produced or are planned to be sold or produced;~~partners in Ukraine; (xi) disease epidemics and health-related concerns, such as the ongoing COVID-19 pandemic, which could result in (and, in the case of the COVID-19 pandemic, has resulted in some of the following) supply-chain disruptions due to closed factories, reduced workforces and production capacity, ~~scarcity of raw materials and scrutiny or embargoing of goods produced in affected areas,~~ shipping delays, container and trucker shortages, port congestion and other logistics problems, closed stores, and reduced consumer traffic and purchasing, ~~as consumers become ill or limit or cease shopping in order to avoid exposure,~~ or governments implement mandatory business closures, travel restrictions or the like, ~~to prevent the spread of disease,~~ and market or other changes that could result (or, with respect to the COVID-19 pandemic, could continue to result) in shortages of inventory available to be delivered to our stores and customers, order cancellations and lost sales, as well as in noncash impairments of ~~the Company’s~~our goodwill and other intangible assets, operating lease right-of-use assets, and property, plant and equipment; (xii) ~~acquisitions~~actions taken towards sustainability and ~~divestitures~~social and ~~issues arising with acquisitions, divestitures~~environmental responsibility as part of our sustainability and ~~proposed transactions, including, without limitation, the ability~~social and environmental strategy, may not be achieved or may be perceived to ~~realize the strategic benefits of transactions (such~~be falsely claimed, which could diminish consumer trust in our brands, as well as our sale of certain intellectual property and other assets of, and exiting from, our Heritage Brands business to focus on our Calvin Klein and Tommy Hilfiger businesses), the ability to integrate an acquired entity or business into us with no substantial adverse effect on the acquired entity’s, the acquired business’s or our existing operations, employee relationships, vendor relationships, customer relationships or financial performance, and the ability to operate effectively and profitably our continuing businesses after the sale or other disposal of a subsidiary, business or the assets thereof;brands’ value; (xiii) the failure of our licensees to market successfully licensed products or to preserve the value of our brands, or their misuse of our brands; (xiv) significant fluctuations of the U.S. dollar against foreign currencies in which we transact significant levels of business; (xv) our retirement plan expenses recorded throughout the year are calculated using actuarial valuations that incorporate assumptions and estimates about financial market, economic and demographic conditions, and differences between estimated and actual results give rise to gains and losses, which can be significant, that are recorded immediately in earnings, generally in the fourth quarter of the year; (xvi) the impact of new and revised tax legislation and regulations; and (xvii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

We do not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimate regarding revenue, earnings or cash flows, whether as a result of the receipt of new information, future events or otherwise.

PART I -- FINANCIAL INFORMATION


Item 1 - Financial Statements

Consolidated Statements of Operations for the Thirteen and T ~~hirty~~-~~Nine~~Thirty-Nine Weeks Ended October 3 ~~1, 2021~~ 30, 2022 and ~~November 1,~~ ~~2020~~October 31, 2021			1

Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~ for the Thirteen and Thirty-Nine Weeks Ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~			2

Consolidated Balance Sheets as of October 30, 2022, January 30, 2022 and October 31, 2021 ~~January 31, 2021 and November 1, 2020~~			3

Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~			4

Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Non-Controlling Interest for the Thirty-Nine Weeks Ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~			5

Notes to Consolidated Financial Statements			7

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations			44

Item 3 - Quantitative and Qualitative Disclosures About Market Risk			6260

Item 4 - Controls and Procedures			6462

PART II -- OTHER INFORMATION


Item 1 - Legal Proceedings			6563

Item 1A - Risk Factors			6563

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds			6563

Item 6 - Exhibits			6664

Signatures			6866

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

PVH Corp.

Consolidated Statements of Operations

Unaudited

(In millions, except per share data)


		Thirteen Weeks Ended				Thirty-Nine Weeks Ended					Thirteen Weeks Ended				Thirty-Nine Weeks Ended
		October 31,		November 1,		October 31,		November 1,			October 30,		October 31,		October 30,		October 31,
		2021		2020		2021		2020			2022		2021		2022		2021
Net sales	Net sales	$	2,208.0	$	2,014.3	$	6,410.0	$	4,802.7	Net sales	$	2,144.7	$	2,208.0	$	6,182.4	$	6,410.0
Royalty revenue	Royalty revenue	97.4		79.7		248.0		185.7		Royalty revenue	105.4		97.4		273.7		248.0
Advertising and other revenue	Advertising and other revenue	27.1		24.1		67.0		54.4		Advertising and other revenue	30.7		27.1		79.4		67.0
Total revenue	Total revenue	2,332.5		2,118.1		6,725.0		5,042.8		Total revenue	2,280.8		2,332.5		6,535.5		6,725.0
Cost of goods sold (exclusive of depreciation and amortization)	Cost of goods sold (exclusive of depreciation and amortization)	987.4		1,016.8		2,817.2		2,392.3		Cost of goods sold (exclusive of depreciation and amortization)	1,006.6		987.4		2,803.1		2,817.2
Gross profit	Gross profit	1,345.1		1,101.3		3,907.8		2,650.5		Gross profit	1,274.2		1,345.1		3,732.4		3,907.8
Selling, general and administrative expenses	Selling, general and administrative expenses	1,097.3		987.2		3,198.7		2,809.5		Selling, general and administrative expenses	1,085.0		1,097.3		3,194.8		3,198.7
Goodwill and other intangible asset impairments		—		—		—		933.5
Goodwill impairment										Goodwill impairment	417.1		—		417.1		—
Non-service related pension and postretirement income	Non-service related pension and postretirement income	(4.2)		(3.6)		(11.5)		(7.9)		Non-service related pension and postretirement income	(3.4)		(4.2)		(10.2)		(11.5)
Other (gain) loss, net		(118.9)		—		(118.9)		3.1
Equity in net income (loss) of unconsolidated affiliates		6.3		4.4		14.1		(10.3)
Income (loss) before interest and taxes		377.2		122.1		853.6		(1,098.0)
Other gain										Other gain	—		(118.9)		—		(118.9)
Equity in net income of unconsolidated affiliates										Equity in net income of unconsolidated affiliates	10.5		6.3		42.6		14.1
(Loss) income before interest and taxes										(Loss) income before interest and taxes	(214.0)		377.2		173.3		853.6
Interest expense	Interest expense	25.9		34.4		83.7		89.6		Interest expense	21.1		25.9		65.9		83.7
Interest income	Interest income	1.3		0.9		3.4		2.8		Interest income	2.3		1.3		5.0		3.4
Income (loss) before taxes		352.6		88.6		773.3		(1,184.8)
Income tax expense (benefit)		72.9		19.1		212.1		(105.4)
Net income (loss)		279.7		69.5		561.2		(1,079.4)
(Loss) income before taxes										(Loss) income before taxes	(232.8)		352.6		112.4		773.3
Income tax (benefit) expense										Income tax (benefit) expense	(46.1)		72.9		50.7		212.1
Net (loss) income										Net (loss) income	(186.7)		279.7		61.7		561.2
Less: Net loss attributable to redeemable non-controlling interest	Less: Net loss attributable to redeemable non-controlling interest	—		(0.3)		(0.3)		(1.0)		Less: Net loss attributable to redeemable non-controlling interest	—		—		—		(0.3)
Net income (loss) attributable to PVH Corp.		$	279.7	$	69.8	$	561.5	$	(1,078.4)
Basic net income (loss) per common share attributable to PVH Corp.		$	3.94	$	0.98	$	7.89	$	(15.15)
Diluted net income (loss) per common share attributable to PVH Corp.		$	3.89	$	0.98	$	7.77	$	(15.15)
Net (loss) income attributable to PVH Corp.										Net (loss) income attributable to PVH Corp.	$	(186.7)	$	279.7	$	61.7	$	561.5
Basic net (loss) income per common share attributable to PVH Corp.										Basic net (loss) income per common share attributable to PVH Corp.	$	(2.88)	$	3.94	$	0.93	$	7.89
Diluted net (loss) income per common share attributable to PVH Corp.										Diluted net (loss) income per common share attributable to PVH Corp.	$	(2.88)	$	3.89	$	0.92	$	7.77

See accompanying notes.

PVH Corp.

Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~

Unaudited

(In millions)

Thirteen Weeks Ended Thirty-Nine Weeks Ended
October 31, November 1, October 31, November 1,
2021 2020 2021 2020
Net income (loss) $ 279.7 $ 69.5 $ 561.2 $ (1,079.4)
Other comprehensive (loss) income:
Foreign currency translation adjustments (55.6) (14.6) (121.0) 116.2
Net unrealized and realized gain (loss) related to effective cash flow hedges, net of tax expense (benefit) of $3.1, $1.2, $10.5 and $(0.4) 22.8 10.2 74.4 (32.8)
Net gain (loss) on net investment hedges, net of tax expense (benefit) of $6.7, $4.0, $13.4 and $(18.6) 20.7 12.7 41.3 (57.6)
Total other comprehensive (loss) income (12.1) 8.3 (5.3) 25.8
Comprehensive income (loss) 267.6 77.8 555.9 (1,053.6)
Less: Comprehensive loss attributable to redeemable non-controlling interest — (0.3) (0.3) (1.0)
Comprehensive income (loss) attributable to PVH Corp. $ 267.6 $ 78.1 $ 556.2 $ (1,052.6)


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 30,		October 31,		October 30,		October 31,
	2022		2021		2022		2021

Net (loss) income	$	(186.7)	$	279.7	$	61.7	$	561.2
Other comprehensive (loss) income:
Foreign currency translation adjustments	(134.1)		(55.6)		(357.9)		(121.0)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $4.1, $3.1, $14.9, and $10.5	10.4		22.8		41.7		74.4
Net gain on net investment hedges, net of tax expense of $6.8, $6.7, $33.0, and $13.4	20.8		20.7		99.6		41.3
Total other comprehensive loss	(102.9)		(12.1)		(216.6)		(5.3)
Comprehensive (loss) income	(289.6)		267.6		(154.9)		555.9
Less: Comprehensive loss attributable to redeemable non-controlling interest	—		—		—		(0.3)
Comprehensive (loss) income attributable to PVH Corp.	$	(289.6)	$	267.6	$	(154.9)	$	556.2

See accompanying notes.

PVH Corp.

Consolidated Balance Sheets

(In millions, except share and per share data)


		October 31,		January 31,		November 1,			October 30,		January 30,		October 31,
		2021		2021		2020			2022		2022		2021
		UNAUDITED		AUDITED		UNAUDITED			UNAUDITED		AUDITED		UNAUDITED
ASSETS	ASSETS							ASSETS
Current Assets:	Current Assets:							Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,298.7	$	1,651.4	$	1,460.0	Cash and cash equivalents	$	457.0	$	1,242.5	$	1,298.7
Trade receivables, net of allowances for credit losses of $64.3, $69.6 and $76.8		906.8		641.5		799.2
Trade receivables, net of allowances for credit losses of $50.9, $61.9 and $64.3								Trade receivables, net of allowances for credit losses of $50.9, $61.9 and $64.3	979.5		745.2		906.8
Other receivables	Other receivables	29.8		25.1		19.5		Other receivables	22.8		20.1		29.8
Inventories, net	Inventories, net	1,379.6		1,417.1		1,483.5		Inventories, net	1,821.2		1,348.5		1,379.6
Prepaid expenses	Prepaid expenses	149.8		158.2		136.4		Prepaid expenses	210.4		169.0		149.8
Other	Other	94.2		50.4		69.3		Other	163.8		128.4		94.2

Total Current Assets	Total Current Assets	3,858.9		3,943.7		3,967.9		Total Current Assets	3,654.7		3,653.7		3,858.9
Property, Plant and Equipment, net	Property, Plant and Equipment, net	897.1		942.7		953.2		Property, Plant and Equipment, net	844.6		906.1		897.1
Operating Lease Right-of-Use Assets	Operating Lease Right-of-Use Assets	1,432.1		1,564.8		1,613.7		Operating Lease Right-of-Use Assets	1,177.1		1,349.0		1,432.1
Goodwill	Goodwill	2,894.2		2,954.3		2,881.9		Goodwill	2,214.0		2,828.9		2,894.2
Tradenames	Tradenames	2,763.5		2,869.7		2,834.6		Tradenames	2,627.9		2,722.9		2,763.5

Other Intangibles, net	Other Intangibles, net	612.6		648.5		628.5		Other Intangibles, net	516.5		584.1		612.6
Other Assets, including deferred taxes of $54.0, $57.2 and $66.9		357.6		369.8		377.4
Other Assets, including deferred taxes of $38.4, $46.1 and $54.0								Other Assets, including deferred taxes of $38.4, $46.1 and $54.0	371.1		352.1		357.6
Total Assets	Total Assets	$	12,816.0	$	13,293.5	$	13,257.2	Total Assets	$	11,405.9	$	12,396.8	$	12,816.0

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY								LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:	Current Liabilities:							Current Liabilities:
Accounts payable	Accounts payable	$	1,051.3	$	1,124.2	$	1,134.4	Accounts payable	$	1,314.3	$	1,220.8	$	1,051.3
Accrued expenses	Accrued expenses	1,116.5		939.9		939.8		Accrued expenses	891.7		1,100.8		1,116.5
Deferred revenue	Deferred revenue	35.9		55.8		25.6		Deferred revenue	34.8		44.9		35.9
Current portion of operating lease liabilities	Current portion of operating lease liabilities	395.0		421.4		424.1		Current portion of operating lease liabilities	329.4		375.4		395.0
Short-term borrowings	Short-term borrowings	27.8		—		21.1		Short-term borrowings	98.0		10.8		27.8
Current portion of long-term debt	Current portion of long-term debt	32.8		41.1		22.9		Current portion of long-term debt	37.3		34.8		32.8

Total Current Liabilities	Total Current Liabilities	2,659.3		2,582.4		2,567.9		Total Current Liabilities	2,705.5		2,787.5		2,659.3
Long-Term Portion of Operating Lease Liabilities	Long-Term Portion of Operating Lease Liabilities	1,285.7		1,430.7		1,454.6		Long-Term Portion of Operating Lease Liabilities	1,066.1		1,214.4		1,285.7
Long-Term Debt	Long-Term Debt	2,605.2		3,513.7		3,464.1		Long-Term Debt	2,109.1		2,317.6		2,605.2
Other Liabilities, including deferred taxes of $517.0, $418.4 and $416.6		1,094.1		1,039.8		1,097.4
Redeemable Non-Controlling Interest		—		(3.4)		(3.0)
Other Liabilities, including deferred taxes of $306.1, $373.9 and $517.0								Other Liabilities, including deferred taxes of $306.1, $373.9 and $517.0	702.4		788.5		1,094.1

Stockholders’ Equity:	Stockholders’ Equity:							Stockholders’ Equity:
Preferred stock, par value $100 per share; 150,000 total shares authorized	Preferred stock, par value $100 per share; 150,000 total shares authorized	—		—		—		Preferred stock, par value $100 per share; 150,000 total shares authorized	—		—		—
Common stock, par value $1 per share; 240,000,000 shares authorized; 86,988,242; 86,293,158 and 86,218,773 shares issued		87.0		86.3		86.2
Common stock, par value $1 per share; 240,000,000 shares authorized; 87,619,250; 87,107,155 and 86,988,242 shares issued								Common stock, par value $1 per share; 240,000,000 shares authorized; 87,619,250; 87,107,155 and 86,988,242 shares issued	87.6		87.1		87.0
Additional paid-in capital - common stock	Additional paid-in capital - common stock	3,181.8		3,129.4		3,111.7		Additional paid-in capital - common stock	3,233.2		3,198.4		3,181.8
Retained earnings	Retained earnings	4,172.0		3,613.2		3,670.9		Retained earnings	4,616.8		4,562.8		4,172.0
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(524.4)		(519.1)		(614.3)		Accumulated other comprehensive loss	(829.3)		(612.7)		(524.4)
Less: 16,647,920; 15,133,663 and 15,120,165 shares of common stock held in treasury, at cost		(1,744.7)		(1,579.5)		(1,578.3)
Less: 23,807,754; 18,572,482 and 16,647,920 shares of common stock held in treasury, at cost								Less: 23,807,754; 18,572,482 and 16,647,920 shares of common stock held in treasury, at cost	(2,285.5)		(1,946.8)		(1,744.7)
Total Stockholders’ Equity	Total Stockholders’ Equity	5,171.7		4,730.3		4,676.2		Total Stockholders’ Equity	4,822.8		5,288.8		5,171.7
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders’ Equity		$	12,816.0	$	13,293.5	$	13,257.2
Total Liabilities and Stockholders’ Equity								Total Liabilities and Stockholders’ Equity	$	11,405.9	$	12,396.8	$	12,816.0

See accompanying notes.

PVH Corp.

Consolidated Statements of Cash Flows

Unaudited

(In millions)


		Thirty-Nine Weeks Ended					Thirty-Nine Weeks Ended
		October 31,		November 1,			October 30,		October 31,
		2021		2020			2022		2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income (loss)		$	561.2	$	(1,079.4)
Adjustments to reconcile to net cash provided by operating activities:
Net income						Net income	$	61.7	$	561.2
Adjustments to reconcile to net cash (used) provided by operating activities:						Adjustments to reconcile to net cash (used) provided by operating activities:
Depreciation and amortization	Depreciation and amortization	233.2		240.2		Depreciation and amortization	225.3		233.2
Equity in net (income) loss of unconsolidated affiliates		(14.1)		10.3
Equity in net income of unconsolidated affiliates						Equity in net income of unconsolidated affiliates	(42.6)		(14.1)
Deferred taxes	Deferred taxes	87.0		(159.9)		Deferred taxes	(82.3)		87.0
Stock-based compensation expense	Stock-based compensation expense	35.8		36.6		Stock-based compensation expense	35.3		35.8
Impairment of goodwill and other intangible assets		—		933.5
Impairment of goodwill						Impairment of goodwill	417.1		—
Impairment of other long-lived assets	Impairment of other long-lived assets	35.1		23.2		Impairment of other long-lived assets	43.6		35.1

Other (gain) loss, net		(118.9)		3.1
Other gain						Other gain	—		(118.9)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Trade receivables, net	Trade receivables, net	(276.0)		(34.3)		Trade receivables, net	(297.5)		(276.0)
Other receivables	Other receivables	(5.2)		3.4		Other receivables	(4.2)		(5.2)
Inventories, net	Inventories, net	(12.0)		173.7		Inventories, net	(591.0)		(12.0)
Accounts payable, accrued expenses and deferred revenue	Accounts payable, accrued expenses and deferred revenue	52.4		185.3		Accounts payable, accrued expenses and deferred revenue	56.0		52.4
Prepaid expenses	Prepaid expenses	2.9		26.5		Prepaid expenses	(52.1)		2.9

Other, net	Other, net	1.8		64.8		Other, net	(45.0)		1.8
Net cash provided by operating activities		583.2		427.0
Net cash (used) provided by operating activities						Net cash (used) provided by operating activities	(275.7)		583.2
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES

Purchases of property, plant and equipment	Purchases of property, plant and equipment	(170.7)		(158.7)		Purchases of property, plant and equipment	(194.8)		(170.7)

Investments in unconsolidated affiliates		—		(1.6)
Proceeds from sale of the Speedo North America business		—		169.1

Proceeds from sale of certain Heritage Brands trademarks and other assets	Proceeds from sale of certain Heritage Brands trademarks and other assets	222.9		—		Proceeds from sale of certain Heritage Brands trademarks and other assets	—		222.9

Net cash provided by investing activities		52.2		8.8
Proceeds from sale of Karl Lagerfeld investment						Proceeds from sale of Karl Lagerfeld investment	19.1		—
Purchases of investments held in rabbi trust						Purchases of investments held in rabbi trust	(6.8)		—
Proceeds from investments held in rabbi trust						Proceeds from investments held in rabbi trust	0.6		—
Net cash (used) provided by investing activities						Net cash (used) provided by investing activities	(181.9)		52.2
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Net proceeds from (payments on) short-term borrowings		28.1		(31.9)
Proceeds from 4 5/8% senior notes, net of related fees		—		493.8
Proceeds from 3 5/8% senior notes, net of related fees		—		185.9
Net proceeds from short-term borrowings						Net proceeds from short-term borrowings	90.7		28.1

Repayment of 2019 facilities	Repayment of 2019 facilities	(844.2)		(10.6)		Repayment of 2019 facilities	(22.5)		(844.2)
Net proceeds from settlement of awards under stock plans	Net proceeds from settlement of awards under stock plans	21.0		—		Net proceeds from settlement of awards under stock plans	—		21.0
Cash dividends	Cash dividends	—		(2.7)		Cash dividends	(7.7)		—
Acquisition of treasury shares	Acquisition of treasury shares	(160.8)		(116.1)		Acquisition of treasury shares	(342.5)		(160.8)
Payments of finance lease liabilities	Payments of finance lease liabilities	(3.9)		(4.0)		Payments of finance lease liabilities	(3.0)		(3.9)
Payment of mandatorily redeemable non-controlling interest liability attributable to initial fair value	Payment of mandatorily redeemable non-controlling interest liability attributable to initial fair value	(15.2)		(12.7)		Payment of mandatorily redeemable non-controlling interest liability attributable to initial fair value	—		(15.2)
Net cash (used) provided by financing activities		(975.0)		501.7
Net cash used by financing activities						Net cash used by financing activities	(285.0)		(975.0)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(13.1)		19.1		Effect of exchange rate changes on cash and cash equivalents	(42.9)		(13.1)
(Decrease) increase in cash and cash equivalents		(352.7)		956.6
Decrease in cash and cash equivalents						Decrease in cash and cash equivalents	(785.5)		(352.7)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,651.4		503.4		Cash and cash equivalents at beginning of period	1,242.5		1,651.4
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,298.7	$	1,460.0	Cash and cash equivalents at end of period	$	457.0	$	1,298.7

See Note 18 for information on Supplemental Cash Flow Information.

See accompanying notes.

PVH Corp.

Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Non-Controlling Interest

Unaudited

(In millions, except share and per share data)


		Thirty-Nine Weeks Ended November 1, 2020																											Thirty-Nine Weeks Ended October 31, 2021
				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
February 2, 2020		$	(2.0)	$	—	85,890,276	$	85.9			$	3,075.4			$	4,753.0			$	(640.1)			$	(1,462.7)					$	5,811.5
Net loss attributable to PVH Corp.													(1,096.8)													(1,096.8)
January 31, 2021																												January 31, 2021	$	(3.4)	$	—	86,293,158		$	86.3			$	3,129.4		$	3,613.2			$	(519.1)		$	(1,579.5)		$	4,730.3
Net income attributable to PVH Corp.																												Net income attributable to PVH Corp.													99.9										99.9
Foreign currency translation adjustments	Foreign currency translation adjustments																(112.6)									(112.6)		Foreign currency translation adjustments																	(6.5)						(6.5)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $4.1																	7.8									7.8
Net gain on net investment hedges, net of tax expense of $3.7																	11.5									11.5
Comprehensive loss attributable to PVH Corp.																										(1,190.1)
Cumulative-effect adjustment related to the adoption of accounting guidance for credit losses													(1.0)													(1.0)

Settlement of awards under stock plans						232,707	0.2		(0.2)																	—

Stock-based compensation expense									10.0																	10.0
Dividends declared ($0.0375 per common share)													(2.7)													(2.7)
Acquisition of 1,497,725 treasury shares																					(114.3)					(114.3)

Net loss attributable to redeemable non-controlling interest		(0.4)
May 3, 2020		$	(2.4)	$	—	86,122,983	$	86.1	$	3,085.2			$	3,652.5			$	(733.4)			$	(1,577.0)				$	4,513.4
Net loss attributable to PVH Corp.													(51.4)													(51.4)
Foreign currency translation adjustments																	243.4									243.4
Net unrealized and realized loss related to effective cash flow hedges, net of tax benefit of $5.7																	(50.8)									(50.8)
Net loss on net investment hedges, net of tax benefit of $26.3																	(81.8)									(81.8)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $1.2																												Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $1.2																	8.3						8.3
Net gain on net investment hedges, net of tax expense of $1.5																												Net gain on net investment hedges, net of tax expense of $1.5																	4.5						4.5
Comprehensive income attributable to PVH Corp.	Comprehensive income attributable to PVH Corp.																									59.4		Comprehensive income attributable to PVH Corp.																							106.2

Settlement of awards under stock plans	Settlement of awards under stock plans					84,176	0.1		(0.1)																	—		Settlement of awards under stock plans					253,084		0.2			1.2													1.4

Stock-based compensation expense	Stock-based compensation expense								11.8																	11.8		Stock-based compensation expense										10.7													10.7

Acquisition of 22,260 treasury shares																					(1.1)					(1.1)
Acquisition of 87,830 treasury shares																												Acquisition of 87,830 treasury shares																				(9.2)			(9.2)

Net loss attributable to redeemable non-controlling interest	Net loss attributable to redeemable non-controlling interest	(0.3)																										Net loss attributable to redeemable non-controlling interest	(0.2)
August 2, 2020		$	(2.7)	$	—	86,207,159	$	86.2	$	3,096.9			$	3,601.1			$	(622.6)			$	(1,578.1)				$	4,583.5
May 2, 2021																												May 2, 2021	$	(3.6)	$	—	86,546,242		$	86.5		$	3,141.3		$	3,713.1			$	(512.8)		$	(1,588.7)		$	4,839.4
Net income attributable to PVH Corp.	Net income attributable to PVH Corp.												69.8													69.8		Net income attributable to PVH Corp.													181.9										181.9
Foreign currency translation adjustments	Foreign currency translation adjustments																(14.6)									(14.6)		Foreign currency translation adjustments																	(58.9)						(58.9)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $1.2																	10.2									10.2
Net gain on net investment hedges, net of tax expense of $4.0																	12.7									12.7
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $6.2																												Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $6.2																	43.3						43.3
Net gain on net investment hedges, net of tax expense of $5.2																												Net gain on net investment hedges, net of tax expense of $5.2																	16.1						16.1
Comprehensive income attributable to PVH Corp.	Comprehensive income attributable to PVH Corp.																									78.1		Comprehensive income attributable to PVH Corp.																							182.4

Settlement of awards under stock plans	Settlement of awards under stock plans					11,614	—		—																	—		Settlement of awards under stock plans					142,962		0.2			3.7													3.9

Stock-based compensation expense	Stock-based compensation expense								14.8																	14.8		Stock-based compensation expense										13.8													13.8

Acquisition of 3,067 treasury shares																					(0.2)					(0.2)
Acquisition of 27,503 treasury shares																												Acquisition of 27,503 treasury shares																				(3.0)			(3.0)

Net loss attributable to redeemable non-controlling interest	Net loss attributable to redeemable non-controlling interest	(0.3)																										Net loss attributable to redeemable non-controlling interest	(0.1)
November 1, 2020		$	(3.0)	$	—	86,218,773	$	86.2	$	3,111.7			$	3,670.9			$	(614.3)			$	(1,578.3)				$	4,676.2
Change in the economic interests of redeemable non-controlling interest																												Change in the economic interests of redeemable non-controlling interest	3.7									(3.7)													(3.7)
August 1, 2021																												August 1, 2021	$	—	$	—	86,689,204		$	86.7		$	3,155.1		$	3,895.0			$	(512.3)		$	(1,591.7)		$	5,032.8
Net income attributable to PVH Corp.																												Net income attributable to PVH Corp.													279.7										279.7
Foreign currency translation adjustments																												Foreign currency translation adjustments																	(55.6)						(55.6)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $3.1																												Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $3.1																	22.8						22.8
Net gain on net investment hedges, net of tax expense of $6.7																												Net gain on net investment hedges, net of tax expense of $6.7																	20.7						20.7
Comprehensive income attributable to PVH Corp.																												Comprehensive income attributable to PVH Corp.																							267.6

Settlement of awards under stock plans																												Settlement of awards under stock plans					299,038		0.3			15.4													15.7

Stock-based compensation expense																												Stock-based compensation expense										11.3													11.3
Dividends declared ($0.0375 per common share)																												Dividends declared ($0.0375 per common share)													(2.7)										(2.7)
Acquisition of 1,398,924 treasury shares																												Acquisition of 1,398,924 treasury shares																				(153.0)			(153.0)

October 31, 2021																												October 31, 2021	$	—	$	—	86,988,242		$	87.0		$	3,181.8		$	4,172.0			$	(524.4)		$	(1,744.7)		$	5,171.7

PVH Corp.

Consolidated Statements of Changes in Stockholders’ Equity and Redeemable Non-Controlling Interest (continued)

Unaudited

(In millions, except share and per share data)

Thirty-Nine Weeks Ended October 31, 2021
Stockholders’ Equity
Common Stock Additional
Paid-In
Capital-
Common
Stock Accumulated
Other
Comprehensive Loss Total Stockholders’ Equity
Redeemable
Non-Controlling
Interest Preferred
Stock Shares $1 par
Value Retained
Earnings Treasury
Stock
January 31, 2021 $ (3.4) $ — 86,293,158 $ 86.3 $ 3,129.4 $ 3,613.2 $ (519.1) $ (1,579.5) $ 4,730.3
Net income attributable to PVH Corp. 99.9 99.9
Foreign currency translation adjustments (6.5) (6.5)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $1.2 8.3 8.3
Net gain on net investment hedges, net of tax expense of $1.5 4.5 4.5
Comprehensive income attributable to PVH Corp. 106.2
Settlement of awards under stock plans 253,084 0.2 1.2 1.4
Stock-based compensation expense 10.7 10.7
Acquisition of 87,830 treasury shares (9.2) (9.2)
Net loss attributable to redeemable non-controlling interest (0.2)
May 2, 2021 $ (3.6) $ — 86,546,242 $ 86.5 $ 3,141.3 $ 3,713.1 $ (512.8) $ (1,588.7) $ 4,839.4
Net income attributable to PVH Corp. 181.9 181.9
Foreign currency translation adjustments (58.9) (58.9)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $6.2 43.3 43.3
Net gain on net investment hedges, net of tax expense of $5.2 16.1 16.1
Comprehensive income attributable to PVH Corp. 182.4
Settlement of awards under stock plans 142,962 0.2 3.7 3.9
Stock-based compensation expense 13.8 13.8
Acquisition of 27,503 treasury shares (3.0) (3.0)
Net loss attributable to redeemable non-controlling interest (0.1)
Change in the economic interests of redeemable non-controlling interest 3.7 (3.7) (3.7)
August 1, 2021 $ — $ — 86,689,204 $ 86.7 $ 3,155.1 $ 3,895.0 $ (512.3) $ (1,591.7) $ 5,032.8
Net income attributable to PVH Corp. 279.7 279.7
Foreign currency translation adjustments (55.6) (55.6)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $3.1 22.8 22.8
Net gain on net investment hedges, net of tax expense of $6.7 20.7 20.7
Comprehensive income attributable to PVH Corp. 267.6
Settlement of awards under stock plans 299,038 0.3 15.4 15.7
Stock-based compensation expense 11.3 11.3
Dividends declared ($0.0375 per common share) (2.7) (2.7)
Acquisition of 1,398,924 treasury shares (153.0) (153.0)
October 31, 2021 $ — $ — 86,988,242 $ 87.0 $ 3,181.8 $ 4,172.0 $ (524.4) $ (1,744.7) $ 5,171.7


	Thirty-Nine Weeks Ended October 30, 2022
			Stockholders’ Equity
					Common Stock			Additional Paid-In Capital- Common Stock				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
	Redeemable Non-Controlling Interest		Preferred Stock		Shares	$1 par Value				Retained Earnings				Treasury Stock
January 30, 2022	$	—	$	—	87,107,155	$	87.1	$	3,198.4	$	4,562.8	$	(612.7)	$	(1,946.8)	$	5,288.8
Net income attributable to PVH Corp.										133.1						133.1
Foreign currency translation adjustments												(131.8)				(131.8)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $9.0												25.8				25.8
Net gain on net investment hedges, net of tax expense of $16.6												50.2				50.2
Comprehensive income attributable to PVH Corp.																77.3


Settlement of awards under stock plans					157,495	0.2		(0.1)								0.1

Stock-based compensation expense								10.1								10.1
Dividends declared ($0.0375 per common share)										(2.6)						(2.6)
Acquisition of 1,264,730 treasury shares														(105.2)		(105.2)


May 1, 2022	$	—	$	—	87,264,650	$	87.3	$	3,208.4	$	4,693.3	$	(668.5)	$	(2,052.0)	$	5,268.5
Net income attributable to PVH Corp.										115.3						115.3
Foreign currency translation adjustments												(92.0)				(92.0)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $1.8												5.5				5.5
Net gain on net investment hedges, net of tax expense of $9.6												28.6				28.6
Comprehensive income attributable to PVH Corp.																57.4


Settlement of awards under stock plans					245,128	0.2		(0.2)								—

Stock-based compensation expense								12.7								12.7
Dividends declared ($0.0375 per common share)										(2.6)						(2.6)
Acquisition of 2,068,991 treasury shares														(129.6)		(129.6)


July 31, 2022	$	—	$	—	87,509,778	$	87.5	$	3,220.9	$	4,806.0	$	(726.4)	$	(2,181.6)	$	5,206.4
Net loss attributable to PVH Corp.										(186.7)						(186.7)
Foreign currency translation adjustments												(134.1)				(134.1)
Net unrealized and realized gain related to effective cash flow hedges, net of tax expense of $4.1												10.4				10.4
Net gain on net investment hedges, net of tax expense of $6.8												20.8				20.8
Comprehensive loss attributable to PVH Corp.																(289.6)


Settlement of awards under stock plans					109,472	0.1		(0.2)								(0.1)

Stock-based compensation expense								12.5								12.5
Dividends declared ($0.0375 per common share)										(2.5)						(2.5)
Acquisition of 1,901,551 treasury shares														(103.9)		(103.9)


October 30, 2022	$	—	$	—	87,619,250	$	87.6	$	3,233.2	$	4,616.8	$	(829.3)	$	(2,285.5)	$	4,822.8

See accompanying notes.

PVH CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

PVH Corp. and its consolidated subsidiaries (collectively, the “Company”) constitute a global apparel company with a brand portfolio that includes TOMMY HILFIGER, Calvin Klein, Warner’s, Olga and True&Co., which are owned, Van Heusen, IZOD, ARROW and Geoffrey Beene, which the Company owned through the second quarter of 2021 and now licenses back for certain product categories, and other licensed brands. The Company designs and markets branded sportswear (casual apparel), jeanswear, performance apparel, intimate apparel, underwear, swimwear, dress shirts, neckwear, handbags, accessories, footwear and other related products and licenses its owned brands globally over a broad array of product categories and for use in numerous discrete jurisdictions. The Company entered into a definitive agreement during the second quarter of 2021 to sell certain of its heritage brands trademarks, including Van Heusen, IZOD, ARROW and Geoffrey Beene, as well as certain related inventories of its Heritage Brands business, to Authentic Brands Group (“ABG”) and other parties (the “Heritage Brands transaction”). The Company completed the sale on the first day of the third ~~quarter.~~quarter of 2021. References to the aforementioned and other brand names are to registered and common law trademarks owned by the Company or licensed to the Company by third parties and are identified by italicizing the brand name.

~~The Company also licensed~~ ~~Speedo~~ ~~for North America and the Caribbean until April 6, 2020, on which date the Company sold its Speedo North America business to Pentland Group PLC (“Pentland”), the parent company of the~~ ~~Speedo~~ ~~brand (the “Speedo transaction”). Upon the closing, the Company deconsolidated the net assets of the Speedo North America business and no longer licensed the~~ ~~Speedo~~ ~~trademark.~~

The consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated in consolidation. Investments in entities that the Company does not control but has the ability to exercise significant influence over are accounted for using the equity method of accounting. The Company’s Consolidated Statements of Operations include its proportionate share of the net income or loss of these entities. Please see Note 6, “Investments in Unconsolidated Affiliates,” for further discussion. The Company ~~and Arvind Limited (“Arvind”)~~ formed a joint venture in Ethiopia ~~PVH Arvind Manufacturing Private Limited Company~~ (“PVH Ethiopia”), in which the Company held an initial economic interest of 75%, with ~~Arvind’s~~its partner’s 25% interest accounted for as a redeemable non-controlling ~~interest.~~interest (“RNCI”). The Company ~~consolidates~~consolidated PVH Ethiopia in its consolidated financial statements. The Company ~~and Arvind amended, effective May 31,~~closed in the fourth quarter of 2021 the ~~capital structure of~~manufacturing facility that was PVH ~~Ethiopia and as~~Ethiopia’s sole operation. The closure did not have a ~~result~~material impact on the ~~Company now solely manages and effectively owns all economic interests in the joint venture.~~Company’s consolidated financial statements. Please see Note 5, “Redeemable Non-Controlling Interest,” for further discussion.

Since the first day of the second quarter of 2022, the Company has been accounting for its operations in Turkey as highly inflationary, as the prior three-year cumulative inflation rate has surpassed 100%. Accordingly, the Company has changed the functional currency of its subsidiary in Turkey from the Turkish lira to the euro, which is the functional currency of its parent. The required remeasurement of monetary assets and liabilities denominated in Turkish lira into euro did not have a material impact on the Company’s results of operations during the thirteen and thirty-nine weeks ended October 30, 2022. As of October 30, 2022, net monetary assets denominated in Turkish lira represented less than 1% of the Company’s total net assets.

The Company’s fiscal years are based on the 52-53 week periods ending on the Sunday closest to February 1 and are designated by the calendar year in which the fiscal year commences. References to a year are to the Company’s fiscal year, unless the context requires otherwise.

The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not contain all disclosures required by ~~accounting principles generally accepted in the United States~~U.S. GAAP for complete financial statements. Reference is made to the Company’s audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended January ~~31, 2021.~~30, 2022.

The preparation of the interim financial statements in conformity with ~~accounting principles generally accepted in the United States~~U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates.

The results of operations for the thirteen and thirty-nine weeks ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ are not necessarily indicative of those for a full fiscal year due, in part, to the COVID-19 pandemic and seasonal factors. ~~The~~Furthermore, the data contained in these consolidated financial statements are unaudited and are subject to year-end adjustments. However, in the opinion of management, all known adjustments have been made to present fairly the consolidated operating results for the unaudited periods.

There is significant uncertainty due to inflationary pressures globally, the war in Ukraine, the COVID-19 pandemic and foreign currency volatility and their impacts on the Company’s business. If economic conditions were to worsen, the Company’s results of operations, financial condition and cash flows from operations may be materially and adversely impacted.

War in Ukraine

As a result of the war in Ukraine, the Company announced in March 2022 that it was temporarily closing stores and pausing commercial activities in Russia and Belarus. In the second quarter of 2022, the Company made the decision to exit from its Russia business, including the closure of its retail stores in Russia and the cessation of its wholesale operations in Russia and Belarus. Additionally, while the Company has no direct operations in Ukraine, virtually all of its wholesale customers and franchisees in Ukraine have closed their stores, which has resulted in a reduction in shipments to these customers and canceled orders. Approximately 2% of the Company’s revenue in 2021 was generated in Russia, Belarus and Ukraine. The war also has led to, and may lead to further, broader macroeconomic implications, including the weakening of the euro against the United States dollar, increases in fuel prices and volatility in the financial markets, as well as a decline in consumer spending.

The Company assessed the impacts of the war in Ukraine on the estimates and assumptions used in preparing these consolidated financial statements, including, but not limited to, the allowance for credit losses, inventory reserves, and carrying values of long-lived assets. Based on these assessments, the Company recorded pre-tax noncash impairment charges related to long-lived assets of $43.6 million during the thirty-nine weeks ended October 30, 2022. Please see Note 12, “Fair Value Measurements,” for further discussion of the impairments.

There is significant uncertainty regarding the extent to which the war and its broader macroeconomic implications, including the potential impacts on the broader European market, will further impact the Company’s business, financial condition and results of operations for the remainder of 2022 and beyond.

COVID-19 Pandemic

The COVID-19 pandemic has had, and ~~continues~~may continue to have, a significant impact on the Company’s business, results of operations, financial condition and cash flows from operations.

~~The Company’s retail stores have been, and continue to be, impacted by temporary closures, reduced hours and reduced occupancy levels as a result of the pandemic.~~

•Virtually all of the Company’s retail stores were temporarily closed for varying periods of time throughout the first quarter and into the second quarter of 2020, but had reopened in June 2020 and were operating at significantly reduced capacity. Further, the Company’s retail stores in Europe and North America continued to face significant pressure as a result of the pandemic, with the majority of stores in Europe and Canada closed during the fourth quarter of 2020.

•During the first quarter of 2021, pandemic-related pressures on the Company’s ~~retail~~ stores included temporary ~~store~~ closures for a significant percentage of ~~the Company’s~~its stores in Europe, Canada and Japan. Pressures on ~~the Company’s retail~~its stores continued ~~during the second quarter of~~throughout 2021, with certain ~~retail~~ stores in Europe, Japan and Australia temporarily closed for varying periods of ~~time. During~~time in the second quarter, the majority of its stores in Australia closed temporarily in the third quarter, and the temporary closure of ~~2021,~~certain stores in Europe and China for varying periods of time in the ~~majority~~fourth quarter. Further, a significant percentage of the Company’s ~~retail~~ stores ~~in Australia~~globally were ~~closed temporarily.~~operating on reduced hours during the fourth quarter of 2021 as a result of increased levels of associate absenteeism due to the pandemic.

COVID-related pressures have continued into 2022, although to a much lesser extent than in the prior year period in all regions except China, as strict lockdowns in China resulted, and continue to result, in extensive temporary store closures and significant reductions in consumer traffic and purchasing, as well as have impacted certain warehouses, which resulted in the temporary pause of deliveries to the Company’s wholesale customers and from its digital commerce business in the first half of 2022.

•

In addition, the Company’s North America ~~retail~~ stores have been, and are expected to continue to be, challenged by the ~~lack of~~significant decrease in international tourists coming to the United States, ~~as stores~~although to a lesser extent than in 2021. Stores located in international tourist destinations have historically represented a significant portion of ~~that~~this business.

The Company’s brick and mortar wholesale customers and its licensing partners also have experienced significant business disruptions as a result of the ~~pandemic, with several of the Company’s North America wholesale customers filing for bankruptcy in 2020.~~pandemic. The Company’s wholesale customers and franchisees globally generally have experienced temporary store closures and operating restrictions and obstacles in the same countries and at the same times as the Company. The elevated inventory levels in their stores as a result of the temporary closures, as well as lower traffic and consumer demand throughout, resulted in a sharp reduction in shipments to these customers in 2020.

The pandemic also has ~~also~~ impacted, and continues to impact, the Company’s supply chain partners, including ~~third-party~~third party manufacturers, logistics providers and other vendors, as well as the supply chains of its licensees. These supply chains have experienced, and may continue to experience in the future, disruptions as a result of closed factories or factories operating with a reduced workforce, or other logistics constraints, including vessel, container and other transportation shortages, labor shortages and port congestion due to the impact of the pandemic.

The Company took certain actions during 2020 to preserve its liquidity and strengthen its financial flexibility. The Company suspended share repurchases under its stock repurchase program and suspended its dividend in March 2020. It entered into an amendment to its senior unsecured credit facilities in June 2020 under which it was not permitted to resume share repurchases or payments of dividends until after the relief period (as defined). Effective June 10, 2021, the relief period was terminated and the Company now is permitted to make share repurchases at management’s discretion and declare and pay dividends on its common stock at the discretion of the Board of Directors, both of which have happened. In addition, the Company took certain other actions starting in the first quarter of 2020 to (i) reduce payroll costs, through temporary furloughs, salary and incentive compensation reductions, decreased working hours and hiring freezes, as well as taking advantage of COVID-related government payroll subsidy programs, primarily in international jurisdictions, (ii) eliminate or reduce expenses in all discretionary spending categories, (iii) reduce rent expense through rent abatements negotiated with landlords for certain of its retail stores affected by temporary closures, (iv) reduce working capital, with a particular focus on tightly managing its inventories, including reducing and cancelling inventory commitments, increasing promotional selling, redeploying basic inventory items to subsequent seasons and consolidating future seasonal collections, as well as extending payment terms with its suppliers and (v) reduce capital expenditures. The Company also announced in July 2020 plans to streamline its North American operations to better align its business with the evolving retail landscape, including (i) a reduction in its office workforce by approximately 450 positions, or 12%, across all three brand businesses and corporate functions, which has resulted in annual cost savings of approximately $80 million, and (ii) the exit from its Heritage Brands Retail business, which was substantially completed in the second quarter of 2021. In addition, the Company announced in March 2021 plans to reduce its workforce, primarily in certain international markets, and to reduce its real estate footprint, including reductions in office space and select store closures, which are expected to result in annual cost savings of approximately $60 million.

In April 2020, the Company entered into a $275.0 million 364-day unsecured revolving credit facility, which was replaced in April 2021 with a new $275.0 million 364-day facility, and issued an additional €175.0 million principal amount of 3 5/8% senior notes due 2024. In July 2020, the Company issued $500.0 million principal amount of 4 5/8% senior notes due 2025. Further, in June 2020 the Company amended its senior unsecured credit facilities to provide temporary relief of certain financial covenants under these facilities, which was in effect through June 10, 2021. Please see Note 9, “Debt,” for further discussion.

The Company also assessed the impacts of the pandemic on the estimates and assumptions used in preparing these consolidated financial statements, including, but not limited to, the allowance for credit losses, inventory reserves, carrying values of goodwill, intangible assets and other long-lived assets, and the effectiveness of hedging instruments. Based on these assessments, the Company recorded pre-tax noncash impairment charges of $961.8 million in the first quarter of 2020, including $879.0 million related to goodwill, $54.5 million related to other intangible assets, $16.0 million related to store assets and $12.3 million related to an equity method investment, and recorded increases to its inventory reserves and allowances for credit losses on trade receivables. The Company recorded an additional noncash impairment charge of $58.7 million related to store assets in the fourth quarter of 2020. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion of the impairments related to goodwill and other intangible assets, Note 12, “Fair Value Measurements,” for further discussion of the impairments related to store assets, and Note 6, “Investments in Unconsolidated Affiliates,” for further discussion of the impairment related to an equity method investment.

The estimates and assumptions used in these assessments were based on management’s judgment and may be subject to change as new events occur and additional information is received. In particular, there continues to be uncertainty about the impacts of the COVID-19 pandemic, including the new variant, on the Company’s business and, if economic conditions caused by the pandemic do not recover consistent with management’s expectations, the Company’s results of operations, financial condition and cash flows from operations may be materially and adversely impacted.

2. REVENUE

The Company generates revenue primarily from sales of finished products under its owned trademarks through its wholesale and retail operations. The Company also generates royalty and advertising revenue from licensing ~~the~~ rights to its trademarks to third parties. Revenue is recognized upon the transfer of control of products or services to the Company’s customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those products or services.

Product Sales

The Company generates revenue from the wholesale distribution of its products to traditional retailers (including for sale through their digital commerce sites), pure play digital commerce retailers, franchisees, licensees and distributors. Revenue is recognized upon transfer of control of goods to the customer, which generally occurs when title to goods is passed and risk of loss transfers to the customer. Depending on the contract terms, transfer of control is upon shipment of goods to or upon receipt of goods by the customer. Payment is typically due within 30 to 90 days. The amount of revenue recognized is net of returns, sales allowances and other discounts that the Company offers to its wholesale customers. The Company estimates returns based on an analysis of historical experience and ~~specific~~individual customer arrangements and estimates sales allowances and other discounts based on seasonal negotiations, historical experience and an evaluation of current sales trends and market conditions.

The Company also generates revenue from the retail distribution of its products through its freestanding stores, shop-in-shop/concession locations and digital commerce sites. Revenue is recognized at the point of sale in the stores and shop-in-shop/concession locations and upon estimated time of delivery for sales through the Company’s digital commerce sites, at which point control of the products passes to the customer. The amount of revenue recognized is net of returns, which are estimated based on an analysis of historical experience. Costs associated with coupons are recorded as a reduction of revenue at the time of coupon redemption.

The Company excludes from revenue taxes collected from customers and remitted to government authorities related to sales of the Company’s products. Shipping and handling costs that are billed to customers are included in net sales.

Customer Loyalty Programs

The Company uses loyalty programs that offer customers of its retail businesses specified amounts off of future purchases for a specified period of time after certain levels of spending are achieved. Customers that are enrolled in the programs earn loyalty points for each purchase made.

Loyalty points earned under the customer loyalty programs provide the customer a material right to acquire additional products and give rise to the Company having a separate performance obligation. For each transaction where a customer earns loyalty points, the Company allocates revenue between the products purchased and the loyalty points earned based on the relative standalone selling prices. Revenue allocated to loyalty points is recorded as deferred revenue until the loyalty points are redeemed or expire.

Gift Cards

The Company sells gift cards to customers in its retail stores and on certain of its digital commerce sites. The Company does not charge administrative fees on gift cards nor do they expire. Gift card purchases by a customer are prepayments for products to be provided by the Company in the future and are therefore considered to be performance obligations of the Company. Upon the purchase of a gift card by a customer, the Company records deferred revenue for the cash value of the gift card. Deferred revenue is relieved and revenue is recognized when the gift card is redeemed by the customer. The portion of gift cards that the Company does not expect to be redeemed (referred to as “breakage”) is recognized proportionately over the estimated customer redemption period, subject to the constraint that it must be probable that a significant reversal of revenue will not occur, if the Company determines that it does not have a legal obligation to remit the value of such unredeemed gift cards to any jurisdiction.

License Agreements

The Company generates royalty and advertising revenue from licensing the rights to access its trademarks to third parties, including the Company’s joint ventures. The license agreements generally are ~~generally~~ exclusive to a territory or product category, have terms in excess of one year and, in most cases, include renewal options. In exchange for providing these rights, the license agreements require the licensees to pay the Company a royalty and, in certain agreements, an advertising fee. In both cases, the Company generally receives the greater of (i) a sales-based percentage fee and (ii) a contractual minimum fee for each annual performance period under the license agreement.

In addition to the rights to access its trademarks, the Company provides ongoing support to its licensees over the term of the agreements. As such, the Company’s license agreements are licenses of symbolic intellectual property and, therefore, revenue is recognized over time. For license agreements where the sales-based percentage fee exceeds the contractual minimum fee, the Company recognizes revenues as the licensed products are sold as reported to the Company by its licensees. For license agreements where the sales-based percentage fee does not exceed the contractual minimum fee, the Company recognizes the contractual minimum fee as revenue ratably over the contractual period.

Under the terms of the license agreements, payments generally are ~~generally~~ due quarterly from the licensees. The Company records deferred revenue when amounts are received or receivable from the licensee in advance of the recognition of revenue.

As of October ~~31, 2021,~~30, 2022, the contractual minimum fees on the portion of all license agreements not yet satisfied totaled ~~$893.9~~$849.8 million, of which the Company expects to recognize ~~$42.8~~$40.2 million as revenue during the remainder of ~~2021, $216.3~~2022, $257.6 million in ~~2022~~2023 and ~~$634.8~~$552.0 million thereafter.

Deferred Revenue

Changes in deferred revenue, which primarily relate to customer loyalty programs, gift cards and license agreements for the thirty-nine weeks ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ were as follows:


		Thirty-Nine Weeks Ended						Thirty-Nine Weeks Ended
(In millions)	(In millions)	10/31/21			11/1/20		(In millions)	10/30/22		10/31/21
Deferred revenue balance at beginning of period	Deferred revenue balance at beginning of period	$	55.8		$	64.7	Deferred revenue balance at beginning of period	$	44.9	$	55.8

Net additions to deferred revenue during the period	Net additions to deferred revenue during the period	30.0			18.6		Net additions to deferred revenue during the period	28.9		30.0
Reductions in deferred revenue for revenue recognized during the period (1)	Reductions in deferred revenue for revenue recognized during the period (1)	(48.3)			(57.7)		Reductions in deferred revenue for revenue recognized during the period (1)	(39.0)		(48.3)
Reduction in deferred revenue related to the Heritage Brands transaction	Reduction in deferred revenue related to the Heritage Brands transaction	(1.6)		(2)	—		Reduction in deferred revenue related to the Heritage Brands transaction	—		(1.6)		(2)
Deferred revenue balance at end of period	Deferred revenue balance at end of period	$	35.9		$	25.6	Deferred revenue balance at end of period	$	34.8	$	35.9

(1) Represents the amount of revenue recognized during the period that was included in the deferred revenue balance at the beginning of the period and does not contemplate revenue recognized from amounts deferred during the period. The amounts include ~~$1.8~~$2.7 million and ~~$7.3~~$1.8 million of revenue recognized during the thirteen weeks ended October 30, 2022 and October 31, 2021, ~~and November 1, 2020,~~ respectively.

(2) The Company recorded a $1.6 million reduction in deferred revenue in connection with the Heritage Brands transaction. Please see Note 4, “Acquisitions and Divestitures,” for further discussion.

The Company also had long-term deferred revenue liabilities included in other liabilities in its Consolidated Balance Sheets of ~~$12.0~~$12.5 million, ~~$13.4~~$15.0 million and ~~$14.0~~$12.0 million as of October 30, 2022, January 30, 2022 and October 31, 2021, ~~January 31, 2021 and November 1, 2020,~~ respectively.

Optional Exemptions

The Company elected not to disclose the remaining performance obligations for contracts that have an original expected term of one year or less and expected sales-based percentage fees for the portion of all license agreements not yet satisfied.

Please see Note 19, “Segment Data,” for information on the disaggregation of revenue by segment and distribution channel.

3. INVENTORIES

Inventories are comprised principally of finished goods and are stated at the lower of cost or net realizable value, except for certain retail inventories in North America that are stated at the lower of cost or market using the retail inventory method. Cost for substantially all wholesale inventories in North America and certain wholesale and retail inventories in Asia is determined using the first-in, first-out method. Cost for all other inventories is determined using the weighted average cost method. The Company reviews current business trends and forecasts, inventory aging and discontinued merchandise categories to determine adjustments that it estimates will be needed to liquidate existing clearance inventories and record inventories at either the lower of cost or net realizable value or the lower of cost or market using the retail inventory method, as applicable.

4. ACQUISITIONS AND DIVESTITURES

Australia Acquisition

The Company acquired ~~on May 31,~~in 2019 the approximately 78% ownership interest in Gazal Corporation Limited (“Gazal”) that it did not already own (the “Australia acquisition”). Prior to the Australia acquisition, the Company and Gazal jointly owned and managed a joint venture, PVH Brands Australia Pty. Limited (“PVH Australia”), with each owning a 50% interest. PVH Australia licensed and operated businesses in Australia, New Zealand and other parts of Oceania under the ~~TOMMY HILFIGER~~, ~~Calvin Klein~~ ~~and~~ ~~Van Heusen~~ ~~brands, along with other owned and licensed brands. PVH Australia came under the Company’s full control as a result of the acquisition. The Company now operates directly those businesses.~~

Mandatorily Redeemable Non-Controlling Interest

Pursuant to the terms of the acquisition agreement, key executives of Gazal and PVH Brands Australia Pty. Limited (“PVH Australia”) exchanged a portion of their interests in Gazal for approximately 6% of the outstanding shares of the Company’s previously wholly owned subsidiary that acquired 100% of the ownership interests in the Australia business. The Company was obligated to purchase this 6% interest within two years of the Australia acquisition closing in two tranches: tranche 1 – 50% of the shares one year after the closing; and tranche 2 – all remaining shares two years after the closing. The purchase price for the tranche 1 and tranche 2 shares was based on a multiple of the subsidiary’s adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) less net debt as of the end of the applicable measurement year, and the multiple varied depending on the level of EBITDA compared to a target.

The Company recognized a liability of $26.2 million for the fair value of the 6% interest on the date of the Australia acquisition, based on exchange rates in effect on that date, which was being accounted for as a mandatorily redeemable non-controlling interest. The fair value of the liability was determined using a Monte Carlo simulation model, which utilized inputs, including the volatility of financial results, in order to model the probability of different outcomes. The Company classified this as a Level 3 fair value measurement due to the use of significant unobservable inputs.

In subsequent periods, the liability for the mandatorily redeemable non-controlling interest was adjusted each reporting period to its redemption value based on conditions that existed as of each subsequent balance sheet date, provided that the liability could not be adjusted below the amount initially recorded at the acquisition date. The Company recorded any such adjustments to the liability in interest expense in the Company’s Consolidated Statements of Operations. The Company recorded a loss of $1.4 million and $2.3 million in interest expense during the thirteen and thirty-nine weeks ended November 1, 2020, respectively, in connection with the remeasurement of the mandatorily redeemable non-controlling interest.

For the tranche 1 and tranche 2 shares, the measurement periods ended in 2019 and 2020, respectively. The Company paid the management shareholders an aggregate purchase price of $17.3 million for the tranche 1 shares in June 2020 and an aggregate purchase price of $24.4 million for the tranche 2 shares in June 2021 based on exchange rates in effect on the applicable payment dates. The Company presented these payments within the ~~Company’s~~ Consolidated Statements of Cash Flows as follows: (i) $12.7 million and $15.2 million as financing cash flows for the thirty-nine weeks ended November 1, 2020 and October 31, 2021, respectively, which represented the initial fair values of the liabilities for the tranche 1 and tranche 2 shares,

respectively, recognized on the acquisition date, and (ii) $4.6 million and $9.2 million as operating cash flows for the thirty-nine weeks ended November 1, 2020 and October 31, 2021, respectively, for the tranche 1 and tranche 2 shares, respectively, attributable to interest.

The Company had no remaining liability for the mandatorily redeemable non-controlling interest as of October 31, 2021. The liability for the mandatorily redeemable non-controlling interest, related to the tranche 2 shares was $24.1 million and $19.8 million as of January 31, 2021 and November 1, 2020, respectively, based on exchange rates in effect on those dates, and was included in accrued expenses in the Company’s Consolidated Balance Sheets.

Sale of Certain Heritage Brands Trademarks and Other Assets

The Company entered into a definitive agreement on June 23, 2021 to sell certain of its heritage brands trademarks, including Van Heusen, IZOD, ARROW and Geoffrey Beene, as well as certain related inventories of its Heritage Brands business, with a net carrying value of $97.8 million, to ABG and other parties for $222.9 million in ~~cash, subject to a customary adjustment.~~cash.

The Company completed the sale on August 2, 2021 for net proceeds of $216.3 million, after transaction costs. In connection with the closing of the transaction, the Company recorded a pre-tax gain of $118.5 million in the third quarter of 2021, which represented the excess of the amount of consideration received over the net carrying value of the assets, less costs to sell. The gain was recorded in other ~~(gain) loss, net~~gain in the Company’s Consolidated Statement of Operations and included in the Heritage Brands Wholesale segment.

In connection with the sale, the employment of certain ~~U.S.-based~~ employees based in the United States engaged in the Heritage Brands business was terminated during the third quarter of 2021. However, the Company retained the liability for any deferred vested benefits earned by these employees under its retirement plans. No further benefits ~~will be~~were accrued under the plans for these employees and as a result, the Company recognized a gain of $1.8 million in the third quarter of 2021 with a corresponding decrease to its pension benefit obligation. For certain eligible employees affected by the transaction, the Company provided an enhanced retirement benefit and as a result recognized $1.4 million of special termination benefit costs during the third quarter of 2021 with a corresponding increase to its pension benefit obligation. These amounts were included in other ~~(gain) loss, net~~gain in the Company’s Consolidated Statement of Operations. Please see Note 8, “Retirement and Benefit ~~Plans,” for further discussion.~~

~~Sale of the Speedo North America Business~~

~~The Company entered into a definitive agreement on January 9, 2020 to sell its Speedo North America business to Pentland, the parent company of the~~ ~~Speedo~~ brand, for $170.0 million in cash, subject to a working capital adjustment. The Company classified the assets and liabilities of the Speedo North America business as held for sale in the Company’s Consolidated Balance Sheet as of February 2, 2020 and recorded a pre-tax noncash loss of $142.0 million in the fourth quarter of 2019 (including a $116.4 million noncash impairment charge related to the ~~Speedo~~ perpetual license right) to reduce the carrying value of the Speedo North America business to its estimated fair value, less costs to sell. The estimated fair value, less costs to sell, reflected the amount of consideration the Company expected to receive upon closing of the transaction, inclusive of the working capital adjustment.

The Company completed the sale of its Speedo North America business on April 6, 2020 for net proceeds of $169.1 million and deconsolidated the net assets of the business. In connection with the closing of the Speedo transaction, the Company recorded a pre-tax noncash loss of $5.9 million in the first quarter of 2020 resulting from the remeasurement of the loss recorded in the fourth quarter of 2019, primarily due to changes to the net assets of the Speedo North America business subsequent to February 2, 2020, based on the terms of the agreement. The loss was recorded in other (gain) loss, net in the Company’s Consolidated Statement of Operations and included in the Heritage Brands Wholesale segment.

Upon the closing of the Speedo transaction, U.S.-based employees who were engaged primarily in the Speedo North America business terminated their employment with the Company. However, the Company retained the liability for any deferred vested benefits earned by these employees under its retirement plans. No further benefits are being accrued under the plans and as a result, the Company recognized a gain of $2.8 million in the first quarter of 2020 with a corresponding decrease to its pension benefit obligation. The gain was included in other (gain) loss, net in the Company’s Consolidated Statement of Operations. Please see Note 8, “Retirement and Benefit Plans,”Plans” for further discussion.

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5. REDEEMABLE NON-CONTROLLING INTEREST

The Company ~~and Arvind~~ formed PVH Ethiopia during 2016 to operate a manufacturing facility that ~~produces~~produced finished products for the Company for distribution primarily in the United States. The Company and ~~Arvind~~its partner held initial economic interests of 75% and 25%, respectively, in PVH Ethiopia, with ~~Arvind’s~~its partner’s 25% interest accounted for as ~~a redeemable non-controlling interest (“RNCI”).~~an RNCI. The Company ~~consolidates~~consolidated PVH Ethiopia in its consolidated financial statements. The ~~Company and Arvind~~capital structure of PVH Ethiopia was amended effective May 31, 2021 ~~the capital structure of PVH Ethiopia~~ and, as a result, the Company ~~now~~ solely ~~manages~~managed and effectively ~~owns~~owned all economic interests in the joint venture. The Company closed in the fourth quarter of 2021 the manufacturing facility that was PVH Ethiopia’s sole operation. The closure did not have a material impact on the Company’s consolidated financial statements.

The fair value of the RNCI as of the date of formation of PVH Ethiopia was $0.1 million. The carrying amount of the RNCI prior to May 31, 2021 was adjusted to equal the redemption amount at the end of each reporting period, provided that this amount at the end of each reporting period could not be lower than the initial fair value adjusted for the minority shareholder’s share of net income or loss. Any adjustment to the redemption amount of the RNCI, determined after attribution of net income or loss of the RNCI, would have been recognized immediately in retained earnings of the Company, since it was probable that the RNCI would become redeemable in the future based on the passage of time. There was no adjustment to the redemption amount of the RNCI as of May 31, 2021.

~~The carrying amount of the RNCI as of January 31, 2021 and November 1, 2020 was $(3.4) million and $(3.0) million, respectively.~~ In connection with the amendment of the capital structure of PVH Ethiopia, the Company reclassified the carrying amount of the RNCI as of May 31, 2021 of $(3.7) million to additional paid-in capital. Following this reclassification, the Company ~~is no longer~~stopped attributing any net income or loss in PVH Ethiopia to the redeemable non-controlling interest.

6. INVESTMENTS IN UNCONSOLIDATED AFFILIATES

The Company had investments in unconsolidated affiliates of ~~$157.3~~$175.4 million, ~~$164.0~~$165.3 million and ~~$153.1~~$157.3 million as of October 30, 2022, January 30, 2022 and October 31, 2021, ~~January 31, 2021 and November 1, 2020,~~ respectively. These investments are accounted for under the equity method of accounting and included in other assets in the Company’s Consolidated Balance Sheets. The Company received dividends of $16.2 million and $18.8 million from these investments during the thirty-nine weeks ended October 30, 2022 and October 31, 2021, ~~and made payments related to these investments of $1.6 million during the thirty-nine weeks ended November 1, 2020 to contribute its share of funding for the period.~~respectively.

The Company ~~owns an~~entered into a definitive agreement on April 29, 2022 to sell its approximately 8% economic interest ~~of approximately 8%~~ in Karl Lagerfeld Holding B.V. (“Karl Lagerfeld”) to a subsidiary of G-III Apparel Group, Ltd. (the “Karl Lagerfeld transaction”). The Company ~~is deemed~~completed the sale on May 31, 2022 for approximately $20.5 million in cash, subject to ~~have significant influence with respect to this investment and had been accounting for this investment under~~customary adjustments, of which $19.1 million was received during the ~~equity method of accounting prior to the first~~second quarter of ~~2020.~~2022 and $1.4 million is being held in escrow and subject to exchange rate fluctuation. The ~~Company determined during the first quarter~~carrying value of ~~2020 that recent and projected business results for Karl Lagerfeld, which included an adverse impact of the COVID-19 pandemic, was an indicator of an other-than-temporary impairment with respect to~~ the Company’s investment in Karl ~~Lagerfeld. The Company calculated~~Lagerfeld was $1.0 million immediately prior to the ~~fair value of its investment using future operating cash flow projections that were discounted at a rate of 10.9%, which accounted for the relative risks~~completion of the ~~estimated future cash flows. The~~sale.

In connection with the closing of the Karl Lagerfeld transaction, the Company classified this as a Level 3 fair value measurement due to the use of significant unobservable inputs. The Company determined the fair value of its investment was lower than its carrying amount as of May 3, 2020, and as a result recorded a ~~noncash other-than-temporary impairment~~pre-tax gain of ~~$12.3~~$16.1 million during the ~~first~~second quarter of ~~2020 to fully impair~~2022, which reflected (i) the ~~investment.~~excess of the proceeds over the carrying value of the Karl Lagerfeld investment, less (ii) $3.4 million of foreign currency translation adjustment losses previously recorded in accumulated other comprehensive loss. The ~~impairment~~gain was included in equity in net income ~~(loss)~~ of unconsolidated affiliates in the Company’s Consolidated ~~Statement~~Statements of ~~Operations. The impairment charge was~~Operations, and recorded in corporate expenses not allocated to any reportable segments, consistent with how the Company has historically recorded its proportionate share of the net income or loss of its investment in Karl Lagerfeld.

~~Following~~

Please see Note 5, “Investments In Unconsolidated Affiliates,” in the ~~impairment~~Notes to Consolidated Financial Statements included in Item 8 of ~~its investment in~~the Company’s Annual Report on Form 10-K for the year ended January 30, 2022 for further discussion of the Karl Lagerfeld the Company discontinued applying the equity method of accounting to this investment and will not record its share of net income or losses from Karl Lagerfeld in the Company’s consolidated financial statements until such time that the Company’s share of net income from Karl Lagerfeld equals the share of net losses that were not recognized during the period the equity method was discontinued.investment.

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7. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the thirty-nine weeks ended October ~~31, 2021,~~30, 2022, by segment (please see Note 19, “Segment Data,” for further discussion of the Company’s reportable segments), were as follows:

(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 31, 2021
Goodwill, gross     $ 781.8 $ 902.8 $ 203.0 $ 1,748.0 $ 197.7 $ 11.9 $ 3,845.2
Accumulated impairment losses     (287.3) (394.0) — — (197.7) (11.9) (890.9)
Goodwill, net     494.5 508.8 203.0 1,748.0 — — 2,954.3
Reduction of goodwill, gross related to the Heritage Brands transaction — — — — (92.7) — (92.7)
Reduction of accumulated impairment losses related to the Heritage Brands transaction — — — — 92.7 — 92.7
Currency translation 0.2 (6.3) — (54.0) — — (60.1)
Balance as of October 31, 2021
Goodwill, gross     782.0 896.5 203.0 1,694.0 105.0 11.9 3,692.4
Accumulated impairment losses     (287.3) (394.0) — — (105.0) (11.9) (798.2)
Goodwill, net     $ 494.7 $ 502.5 $ 203.0 $ 1,694.0 $ — $ — $ 2,894.2

The Company recorded a $92.7 million reduction to goodwill, gross, a corresponding $92.7 million reduction to accumulated impairment losses, and a $66.9 million reduction to tradenames during the thirty-nine weeks ended October 31, 2021 in connection with the Heritage Brands transaction. The Company had recorded the accumulated impairment losses as a result of the interim goodwill impairment test performed in the first quarter of 2020 discussed below. Please see Note 4, “Acquisitions and Divestitures,” for further discussion of the Heritage Brands transaction.


(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 30, 2022
Goodwill, gross	$	781.8	$	891.5	$	203.0	$	1,633.9	$	105.0	$	—	$	3,615.2
Accumulated impairment losses	(287.3)		(394.0)		—		—		(105.0)		—		(786.3)
Goodwill, net	494.5		497.5		203.0		1,633.9		—		—		2,828.9

Impairment	(162.6)		(77.3)		(177.2)		—		—		—		(417.1)
Currency translation	(0.2)		(25.1)		—		(172.5)		—		—		(197.8)
Balance as of October 30, 2022
Goodwill, gross	781.6		866.4		203.0		1,461.4		105.0		—		3,417.4
Accumulated impairment losses	(449.9)		(471.3)		(177.2)		—		(105.0)		—		(1,203.4)
Goodwill, net	$	331.7	$	395.1	$	25.8	$	1,461.4	$	—	$	—	$	2,214.0

The Company assesses the recoverability of goodwill and other indefinite-lived intangible assets annually, at the beginning of the third quarter of each fiscal year, and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the carrying amount may be impaired. Impairment testing for goodwill is done at the reporting unit level. Impairment testing for other indefinite-lived intangible assets is done at the individual asset level. Intangible assets with finite lives are amortized over their estimated useful life and are tested for impairment, along with other long-lived assets, when events and circumstances indicate that the assets might be impaired. Indefinite-lived intangible assets and intangible assets with finite lives are tested for impairment prior to assessing the recoverability of goodwill. Please see Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January ~~31, 2021~~30, 2022 for discussion of the Company’s goodwill and other intangible assets impairment testing process.

Goodwill ~~Impairment Testing~~

~~2021 Annual Impairment Test~~

For the ~~2021~~2022 annual goodwill impairment test performed as of the beginning of the third quarter of ~~2021,~~2022, the Company elected to ~~perform a~~bypass the qualitative assessment ~~first~~and proceeded directly to ~~determine whether it was more likely than not that~~the quantitative impairment test using a discounted cash flow method to estimate the fair value of ~~each~~its reporting units. In making this election, the Company considered the changes resulting from the current macroeconomic environment, in particular the recent increase in interest rates and the strengthening of the U.S. dollar against most major currencies in which the Company transacts business.

As a result of the Company’s 2022 annual impairment test, the Company recorded $417.1 million of noncash impairment charges during the third quarter of 2022, which were included in goodwill impairment in the Company’s Consolidated Statement of Operations. The impairments were driven primarily by a significant increase in discount rates. The impairment charges, which related to the Calvin Klein Wholesale North America, Calvin Klein Licensing and Advertising International and Tommy Hilfiger Retail North America reporting units, were recorded to the Company’s segments as follows: $162.6 million in the Calvin Klein North America segment, $77.3 million in the Calvin Klein International segment and $177.2 million in the Tommy Hilfiger North America segment.

Of these reporting units, Calvin Klein Licensing and Advertising International was determined to be partially impaired. The remaining carrying amount of goodwill allocated to this reporting unit ~~with allocated goodwill~~as of the date of the test was ~~less than~~$41.0 million. Holding all other assumptions constant, a 100 basis point change in the annual revenue growth rate assumption for this business would result in a change to the estimated fair value of the reporting unit of approximately $8 million. Likewise, a 100 basis point change in the weighted average cost of capital would result in a change to the estimated fair value of the reporting unit of approximately $6 million. While the Calvin Klein Licensing and Advertising International reporting unit was not determined to be fully impaired, it may be at risk of further impairment in the future if the related business does not perform as projected, or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in long-term growth rates or the weighted average cost of capital.

With respect to the Company’s other reporting units that were not determined to be impaired, the Calvin Klein Licensing and Advertising North America reporting unit had an estimated fair value that exceeded its carrying ~~amount.~~amount of $464.4 million by 9%. The carrying amount of goodwill allocated to this reporting unit as of the date of the test was $330.4 million. Holding all other assumptions constant, a 100 basis point change in the annual revenue growth rate assumption for this business would result in a change to the estimated fair value of the reporting unit of approximately $43 million. Likewise, a 100 basis point change in the weighted average cost of capital would result in a change to the estimated fair value of the reporting unit of approximately $34 million. While the Calvin Klein Licensing and Advertising North America reporting unit was not determined to be impaired, it may be at risk of future impairment if the related business does not perform as projected, or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in the long-term growth rate or the weighted average cost of capital.

The ~~Company assessed relevant events and circumstances, including industry, market and macroeconomic conditions, as well as Company and~~fair value of the reporting ~~unit-specific factors. In performing this assessment, the Company considered the results of its quantitative interim~~units for goodwill impairment ~~test performed in the first quarter of 2020~~testing was determined using an income approach and ~~the impact of (i)~~validated using a market approach. The income approach was based on discounted projected future (debt-free) cash flows for each reporting unit. The discount rates applied to these cash flows were based on the weighted average cost of capital for each reporting unit, aswhich takes market participant assumptions into consideration, inclusive of a Company-specific 4% risk premium to account for the additional risk of uncertainty perceived by market participants related to the Company’s overall cash flows due to the macroeconomic environment. Estimated future operating cash flows were discounted at rates of 16.0% or 16.5%, depending on the reporting unit, to account for the relative risks of the ~~beginning~~estimated future cash flows. For the market approach, used to validate the results of the ~~third quarter~~income approach method, the Company used the guideline company method, which analyzes market multiples of ~~2021, which was either favorable to or consistent with the weighted average cost~~adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) for a group of ~~capital~~comparable public companies. The market multiples used in the ~~Company’s 2020 interim test, (ii) a favorable change in the Company’s market capitalization and its implied impact~~valuation are based on the relative strengths and weaknesses of the reporting unit compared to the selected guideline companies. The Company classified the fair values of its reporting units as Level 3 fair value ~~of the Company’s reporting units subsequent~~measurements due to the

2020 interim test, and (iii) the Company’s recent financial performance and updated financial forecasts, which were consistent with or exceeded the projections used in the Company’s 2020 interim test. use of significant unobservable inputs.

~~After assessing these events and circumstances,~~Indefinite-Lived Intangible Assets

For the Company determined that it was not more likely than not that the fair value of each reporting unit with allocated goodwill was less than its carrying amount and concluded that the quantitative goodwill impairment test was not required. No impairment of goodwill resulted from the Company’s2022 annual impairment test ~~in 2021. There continues to be uncertainty about the impacts~~ of the ~~COVID-19 pandemic, including~~TOMMY HILFIGER and Calvin Klein tradenames and the ~~new variant, on the Company’s business. If economic conditions caused by the pandemic do not recover as currently estimated by management or market factors utilized~~reacquired perpetual license rights for TOMMY HILFIGER in ~~the impairment analysis deteriorate, the Company could incur additional goodwill impairment charges in the future.~~

~~2020 Annual Impairment Test~~

~~For the 2020 annual goodwill impairment test~~India performed as of the beginning of the third quarter of ~~2020,~~2022, the Company elected to ~~perform a qualitative assessment~~ first to determine whether it was more likely than not that the fair value of each reporting unit with allocated goodwill was less than its carrying amount. No impairment of goodwill resulted from the Company’s 2020 annual impairment test. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of the Company’s 2020 goodwill annual impairment test.

~~2020 Interim Impairment Test~~

The Company determined in the first quarter of 2020 that the significant adverse impact of the COVID-19 pandemic on the Company’s business, including an unprecedented material decline in revenue and earnings and an extended decline in the Company’s stock price and associated market capitalization, was a triggering event that required the Company to perform a quantitative interim goodwill impairment test. As a result of the interim test performed, the Company recorded $879.0 million of noncash impairment charges in the first quarter of 2020, which were included in goodwill and other intangible asset impairments in the Company’s Consolidated Statement of Operations and allocated to the Company’s segments as follows: $197.7 million in the Heritage Brands Wholesale segment, $287.3 million in the Calvin Klein North America segment, and $394.0 million in the Calvin Klein International segment. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of these impairment charges.

~~Indefinite- Lived Intangible Assets Impairment Testing~~

~~2021 Annual Impairment Test~~

~~For the 2021 annual indefinite-lived intangible assets impairment test performed as of the beginning of the third quarter of 2021, the Company elected to~~ assess qualitative factors ~~first~~ to determine whether it was more likely than not that the fair value of any asset was less than its carrying amount.

For these assets, no impairment was identified as a result of the Company’s most recent quantitative impairment test for these assets and the fair values of these indefinite-lived intangible assets substantially exceeded their carrying amounts. The asset with the least excess fair value had an estimated fair value that exceeded its carrying amount by approximately 183% as of the date of the Company’s most recent quantitative impairment test. The Company assessed relevant events and circumstances, including industry, market and macroeconomic conditions, as well as Company and asset-specific ~~factors. In performing this assessment, the Company considered the results of its interim impairment testing performed~~factors, including changes in ~~the first quarter of 2020 and the impact of (i)~~ the weighted average cost of capital for each of its indefinite-lived intangible assets assince the date of the ~~beginning of the third quarter of 2021, which was either favorable to or consistent with the weighted average cost of capital used in the Company’s 2020 interim~~most recent quantitative test and ~~(ii)~~ the Company’s recent financial performance and updated financial forecasts ~~which were consistent with or exceeded the projections~~as compared to those used in the ~~Company’s 2020 interim test.~~

most recent quantitative tests. After assessing these events and circumstances, the Company determined qualitatively that it was not more likely than not that the fair ~~value~~values of ~~its~~these indefinite-lived intangible assets were less than their carrying amounts and concluded that athe quantitative impairment test was not required. ~~No impairment of indefinite-lived intangible assets resulted from~~

For the ~~Company’s~~2022 annual impairment test ~~in 2021. There continues to be uncertainty about the impacts~~ of the ~~COVID-19 pandemic, including~~Warner’s tradename and the ~~new variant, on~~reacquired perpetual license rights recorded in connection with the Company’s business. If economic conditions caused by the pandemic do not recover as currently estimated by management or market factors utilized in the impairment analysis deteriorate, the Company could incur additional indefinite-lived intangible asset impairment charges in the future.

~~2020 Annual Impairment Test~~

~~For the 2020 annual indefinite-lived intangible assets impairment test~~Australia acquisition performed as of the beginning of the third quarter of ~~2020,~~2022, the Company elected to ~~assess~~bypass the qualitative ~~factors first~~assessment and proceeded directly to ~~determine whether it~~the quantitative impairment test. With regard to the reacquired perpetual license rights, the Company determined that its fair value substantially exceeded its carrying amount and, therefore, the asset was ~~more likely than~~ not ~~that the~~impaired. The fair value of ~~any asset was less than~~the Warner’s tradename exceeded its carrying ~~amount. No~~amount of $95.8 million by 4% at the testing date. Holding all other assumptions constant, a 100 basis point change in the annual revenue growth rate of the related business would result in a change to the estimated fair value of the asset of approximately $7 million. Likewise, a 100 basis point change in the weighted average cost of capital would result in a change to the estimated fair value of the asset of approximately $7 million. While the Warner’s tradename was not determined to be impaired, it may be at risk of future impairment if the related business does not perform as projected, or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in the long-term growth rate or the weighted average cost of capital.

The fair value of the Warner’s tradename was determined using an income-based relief-from-royalty method. Under this method, the value of an asset is estimated based on the hypothetical cost savings that accrue as a result of not having to license the tradename from another party. These cash flows are discounted to present value using a discount rate that factors in the relative risk of the intangible asset. The Company discounted the cash flows used to value the Warner’s tradename at a rate of 16.0%. The fair value of the Company’s reacquired perpetual license rights recorded in connection with the Australia

acquisition was determined using an income approach which estimates the net cash flows directly attributable to the subject intangible asset. These cash flows are discounted to present value using a discount rate that factors in the relative risk of the intangible asset. The Company discounted the cash flows used to value the reacquired perpetual license rights recorded in connection with the Australia acquisition at a rate of 19.0%. The Company classified the fair values of these indefinite-lived intangible assets resulted from the Company’s 2020 annual impairment test. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of the Company’s 2020 indefinite-lived intangible assets annual impairment test.

~~2020 Interim Impairment Test~~

The Company determined in the first quarter of 2020 that the impact of the COVID-19 pandemic on its business was a triggering event that prompted the need to perform an interim impairment testing of its indefinite-lived intangible assets. As a result of the interim test performed, the Company recorded $47.2 million of noncash impairment charges related to indefinite-lived intangible assets in the first quarter of 2020, which was included in goodwill and other intangible asset impairments in the Company’s Consolidated Statement of Operations and allocatedas Level 3 fair value measurements due to the ~~Company’s Heritage Brands Wholesale segment. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Item 8~~use of ~~the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of these impairment charges.~~

~~Finite-Lived Intangible Assets Impairment~~

The Company determined in the first quarter of 2020 that the impact of the pandemic on its business was also a triggering event that prompted the need to perform an impairment test of its finite-lived intangible assets. As a result of the test performed, the Company recorded $7.3 million of noncash impairment charges in the first quarter of 2020 to write down certain finite-lived customer relationship intangible assets to a fair value of zero. These impairments were included in goodwill and other intangible asset impairments in the Company’s Consolidated Statement of Operations and allocated to the Company’s segments as follows: $4.7 million in the Heritage Brands Wholesale segment and $2.6 million in the Calvin Klein North America segment. The Company recorded no further impairments of finite-lived intangible assets in 2020.

~~There have been no~~ significant events or change in circumstances during the thirty-nine weeks ended October 31, 2021 that would indicate the remaining carrying amount of the Company’s finite-lived intangible assets may be impaired as of October 31, 2021. There continues to be uncertainty about the impacts of the COVID-19 pandemic, including the new variant, on the Company’s business. If economic conditions caused by the pandemic do not recover as currently estimated by management, the Company could incur additional finite-lived intangible asset impairment charges in the future.unobservable inputs.

8. RETIREMENT AND BENEFIT PLANS

The Company, as of October ~~31, 2021,~~30, 2022, has 2two noncontributory qualified defined benefit pension plans covering substantially all employees resident in the United States who were hired prior to January 1, 2022, and who meet certain age and service requirements. The plans provide monthly benefits upon retirement generally based on career average compensation and years of credited service. The plans also provide participants with the option to receive their benefits in the form of lump sum payments. Vesting in plan benefits generally occurs after five years of service. The Company refers to these 2two plans as its “Pension Plans.”

The Company also has 3three noncontributory unfunded non-qualified supplemental defined benefit pension plans, including:

–A plan for certain 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 former senior ~~executives (Emanuel Chirico, the Company’s Chairman and former Chief Executive Officer, is the only actively employed participant in this program).~~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 hired prior to January 1, 2022, 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.

The Company refers to these 3three plans as its “SERP Plans.”

1615

The components of net benefit cost recognized were as follows:


		Pension Plans				Pension Plans			Pension Plans						Pension Plans
		Thirteen Weeks Ended				Thirty-Nine Weeks Ended			Thirteen Weeks Ended						Thirty-Nine Weeks Ended
(In millions)	(In millions)	10/31/21		11/1/20			10/31/21			11/1/20		(In millions)	10/30/22		10/31/21		10/30/22		10/31/21

Service cost	Service cost	$	9.9	$	11.3		$	30.4		$	33.7	Service cost	$	7.8	$	9.9	$	23.5	$	30.4
Interest cost	Interest cost	6.2		6.4			18.6			19.2		Interest cost	6.3		6.2		19.0		18.6
Expected return on plan assets	Expected return on plan assets	(11.2)		(10.9)			(33.4)			(32.7)		Expected return on plan assets	(10.4)		(11.2)		(31.3)		(33.4)
Special termination benefits	Special termination benefits	0.2		—			0.5			1.1		Special termination benefits	—		0.2		—		0.5
Heritage Brands transaction gain	Heritage Brands transaction gain	(1.5)		—			(1.5)			—		Heritage Brands transaction gain	—		(1.5)		—		(1.5)
Speedo deconsolidation gain		—		—			—			(2.2)

Total	Total	$	3.6	$	6.8		$	14.6		$	19.1	Total	$	3.7	$	3.6	$	11.2	$	14.6


		SERP Plans				SERP Plans					SERP Plans				SERP Plans
		Thirteen Weeks Ended				Thirty-Nine Weeks Ended					Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(In millions)	(In millions)	10/31/21		11/1/20		10/31/21		11/1/20		(In millions)	10/30/22		10/31/21		10/30/22		10/31/21

Service cost	Service cost	$	1.1	$	1.3	$	3.5	$	4.3	Service cost	$	0.6	$	1.1	$	1.9	$	3.5
Interest cost	Interest cost	0.8		0.9		2.4		2.6		Interest cost	0.7		0.8		2.1		2.4

Special termination benefits	Special termination benefits	1.2		—		1.8		1.9		Special termination benefits	—		1.2		—		1.8
Heritage Brands transaction gain	Heritage Brands transaction gain	(0.3)		—		(0.3)		—		Heritage Brands transaction gain	—		(0.3)		—		(0.3)
Speedo deconsolidation gain		—		—		—		(0.6)

Total	Total	$	2.8	$	2.2	$	7.4	$	8.2	Total	$	1.3	$	2.8	$	4.0	$	7.4

The Company completed the ~~sale of certain of its heritage brands trademarks, as well as certain related inventories of its~~ Heritage Brands ~~business to ABG and other parties~~transaction on the first day of the third quarter of 2021. In connection with the sale, the employment of certain ~~U.S.-based~~ employees based in the United States engaged in the Heritage Brands business was terminated during the third quarter of 2021. However, the Company retained the liability for any deferred vested benefits earned by these employees under its retirement plans. No further benefits ~~will be~~were accrued under the plans for these employees and as a result, the Company recognized a gain of $1.8 million in the third quarter of 2021, with a corresponding decrease to its pension benefit obligation. For certain eligible employees affected by the transaction, the Company provided an enhanced retirement benefit and as a result recognized $1.4 million of special termination benefit costs during the third quarter of 2021 with a corresponding increase to its pension benefit obligation. These amounts were included in other ~~(gain) loss, net~~gain in the Company’s Consolidated Statement of Operations. Please see Note 4, “Acquisitions and Divestitures,” for further discussion of the sale of certain heritage brands trademarks and other assets.

The Company provided enhanced retirement benefits to terminated employees during the second quarter of 2021 and as a result recognized $0.9 million of special termination benefit costs with a corresponding increase to its pension benefit obligation.

The Company announced on July 14, 2020 plans to streamline its North American operations to better align its business with the evolving retail landscape. The Company’s actions included a reduction in its North America office workforce by approximately 450 positions, or 12%, across all three brand businesses and corporate functions. For certain eligible employees affected by the workforce reduction, the Company provided an enhanced retirement benefit and as a result recognized $3.0 million of special termination benefit costs during the second quarter of 2020, with a corresponding increase to its pension benefit obligation. Please see Note 16, “Exit Activity Costs,” for further discussion of these actions.

The Company completed the sale of its Speedo North America business to Pentland in the first quarter of 2020. Upon the closing of the transaction, U.S.-based employees who were engaged primarily in the Speedo North America business terminated their employment with the Company. However, the Company retained the liability for any deferred vested benefits earned by these employees under its retirement plans. No further benefits are being accrued under the plans and as a result, the Company recognized a gain of $2.8 million during the thirty-nine weeks ended November 1, 2020 with a corresponding decrease to its pension benefit obligation. The gain was included in other (gain) loss, net in the Company’s Consolidated Statement of Operations. Please see Note 4, “Acquisitions and Divestitures,” for further discussion of the sale of the Speedo North America business.

The Company also provides certain postretirement health care and life insurance benefits to certain retirees resident in the United States. As a result of the Company’s acquisition of The Warnaco Group, Inc. (“Warnaco”), the Company also provides certain postretirement health care and life insurance benefits to certain Warnaco retirees resident in the United States. Retirees contribute to the cost of the applicable plan, both of which are unfunded and frozen. The Company refers to these 2two plans as its “Postretirement Plans.” Net benefit cost related to the Postretirement Plans was immaterial for the thirteen and thirty-nine weeks ended October 30, 2022 and October 31, ~~2021 and November 1, 2020.~~2021.

The components of net benefit cost are recorded in the Company’s Consolidated Statements of Operations as follows: (i) the service cost component is recorded in selling, general and administrative (“SG&A”) expenses, (ii) the Heritage Brands transaction gain and the related special termination benefit costs ~~as well as the Speedo deconsolidation gain components~~ are recorded in other ~~(gain) loss, net,~~gain, and (iii) the other components are recorded in non-service related pension and postretirement income.

Currently, the Company does not expect to make material contributions to the Pension Plans in ~~2021.~~2022. The Company’s actual contributions may differ from planned contributions due to many factors, including changes in tax and other laws, as well as significant differences between expected and actual pension asset performance or interest rates.

9. DEBT

Short-Term Borrowings

The Company had ~~$27.8~~$18.0 million of borrowings outstanding under short-term lines of credit, overdraft facilities and short-term revolving credit facilities denominated in various foreign currencies as of October ~~31, 2021.~~30, 2022. The weighted average interest rate on funds borrowed as of October ~~31, 2021~~30, 2022 was ~~0.31%~~0.17%. These facilities provided for borrowings of up to ~~$212.8~~$182.6 million based on exchange rates in effect on October ~~31, 2021~~30, 2022 and are utilized primarily to fund working capital needs. The maximum amount of borrowings outstanding under these facilities during the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was ~~$40.8~~$21.9 million.

Commercial Paper

The Company has the ability to issue, from time to time, unsecured commercial paper notes with maturities that vary but do not exceed 397 days from the date of issuance primarily to fund working capital needs. The Company had $80.0 million of borrowings outstanding under the commercial paper note program as of October 30, 2022. The weighted average interest rate on funds borrowed under the program as of October 30, 2022 was 4.05%. The maximum amount of borrowings temporarily outstanding under the program during the thirty-nine weeks ended October 30, 2022 was $130.0 million.

2021 Unsecured Revolving Credit Facility

On April 28, 2021, the Company replaced its 364-day $275.0 million United States dollar-denominated unsecured revolving credit facility, which matured on April 7, 2021, ~~(the “2020 facility”),~~ with a ~~new~~ 364-day $275.0 million United States dollar-denominated unsecured revolving credit facility (the “2021 facility”). The 2021 facility ~~will mature~~matured on April 27, ~~2022.~~2022, and was not replaced. The Company paid $0.8 million of debt issuance costs in connection with the ~~transaction,~~2021 facility, which ~~are being~~were amortized over the term of the debt agreement. The Company had no borrowings outstanding under ~~these facilities~~the 2021 facility during ~~the thirty-nine weeks ended October 31, 2021.~~2022 prior to its maturity on April 27, 2022.

The borrowings under the 2021 facility bear interest at variable rates calculated in a manner consistent with the 2020 facility. The current applicable margin with respect to the borrowings as of October 31, 2021 was 1.375% for adjusted Eurocurrency rate loans and 0.375% for base rate loans. The applicable margin for borrowings is subject to adjustment (i) after the date of delivery of the compliance certificate and financial statements, with respect to each of the Company’s fiscal quarters, based upon the Company’s net leverage ratio or (ii) after the date of delivery of notice of a change in the Company’s public debt rating by Standard & Poor’s or Moody’s.

The 2021 facility is subject to other terms and conditions and financial and non-financial covenants consistent with the 2020 facility. Please see Note 8, “Debt,” in the Notes to the Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of the 2020 facility.

Long-Term Debt

The carrying amounts of the Company’s long-term debt were as follows:


(In millions)	(In millions)	10/31/21		1/31/21		11/1/20		(In millions)	10/30/22		1/30/22		10/31/21

Senior unsecured Term Loan A facilities due 2024 (1)(2)	Senior unsecured Term Loan A facilities due 2024 (1)(2)	$	743.4	$	1,608.6	$	1,590.6	Senior unsecured Term Loan A facilities due 2024 (1)(2)	$	437.2	$	513.5	$	743.4

7 3/4% debentures due 2023	7 3/4% debentures due 2023	99.8		99.8		99.7		7 3/4% debentures due 2023	99.9		99.8		99.8
3 5/8% senior unsecured euro notes due 2024 (2)	3 5/8% senior unsecured euro notes due 2024 (2)	606.8		631.0		607.9		3 5/8% senior unsecured euro notes due 2024 (2)	520.0		580.8		606.8
4 5/8% senior unsecured notes due 2025	4 5/8% senior unsecured notes due 2025	495.4		494.5		494.2		4 5/8% senior unsecured notes due 2025	496.7		495.7		495.4
3 1/8% senior unsecured euro notes due 2027 (2)	3 1/8% senior unsecured euro notes due 2027 (2)	692.6		720.9		694.6		3 1/8% senior unsecured euro notes due 2027 (2)	592.6		662.6		692.6
Total	Total	2,638.0		3,554.8		3,487.0		Total	2,146.4		2,352.4		2,638.0
Less: Current portion of long-term debt	Less: Current portion of long-term debt	32.8		41.1		22.9		Less: Current portion of long-term debt	37.3		34.8		32.8
Long-term debt	Long-term debt	$	2,605.2	$	3,513.7	$	3,464.1	Long-term debt	$	2,109.1	$	2,317.6	$	2,605.2

(1) The outstanding principal balance for the United States dollar-denominated Term Loan A facility and the euro-denominated Term Loan A facility was ~~$200.0 million~~zero and ~~€468.8~~€440.6 million, respectively, as of October ~~31, 2021.~~30, 2022.

(2) The carrying amount of the euro-denominated Term Loan A facility and the senior unsecured euro notes includes the impact of changes in the exchange rate of the United States dollar against the euro.

Please see Note 12, “Fair Value Measurements,” for the fair value of the Company’s long-term debt as of October 30, 2022, January 30, 2022 and October 31, ~~2021, January 31, 2021 and November 1, 2020.~~2021.

The Company’s mandatory long-term debt repayments for the remainder of ~~2021~~2022 through ~~2026~~2027 were as follows as of October ~~31, 2021:~~30, 2022:


(In millions)	(In millions)			(In millions)
Fiscal Year	Fiscal Year	Amount (1)		Fiscal Year	Amount (1)
Remainder of 2021		$	7.3
2022		36.4
Remainder of 2022				Remainder of 2022	$	9.3
2023	2023	143.7		2023	137.3
2024	2024	1,269.9		2024	914.2
2025	2025	500.0		2025	500.0
2026	2026	—		2026	—
2027				2027	597.1

(1) A portion of the Company’s mandatory long-term debt repayments is denominated in euros and subject to changes in the exchange rate of the United States dollar against the euro.

Total debt repayments for the remainder of ~~2021~~2022 through ~~2026~~2027 exceed the total carrying amount of the Company’s ~~Term Loan A facilities, 7 3/4% debentures due 2023, 3 5/8% senior euro notes due 2024 and 4 5/8% senior notes due 2025~~debt as of October ~~31, 2021~~30, 2022 because the carrying amount reflects the unamortized portions of debt issuance costs and the original issue discounts.

As of October 31, 2021, after taking into account the effect of the Company’s interest rate swap agreements discussed in the section entitled “2019 Senior Unsecured Credit Facilities,” which were in effect as of such date,30, 2022, approximately ~~75%~~80% of the Company’s long-term debt had fixed interest rates, with the remainder at variable interest rates.

2019 Senior Unsecured Credit Facilities

The Company has senior unsecured credit facilities due April 29, 2024 (as amended, the “2019 facilities”) that consist of a ~~$1,093.2 million United States dollar-denominated Term Loan A facility (the “USD TLA facility”), a~~ €500.0 million euro-denominated Term Loan A facility (the “Euro TLA facility” ~~and together with the USD TLA facility, the “TLA facilities”~~) and senior unsecured revolving credit facilities consisting of (i) a $675.0 million United States dollar-denominated revolving credit facility, (ii) a CAD $70.0 million Canadian dollar-denominated revolving credit facility available in United States dollars or Canadian dollars, (iii) a €200.0 million euro-denominated revolving credit facility available in euro, Australian dollars and other agreed foreign currencies and (iv) a $50.0 million United States dollar-denominated revolving credit facility available in United

States dollars or Hong Kong dollars. The 2019 facilities also consisted of a $1,093.2 million United States dollar-denominated Term Loan A facility (the “USD TLA facility”). The Company repaid the outstanding principal balance under its USD TLA facility in 2021. Borrowings under the 2019 facilities bear interest at variable rates calculated in the manner set forth in the terms of the 2019 facilities.

The Company made payments totaling $844.2 million and $10.6 million on its term loans under the 2019 facilities during the thirty-nine weeks ended October 31, 2021 and November 1, 2020, respectively.

The Company had loans outstanding of ~~$743.4~~$437.2 million, net of debt issuance costs and based on applicable exchange rates, under the Euro TLA ~~facilities,~~facility, no borrowings outstanding under the senior unsecured revolving credit facilities, and ~~$15.5~~$10.8 million of outstanding letters of credit under the senior unsecured revolving credit facilities as of October 30, 2022.

The Company made payments totaling $22.5 million and $844.2 million on its term loans under the 2019 facilities during the thirty-nine weeks ended October 30, 2022 and October 31, ~~2021.~~2021, respectively.

The current applicable margin with respect to the Euro TLA ~~facilities~~facility and each revolving credit facility as of October ~~31, 2021~~30, 2022 was ~~1.375%~~1.250% for adjusted Eurocurrency rate loans and ~~0.375%~~0.250% for base rate or Canadian prime rate loans. The applicable margin for borrowings under the Euro TLA ~~facilities~~facility and the revolving credit facilities is subject to adjustment (i) after the date of delivery of the compliance certificate and financial statements, with respect to each of the Company’s fiscal quarters, based upon the Company’s net leverage ratio or (ii) after the date of delivery of notice of a change in the Company’s public debt rating by Standard & Poor’s or Moody’s.

The Company entered into interest rate swap agreements designed with the intended effect of converting notional amounts of its variable rate debt obligation to fixed rate debt. Under the terms of the agreements, for ~~the~~any outstanding notional amount, the Company’s exposure to fluctuations in the one-month London interbank offered rate (“LIBOR”) is eliminated and the Company pays a fixed rate plus the current applicable margin. The following interest rate swap agreements were entered into or in effect during the thirty-nine weeks ended October 31, 2021 ~~and/~~(no interest rate swap agreements were entered into or ~~November 1, 2020:~~in effect during the thirty-nine weeks ended October 30, 2022):


(In millions)	(In millions)									(In millions)
Designation Date	Designation Date	Commencement Date	Initial Notional Amount		Notional Amount Outstanding as of October 31, 2021			Fixed Rate	Expiration Date	Designation Date	Commencement Date	Initial Notional Amount		Notional Amount Outstanding as of October 30, 2022			Fixed Rate	Expiration Date
March 2020	March 2020	February 2021	$	50.0	$	50.0		0.562%	February 2023	March 2020	February 2021	$	50.0	$	—	(1)	0.562%	February 2023
February 2020	February 2020	February 2021	50.0		50.0			1.1625%	February 2023	February 2020	February 2021	50.0		—		(1)	1.1625%	February 2023
February 2020	February 2020	February 2020	50.0		—		(1)	1.2575%	February 2023	February 2020	February 2020	50.0		—		(1)	1.2575%	February 2023
August 2019	August 2019	February 2020	50.0		50.0			1.1975%	February 2022	August 2019	February 2020	50.0		—		(1)	1.1975%	February 2022
June 2019	June 2019	February 2020	50.0		—		(1)	1.409%	February 2022	June 2019	February 2020	50.0		—		(1)	1.409%	February 2022
June 2019	June 2019	June 2019	50.0		—			1.719%	July 2021	June 2019	June 2019	50.0		—			1.719%	July 2021
January 2019	January 2019	February 2020	50.0		—			2.4187%	February 2021	January 2019	February 2020	50.0		—			2.4187%	February 2021
November 2018	November 2018	February 2019	139.2		—			2.8645%	February 2021	November 2018	February 2019	139.2		—			2.8645%	February 2021
October 2018	October 2018	February 2019	115.7		—			2.9975%	February 2021	October 2018	February 2019	115.7		—			2.9975%	February 2021
June 2018	June 2018	August 2018	50.0		—			2.6825%	February 2021	June 2018	August 2018	50.0		—			2.6825%	February 2021
June 2017		February 2018	306.5		—			1.566%	February 2020

(1) The Company terminated ~~early~~in 2021 the ~~June 2019 and February 2020~~ interest rate swap agreements due to expire in February 2022 and February 2023 ~~respectively,~~ in connection with the ~~$129.6 million voluntary long-term debt~~early repayment ~~made during~~ of the ~~third quarter of 2021. Please see Note 11, “Derivative Financial Instruments,” for further discussion.~~outstanding principal balance under its USD TLA facility.

The 2019 facilities require the Company to comply with customary affirmative, negative and financial covenants, including a minimum interest coverage ratio and a maximum net leverage ratio. A breach of any of these operating or financial covenants would result in a default under the 2019 facilities. If an event of default occurs and is continuing, the lenders could elect to declare all amounts then outstanding, together with accrued interest, to be immediately due and payable, which would result in acceleration of the Company’s other debt. Given the disruption to the Company’s business caused by the COVID-19 pandemic and to ensure financial flexibility, the Company amended these facilities in June 2020 to provide temporary relief of certain financial covenants until the date on which a compliance certificate was delivered for the second quarter of 2021 (the “relief period”) unless the Company elected earlier to terminate the relief period and satisfied the conditions for doing so (the “June 2020 Amendment”). The June 2020 Amendment provided for the following during the relief period, among other things, the (i) suspension of compliance with the maximum net leverage ratio through and including the first quarter of 2021, (ii) suspension of the minimum interest coverage ratio through and including the first quarter of 2021, (iii) addition of a minimum liquidity covenant of $400.0 million, (iv) addition of a restricted payment covenant and (v) imposition of stricter limitations on the

incurrence of indebtedness and liens. The limitation on restricted payments required that the Company suspend payments of dividends on its common stock and purchases of shares under its stock repurchase program during the relief period. The June 2020 Amendment also provided that during the relief period the applicable margin would be increased 0.25%. In addition, under the June 2020 Amendment, in the event there was a specified credit ratings downgrade by Standard & Poor’s and Moody’s during the relief period (as set forth in the June 2020 Amendment), within 120 days thereafter (i) the Company would have been required to cause each of its wholly owned United States subsidiaries (subject to certain customary exceptions) to become a guarantor under the 2019 facilities and (ii) the Company and each subsidiary guarantor would have been required to grant liens in favor of the collateral agent on substantially all of their respective assets (subject to customary exceptions). The Company terminated early, effective June 10, 2021, this temporary relief period and, as a result, the various provisions in the June 2020 Amendment described above are no longer in effect. Following the termination of the relief period, the Company is now required to maintain a minimum interest coverage ratio and a maximum net leverage ratio, calculated in the manner set forth in the terms of the 2019 facilities. ~~As of October 31, 2021,~~Please see Note 8, “Debt,” in the ~~Company was~~Notes to Consolidated Financial Statements included in ~~compliance with all applicable financial and non-financial covenants under these facilities.~~

The Company expects to maintain compliance with the financial covenants under the 2019 facilities based on its current forecasts. If earnings and operating cash flows do not recover as currently estimated by management as a resultItem 8 of the ~~continued impacts~~Company’s Annual Report on Form 10-K for the year ended January 30, 2022 for further discussion of the COVID-19 pandemic, including the new variant, there can be no assurance that the Company will be able to maintain compliance with these financial covenants in the future. There can be no assurance that the Company would be able to obtain future waivers in a timely manner, on terms acceptable to the Company, or at all. If the Company were not able to maintain compliance or obtain a future covenant waiver under the 2019 ~~facilities, there can be no assurance that the Company would be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay such~~ facilities.

7 3/4% Debentures Due 2023

The Company has outstanding $100.0 million of debentures due November 15, 2023 that accrue interest at the rate of 7 3/4%. The debentures are not redeemable at the Company’s option prior to maturity.

3 5/8% Euro Senior Notes Due 2024

The Company has outstanding €525.0 million principal amount of 3 5/8% senior notes due July 15, 2024, of which €175.0 million principal amount was issued on April 24, 2020. The Company paid €2.8 million ($3.0 million based on exchange rates in effect on the payment date) of fees in connection with the issuance of the additional €175.0 million notes, which are being amortized over the term of the notes.2024. The Company may redeem some or all of these notes at any time prior to April 15, 2024 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, the Company may redeem some or all of these notes on or after April 15, 2024 at their principal amount plus any accrued and unpaid interest.

4 5/8% Senior Notes Due 2025

The Company ~~issued on July 10, 2020,~~has outstanding $500.0 million principal amount of 4 5/8% senior notes due July 10, 2025. ~~The Company paid $6.2 million of fees in connection with the issuance of the notes, which are being amortized over the term of the notes.~~ The Company may redeem some or all of these notes at any time prior to June 10, 2025 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, the Company may redeem some or all of these notes on or after June 10, 2025 at their principal amount plus any accrued and unpaid interest.

3 1/8% Euro Senior Notes Due 2027

The Company has outstanding €600.0 million principal amount of 3 1/8% senior notes due December 15, 2027. The Company may redeem some or all of these notes at any time prior to September 15, 2027 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, the Company may redeem some or all of these notes on or after September 15, 2027 at their principal amount plus any accrued and unpaid interest.

The Company’s financing arrangements contain financial and non-financial covenants and customary events of default. As of October ~~31, 2021,~~30, 2022, the Company was in compliance with all applicable financial and non-financial covenants under its financing arrangements.

The Company also has standby letters of credit outside of its 2019 facilities primarily to collateralize the Company’s insurance and lease obligations. The Company had ~~$53.0~~$57.0 million of these standby letters of credit outstanding as of October ~~31, 2021.~~30, 2022.

Please see Note 8, “Debt,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January ~~31, 2021~~30, 2022 for further discussion of the Company’s debt.

10. INCOME TAXES

The effective income tax rates for the thirteen weeks ended October 30, 2022 and October 31, 2021 were 19.8% and ~~November 1, 2020 were~~ 20.7% ~~and 21.6%~~, respectively. The effective income tax rate for the thirteen weeks ended October 30, 2022 reflected a $(46.1) million income tax benefit recorded on $(232.8) million of pre-tax losses. The effective income tax rate for the thirteen weeks ended October 31, 2021 reflected a $72.9 million income tax expense recorded on $352.6 million of pre-tax income.

The effective income tax ~~rate~~rates for the thirteen weeks ended ~~November 1, 2020 reflected a $19.1 million~~October 30, 2022 and October 31, 2021 were relatively flat as compared to the United States statutory income tax ~~expense recorded on $88.6 million of pre-tax income.~~rate.

The effective income tax rates for the thirty-nine weeks ended October 30, 2022 and October 31, 2021 were 45.1% and ~~November 1, 2020 were~~ 27.4% ~~and 8.9%~~, respectively. The effective income tax rate for the thirty-nine weeks ended October 30, 2022 reflected a $50.7 million income tax expense recorded on $112.4 million of pre-tax income. The effective income tax rate for the thirty-nine weeks ended October 31, 2021 reflected a $212.1 million income tax expense recorded on $773.3 million of pre-tax income.

The effective income tax rate for the thirty-nine weeks ended ~~November 1, 2020 reflected a $(105.4) million income tax benefit recorded on $(1,184.8) million of pre-tax losses.~~

~~The effective income tax rate for the thirteen weeks ended~~ October ~~31, 2021~~30, 2022 was ~~relatively flat as compared to~~higher than the United States statutory income tax ~~rate.~~rate primarily due to (i) the impact of the $417.1 million noncash goodwill impairment charge recorded during the third quarter of 2022, which resulted in a pre-tax loss with no tax benefit and is factored into the annualized effective tax rate, and (ii) the mix of foreign and domestic pre-tax results, partially offset by (iii) the favorable impact on certain liabilities for uncertain tax positions resulting from the expiration of applicable statutes of limitation and the settlement of a multi-year audit from an international jurisdiction.

The effective income tax rate for the thirty-nine weeks ended October 31, 2021 was higher than the United States statutory income tax rate primarily due to the tax on foreign earnings in excess of a deemed return on tangible assets of foreign corporations (known as “GILTI”) and the mix of foreign and domestic pre-tax ~~results~~.

The effective income tax rate for the thirteen weeks ended November 1, 2020 was relatively flat as compared to the United States statutory income tax rate and reflected (i) the benefit of certain discrete items, including the favorable impact on certain liabilities for uncertain tax positions resulting from the expiration of applicable statutes of limitation, which resulted in a decrease to the Company’s effective income tax rate of 27.7%, offset by (ii) the impact of the $879.0 million of pre-tax goodwill impairment charges recorded during the first quarter of 2020, which were mostly non-deductible for tax purposes and factored into the Company’s annualized effective income tax rate, and resulted in an increase to the Company’s effective income tax rate of 6.3%, (iii) the tax effects of GILTI and (iv) the mix of foreign and domestic pre-tax results.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act, with tax provisions primarily focused on implementing a 15% corporate minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases. The corporate minimum tax will be effective ~~income~~in fiscal 2023 and the excise tax ~~benefit rate for the thirty-nine weeks ended November~~is effective January 1, 2020 was lower than the United States statutory income tax rate primarily due to (i) the impact of the $879.0 million of pre-tax goodwill impairment charges recorded during the first quarter of 2020, which were mostly non-deductible for tax purposes and factored into2023. Based on the Company’s ~~annualized effective income tax rate, and resulted in~~current analysis, it does not expect the new law to have a decrease to the Company’s effective income tax rate of 13.3%, (ii) the tax effects of GILTI and (iii) the mix of foreign and domestic pre-tax results, partially offset by (iv) the benefit of certain discrete items, including the favorablematerial impact on ~~certain liabilities for uncertain tax positions resulting from the expiration of applicable statutes of limitation, which resulted in an increase to the Company’s effective income tax rate of 2.0%.~~its consolidated financial statements.

The Company files income tax returns in more than 40 international jurisdictions each year. A substantial amount of the Company’s earnings are in international jurisdictions, particularly the Netherlands and Hong Kong SAR, where the income tax rates, when coupled with special rates levied on income from certain of the Company’s jurisdictional activities, ~~are~~have historically been lower than the United States statutory income tax rate. In 2022, the Company no longer benefits from these special rates.

11. DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges

The Company has exposure to changes in foreign currency exchange rates related to anticipated cash flows associated with certain international inventory purchases. The Company uses foreign currency forward exchange contracts to hedge against a portion of this exposure.

The Company also has exposure to interest rate volatility related to its ~~term loans under the~~ 2019 facilities ~~and the 2021 facility.~~borrowings, which bear interest at a rate equal to an applicable margin plus a variable rate. The Company ~~has entered~~from time to time enters into interest rate swap agreements to hedge against a portion of the exposure related to its term loans under the 2019 facilities. ~~The Company had no borrowings~~No interest rate swap agreements were outstanding ~~under~~as of October 30, 2022 and January 30, 2022. As of October 30, 2022, approximately 80% of the ~~2021 facility during~~Company’s long-term debt was at a fixed interest rate, with the ~~thirty-nine weeks ended October 31, 2021.~~remaining (euro-denominated) balance at a variable rate. Please see Note 9, “Debt,” for further discussion of the 2019 facilities ~~the 2021 facility~~ and these agreements.

The Company records the foreign currency forward exchange contracts and interest rate swap agreements at fair value in its Consolidated Balance Sheets and does not net the related assets and liabilities. The foreign currency forward exchange contracts associated with certain international inventory purchases and ~~the~~any interest rate swap agreements are designated as effective hedging instruments (collectively, “cash flow hedges”). As such, the changes in the fair value of the cash flow hedges are recorded in equity as a component of accumulated other comprehensive loss (“AOCL”). No amounts were excluded from effectiveness testing.

During the thirteen weeks ended October 31, 2021, the Company dedesignated certain cash flow hedges in connection with the ~~$129.6 million~~ voluntary ~~long-term debt repayment~~payments that were made ~~during~~or expected to be made at the ~~third quarter of 2021 and the expected voluntary long-term debt repayments for the fourth quarter of 2021,~~time under its USD TLA facility, as the underlying interest payments ~~on the Company’s USD TLA facility~~ were no longer probable to occur, which resulted in the release of a $1.3 million loss from AOCL into the Company’s Consolidated Statement of Operations. During the thirty-nine weeks ended November 1, 2020, the Company dedesignated certain cash flow hedges due to the impacts of the COVID-19 pandemic on its business, which resulted in the release of an immaterial gain from AOCL into the Company’s Consolidated Statement of Operations. The Company continues to believe as of October 31, 2021 that transactions relating to its designated cash flow hedges are probable to occur.

Net Investment Hedges

The Company has exposure to changes in foreign currency exchange rates related to the value of its investments in foreign subsidiaries denominated in a currency other than the United States dollar. To hedge against a portion of this exposure, the Company designated the carrying amounts of its (i) €600.0 million principal amount of 3 1/8% senior notes due 2027 and (ii) €525.0 million principal amount of 3 5/8% senior notes due 2024 (collectively, “foreign currency borrowings”), that were issued by PVH Corp., a U.S.-based entity, as net investment hedges of its investments in certain of its foreign subsidiaries that use the euro as their functional currency. Please see Note 9, “Debt,” for further discussion of the Company’s foreign currency borrowings.

The Company records the foreign currency borrowings at carrying value in its Consolidated Balance Sheets. The carrying value of the foreign currency borrowings is remeasured at the end of each reporting period to reflect changes in the foreign currency exchange spot rate. Since the foreign currency borrowings are designated as net investment hedges, such remeasurement is recorded in equity as a component of AOCL. The fair value and the carrying value of the foreign currency borrowings designated as net investment hedges were $1,013.9 million and $1,112.6 million, respectively, as of October 30, 2022, $1,361.7 million and $1,243.4 million, respectively, as of January 30, 2022 and $1,447.5 million and $1,299.4 million, respectively, as of October 31, ~~2021, $1,514.2 million and $1,351.9 million, respectively, as of January 31, 2021 and $1,363.2 million and $1,302.5 million, respectively, as of November 1, 2020.~~2021. The Company evaluates the effectiveness of its net investment hedges at inception and at the beginning of each quarter thereafter. No amounts were excluded from effectiveness testing.

Undesignated Contracts

The Company records immediately in earnings changes in the fair value of hedges that are not designated as effective hedging instruments (“undesignated contracts”), which primarily include foreign currency forward exchange contracts related to third party and intercompany transactions, and intercompany loans that are not of a long-term investment nature. Any gains and losses that are immediately recognized in earnings on such contracts are largely offset by the remeasurement of the underlying balances.

The Company does not use derivative or non-derivative financial instruments for trading or speculative purposes. The cash flows from the Company’s hedges are presented in the same category in the Company’s Consolidated Statements of Cash Flows as the items being hedged.

2321

The following table summarizes the fair value and presentation of the Company’s derivative financial instruments in its Consolidated Balance Sheets:


		Assets												Liabilities													Assets												Liabilities
		10/31/21				1/31/21				11/1/20				10/31/21				1/31/21				11/1/20					10/30/22				1/30/22				10/31/21				10/30/22				1/30/22				10/31/21
(In millions)	(In millions)	Other Current Assets		Other Assets		Other Current Assets		Other Assets		Other Current Assets		Other Assets		Accrued Expenses		Other Liabilities		Accrued Expenses		Other Liabilities		Accrued Expenses		Other Liabilities		(In millions)	Other Current Assets		Other Assets		Other Current Assets		Other Assets		Other Current Assets		Other Assets		Accrued Expenses		Other Liabilities		Accrued Expenses		Other Liabilities		Accrued Expenses		Other Liabilities
Contracts designated as cash flow hedges:	Contracts designated as cash flow hedges:																									Contracts designated as cash flow hedges:
Foreign currency forward exchange contracts (inventory purchases)	Foreign currency forward exchange contracts (inventory purchases)	$	25.1	$	1.3	$	1.2	$	0.1	$	6.4	$	1.0	$	1.4	$	0.1	$	29.0	$	0.4	$	11.3	$	0.1	Foreign currency forward exchange contracts (inventory purchases)	$	95.3	$	1.8	$	48.0	$	2.7	$	25.1	$	1.3	$	2.9	$	—	$	0.6	$	—	$	1.4	$	0.1
Interest rate swap agreements	Interest rate swap agreements	—		—		—		—		—		—		0.3		—		3.2		1.5		5.6		2.0		Interest rate swap agreements	—		—		—		—		—		—		—		—		—		—		0.3		—
Total contracts designated as cash flow hedges	Total contracts designated as cash flow hedges	25.1		1.3		1.2		0.1		6.4		1.0		1.7		0.1		32.2		1.9		16.9		2.1		Total contracts designated as cash flow hedges	95.3		1.8		48.0		2.7		25.1		1.3		2.9		—		0.6		—		1.7		0.1
Undesignated contracts:	Undesignated contracts:																									Undesignated contracts:
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts	3.4		—		2.5		—		3.5		—		2.1		—		1.6		—		2.3		—		Foreign currency forward exchange contracts	0.5		—		5.6		—		3.4		—		3.1		—		1.1		—		2.1		—
Interest rate swap agreements	Interest rate swap agreements	—		—		—		—		—		—		0.5		0.1		—		—		—		—		Interest rate swap agreements	—		—		—		—		—		—		—		—		—		—		0.5		0.1
Total undesignated contracts	Total undesignated contracts	3.4		—		2.5		—		3.5		—		2.6		0.1		1.6		—		2.3		—		Total undesignated contracts	0.5		—		5.6		—		3.4		—		3.1		—		1.1		—		2.6		0.1
Total	Total	$	28.5	$	1.3	$	3.7	$	0.1	$	9.9	$	1.0	$	4.3	$	0.2	$	33.8	$	1.9	$	19.2	$	2.1	Total	$	95.8	$	1.8	$	53.6	$	2.7	$	28.5	$	1.3	$	6.0	$	—	$	1.7	$	—	$	4.3	$	0.2

The notional amount outstanding of foreign currency forward exchange contracts was ~~$1,240.3~~$1,307.0 million at October ~~31, 2021.~~30, 2022. Such contracts expire principally between November ~~2021~~2022 and March ~~2023.~~2024.

2422

The following tables summarize the effect of the Company’s hedges designated as cash flow and net investment hedging instruments:


		Gain (Loss) Recognized in Other Comprehensive (Loss) Income								Gain Recognized in Other Comprehensive Loss

(In millions)	(In millions)						(In millions)	Gain Recognized in Other Comprehensive Loss

Thirteen Weeks Ended	Thirteen Weeks Ended					10/31/21	11/1/20					10/30/22					10/31/21
Foreign currency forward exchange contracts (inventory purchases)	Foreign currency forward exchange contracts (inventory purchases)	$	17.2	$	13.1							Foreign currency forward exchange contracts (inventory purchases)				$	24.4		$	17.2
Interest rate swap agreements	Interest rate swap agreements	0.1		0.3						Interest rate swap agreements			—					0.1
Foreign currency borrowings (net investment hedges)	Foreign currency borrowings (net investment hedges)	27.4		16.7					Foreign currency borrowings (net investment hedges)	27.6				27.4
Total	Total	$	44.7	$	30.1				Total	$	52.0			$	44.7

Thirty-Nine Weeks Ended	Thirty-Nine Weeks Ended	10/31/21		11/1/20					Thirty-Nine Weeks Ended	10/30/22				10/31/21
Foreign currency forward exchange contracts (inventory purchases)	Foreign currency forward exchange contracts (inventory purchases)	$	82.0	$	(23.0)				Foreign currency forward exchange contracts (inventory purchases)	$	70.2			$	82.0
Interest rate swap agreements	Interest rate swap agreements	0.2		(9.7)					Interest rate swap agreements	—				0.2
Foreign currency borrowings (net investment hedges)	Foreign currency borrowings (net investment hedges)	54.7		(76.2)					Foreign currency borrowings (net investment hedges)	132.6				54.7
Total	Total	$	136.9	$	(108.9)				Total	$	202.8			$	136.9


		Amount of (Loss) Gain Reclassified from AOCL into (Expense) Income, Consolidated Statements of Operations Location, and Total Amount of Consolidated Statements of Operations Line Item										Amount of Gain (Loss) Reclassified from AOCL into Income (Expense), Consolidated Statements of Operations Location, and Total Amount of Consolidated Statements of Operations Line Item
(In millions)	(In millions)	Amount Reclassified				Location	Total Statements of Operations Amount				(In millions)	Amount Reclassified				Location	Total Statements of Operations Amount

Thirteen Weeks Ended	Thirteen Weeks Ended	10/31/21		11/1/20			10/31/21		11/1/20		Thirteen Weeks Ended	10/30/22		10/31/21			10/30/22		10/31/21
Foreign currency forward exchange contracts (inventory purchases)	Foreign currency forward exchange contracts (inventory purchases)	$	(6.6)	$	5.3	Cost of goods sold	$	987.4	$	1,016.8	Foreign currency forward exchange contracts (inventory purchases)	$	9.9	$	(6.6)	Cost of goods sold	$	1,006.6	$	987.4
Interest rate swap agreements	Interest rate swap agreements	(1.3)		—		SG&A (1)	1,097.3		987.2		Interest rate swap agreements	—		(1.3)		SG&A (1)	1,085.0		1,097.3
Interest rate swap agreements	Interest rate swap agreements	(0.7)		(3.3)		Interest expense	25.9		34.4		Interest rate swap agreements	—		(0.7)		Interest expense	21.1		25.9
Total	Total	$	(8.6)	$	2.0						Total	$	9.9	$	(8.6)

Thirty-Nine Weeks Ended	Thirty-Nine Weeks Ended	10/31/21		11/1/20			10/31/21		11/1/20		Thirty-Nine Weeks Ended	10/30/22		10/31/21			10/30/22		10/31/21
Foreign currency forward exchange contracts (inventory purchases)	Foreign currency forward exchange contracts (inventory purchases)	$	1.2	$	8.4	Cost of goods sold	$	2,817.2	$	2,392.3	Foreign currency forward exchange contracts (inventory purchases)	$	13.6	$	1.2	Cost of goods sold	$	2,803.1	$	2,817.2
Interest rate swap agreements	Interest rate swap agreements	(1.3)		—		SG&A (1)	3,198.7		2,809.5		Interest rate swap agreements	—		(1.3)		SG&A (1)	3,194.8		3,198.7
Interest rate swap agreements	Interest rate swap agreements	(2.6)		(7.9)		Interest expense	83.7		89.6		Interest rate swap agreements	—		(2.6)		Interest expense	65.9		83.7
Total	Total	$	(2.7)	$	0.5						Total	$	13.6	$	(2.7)

(1) The Company dedesignated certain cash flow hedges related to its interest rate swap agreements during the thirteen weeks ended October 31, 2021 as discussed in the section entitled “Cash Flow Hedges” above.

A net gain in AOCL on foreign currency forward exchange contracts at October ~~31, 2021~~30, 2022 of ~~$21.4~~$113.8 million is estimated to be reclassified in the next 12 months in the Company’s Consolidated Statement of Operations to cost of goods sold as the underlying inventory hedged by such forward exchange contracts is sold. ~~In addition, a net loss in AOCL for interest rate swap agreements at October 31, 2021 of $0.6 million is estimated to be reclassified to interest expense within the next 12 months.~~ Amounts recognized in AOCL for foreign currency borrowings would be recognized in earnings only upon the sale or substantially complete liquidation of the hedged net investment.

2523

The following table summarizes the effect of the Company’s undesignated contracts recognized in SG&A expenses in its Consolidated Statements of Operations:

(In millions)

(Loss) Gain Recognized in (Expense) Income

(In millions)

Gain (Loss) Recognized in Income (Expense)

Thirteen Weeks Ended

10/31/21

11/1/20

Thirteen Weeks Ended

10/30/22

10/31/21

Foreign currency forward exchange contracts

(4.7)

2.0

Foreign currency forward exchange contracts

8.7

(4.7)

Thirty-Nine Weeks Ended

10/31/21

11/1/20

Thirty-Nine Weeks Ended

10/30/22

10/31/21

Foreign currency forward exchange contracts

(6.9)

(2.1)

Foreign currency forward exchange contracts

35.3

(6.9)

The Company dedesignated certain cash flow hedges related to its interest rate swap agreements during the thirteen weeks ended October 31, 2021 as discussed in the section entitled “Cash Flow Hedges” above. Following the dedesignation, the effect of these interest rate swap agreements recognized in SG&A expenses in the Company’s Consolidated Statements of Operations was immaterial for the thirteen weeks ended October 31, 2021.

The Company had no derivative financial instruments with credit risk-related contingent features underlying the related contracts as of October ~~31, 2021.~~30, 2022.

12. FAIR VALUE MEASUREMENTS

In accordance with accounting principles generally accepted in the United States, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy prioritizes the inputs used to measure fair value as follows:

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 – Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data.

Level 3 – Unobservable inputs reflecting the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability based on the best information available.

2624

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be remeasured at fair value on a recurring basis:


		10/31/21						1/31/21						11/1/20										10/30/22											1/30/22											10/31/21
(In millions)	(In millions)	Level 1	Level 2		Level 3	Total		Level 1	Level 2		Level 3	Total		Level 1	Level 2		Level 3			Total		(In millions)		Level 1			Level 2			Level 3		Total			Level 1			Level 2			Level 3		Total			Level 1		Level 2			Level 3	Total
Assets:	Assets:																					Assets:
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts	N/A	$	29.8	N/A	$	29.8	N/A	$	3.8	N/A	$	3.8	N/A	$	10.9	N/A			$	10.9	Foreign currency forward exchange contracts		N/A			$	97.6		N/A		$	97.6		N/A			$	56.3		N/A		$	56.3		N/A		$	29.8		N/A	$	29.8
Interest rate swap agreements		N/A	—		N/A	—		N/A	—		N/A	—		N/A	—		N/A			—
Rabbi trust assets																		Rabbi trust assets	0.7				5.1			N/A			5.8		—			0.3			N/A			0.3		N/A			N/A		N/A			N/A

Total Assets	Total Assets	N/A	$	29.8	N/A	$	29.8	N/A	$	3.8	N/A	$	3.8	N/A	$	10.9	N/A			$	10.9	Total Assets		$	0.7		$	102.7		N/A		$	103.4		$	—		$	56.6		N/A		$	56.6		N/A		$	29.8		N/A	$	29.8

Liabilities:	Liabilities:																		Liabilities:
Foreign currency forward exchange contracts	Foreign currency forward exchange contracts	N/A	$	3.6	N/A	$	3.6	N/A	$	31.0	N/A	$	31.0	N/A	$	13.7	N/A			$	13.7	Foreign currency forward exchange contracts		N/A			$	6.0		N/A		$	6.0		N/A			$	1.7		N/A		$	1.7		N/A		$	3.6		N/A	$	3.6
Interest rate swap agreements	Interest rate swap agreements	N/A	0.9		N/A	0.9		N/A	4.7		N/A	4.7		N/A	7.6		N/A			7.6		Interest rate swap agreements		N/A			—			N/A		—			N/A			—			N/A		—			N/A		0.9			N/A	0.9

Total Liabilities	Total Liabilities	N/A	$	4.5	N/A	$	4.5	N/A	$	35.7	N/A	$	35.7	N/A	$	21.3	N/A			$	21.3	Total Liabilities		N/A			$	6.0		N/A		$	6.0		N/A			$	1.7		N/A		$	1.7		N/A		$	4.5		N/A	$	4.5

The fair value of the foreign currency forward exchange contracts is measured as the total amount of currency to be purchased, multiplied by the difference between (i) the forward rate as of the period end and (ii) the settlement rate specified in each contract. The fair value of the Level 1 rabbi trust assets, which consist of investments in mutual funds, is valued at the net asset value of the funds, as determined by the closing price in the active market in which the individual fund is traded. The fair value of the Level 2 rabbi trust assets, which consist of investments in common collective trust funds, is valued at the net asset value of the funds, as determined by the fund family. Funds are redeemable on a daily basis without restriction. The fair value of the interest rate swap agreements is based on observable interest rate yield curves and represents the expected discounted cash flows underlying the financial instruments.

The Company established a rabbi trust that, beginning January 1, 2022, holds investments related to the Company’s supplemental savings plan. The rabbi trust assets, which generally mirror the investment elections made by eligible plan participants, were $5.8 million and $0.3 million as of October 30, 2022 and January 30, 2022, respectively, and recorded in the Company’s Consolidated Balance Sheets as follows: $0.4 million and $5.4 million were included in other current assets and other assets, respectively, as of October 30, 2022, and $0.3 million was included in other assets as of January 30, 2022. The corresponding deferred compensation liability was included in accrued expenses and other liabilities in the Company’s Consolidated Balance Sheets as of October 30, 2022 and January 30, 2022. Unrealized losses recognized on the rabbi trust investments were immaterial during the thirty-nine weeks ended October 30, 2022.

There were no transfers between any levels of the fair value hierarchy for any of the Company’s fair value measurements.

The Company’s non-financial assets, which primarily consist of goodwill, other intangible assets, property, plant and equipment, and operating lease right-of-use assets, are not required to be measured at fair value on a recurring basis, and instead are reported at their carrying amount. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying amount may not be fully recoverable (and at least annually for goodwill and indefinite-lived intangible assets), non-financial assets are assessed for impairment. If the fair value is determined to be lower than the carrying amount, an impairment charge is recorded to write down the asset to its fair value.

The following ~~tables show~~table shows the fair values of the Company’s non-financial assets that were required to be remeasured at fair value on a non-recurring basis during the thirty-nine weeks ended October 30, 2022 and October 31, 2021, ~~and November 1, 2020,~~ and the total impairments recorded as a result of the remeasurement process:

(In millions)

Fair Value Measurement Using

Fair Value As Of Impairment Date

Total Impairments

(In millions)

Fair Value Measurement Using

Fair Value As Of Impairment Date

Total Impairments

10/30/22

Level 1

Level 2

Level 3

Operating lease right-of-use assets

N/A

—

26.4

Property, plant and equipment, net

N/A

—

17.2

Goodwill

N/A

41.0

417.1

10/31/21

Level 1

Level 2

Level 3

Fair Value As Of Impairment Date

Total Impairments

10/31/21

Operating lease right-of-use assets

N/A

—

Operating lease right-of-use assets

N/A

—

17.8

Property, plant and equipment, net

N/A

—

17.3

Property, plant and equipment, net

N/A

—

17.3

11/1/20

Property, plant and equipment, net

N/A

1.1

23.2

Goodwill

N/A

652.6

879.0

Tradenames

N/A

48.7

47.2

Other intangible assets, net

N/A

—

7.3

Investments in unconsolidated affiliates

N/A

—

12.3

Operating lease right-of-use assets with a carrying amount of $26.4 million and property, plant and equipment with a carrying amount of $17.2 million were written down to a fair value of zero during the thirty-nine weeks ended October 30, 2022 in connection with the Company’s decision in the second quarter of 2022 to exit from its Russia business.Please see Note 16, “Exit Activity Costs,” for further discussion of the Russia business exit costs. Fair value of the Company’s operating lease right-of-use assets and property, plant and equipment were determined to be zero in line with the Company’s estimated future cash flows for the Russia business asset group.

Goodwill with a carrying amount of $458.1 million was written down to a fair value of $41.0 million during the thirty-nine weeks ended October 30, 2022. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

The $460.7 million of impairment charges during the thirty-nine weeks ended October 30, 2022 were recorded in the Company’s Consolidated Statement of Operations, of which $417.1 was included in goodwill impairment and $43.6 million was included in SG&A expenses. The $460.7 million of impairment charges were recorded to the Company’s segments as follows: $177.2 million in the Tommy Hilfiger North America segment, $162.6 million in the Calvin Klein North America segment, $87.2 million in the Calvin Klein International segment and $33.7 million in the Tommy Hilfiger International segment.

Operating lease right-of-use assets with a carrying amount of $17.8 million and property, plant and equipment with a carrying amount of $17.3 million were written down to a fair value of zero during the thirty-nine weeks ended October 31, 2021 primarilyas a result of actions taken by the Company to reduce its real estate footprint, including reductions in office space. Please see Note 16, “Exit Activity Costs,” for further discussion of these restructuring activities. Fair value of the Company’s operating lease right-of-use assets was determined based on the discounted cash flows of estimated sublease income using

market participant assumptions, which considered the short length of the remaining lease term for certain of these assets, and current real estate trends and market conditions. Fair value of the Company’s property, plant and equipment was determined based on the estimated discounted future cash flows associated with the assets using market participant assumptions.

The $35.1 million of impairment charges during the thirty-nine weeks ended October 31, 2021 were included in SG&A expenses in the Company’s Consolidated Statement of Operations and recorded to the Company’s segments as follows: $1.4 million in the Heritage Brands Wholesale segment and $33.7 million in corporate expenses not allocated to any reportable segments.

Property, plant and equipment with a carrying amount of $17.1 million was written down to a fair value of $1.1 million during the thirty-nine weeks ended November 1, 2020, primarily due to the adverse impacts of the COVID-19 pandemic on the Company’s retail stores with lease terms expiring by the end of fiscal 2021 with no intention of renewal, including temporary store closures and reduced traffic, occupancy and consumer spending trends. Fair value of the Company’s property, plant and equipment was determined based on the estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions.

Property, plant and equipment with a carrying amount of $7.2 million was written down to a fair value of zero during the thirty-nine weeks ended November 1, 2020 in connection with the exit from the Heritage Brands Retail business that was substantially completed in the second quarter of 2021. Please see Note 16, “Exit Activity Costs,” for further discussion of the Heritage Brands Retail exit costs. Fair value of the Company’s Heritage Brands Retail business property, plant and equipment was determined based on the estimated discounted future cash flows associated with the assets using sales trends and market participant assumptions.

Goodwill with a carrying amount of $1,531.6 million was written down to a fair value of $652.6 million during the thirty-nine weeks ended November 1, 2020. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

Tradenames with a carrying amount of $95.9 million were written down to a fair value of $48.7 million during the thirty-nine weeks ended November 1, 2020. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

Other intangible assets with a carrying amount of $7.3 million were written down to a fair value of zero during the thirty-nine weeks ended November 1, 2020. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

The Company’s equity method investment in Karl Lagerfeld with a carrying amount of $12.3 million was written down to a fair value of zero during the thirty-nine weeks ended November 1, 2020. Please see Note 6, “Investments in Unconsolidated Affiliates,” for further discussion.

The $969.0 million of impairment charges during the thirty-nine weeks ended November 1, 2020 were recorded in the Company’s Consolidated Statement of Operations, of which $933.5 million was included in goodwill and other intangible asset impairments, $23.2 million was included in SG&A expenses, and $12.3 million was included in equity in net income (loss) of unconsolidated affiliates. The $969.0 million of impairment charges were recorded to the Company’s segments as follows: $395.8 million in the Calvin Klein International segment, $293.1 million in the Calvin Klein North America segment, $249.6 million in the Heritage Brands Wholesale segment, $11.0 million in the Heritage Brands Retail segment, $4.1 million in the Tommy Hilfiger North America segment, $3.1 million in the Tommy Hilfiger International segment and $12.3 million was recorded in corporate expenses not allocated to any reportable segments.

The carrying amounts and the fair values of the Company’s cash and cash equivalents, short-term borrowings and long-term debt were as follows:


		10/31/21				1/31/21				11/1/20					10/30/22				1/30/22				10/31/21
(In millions)	(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value		(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value

Cash and cash equivalents	Cash and cash equivalents	$	1,298.7	$	1,298.7	$	1,651.4	$	1,651.4	$	1,460.0	$	1,460.0	Cash and cash equivalents	$	457.0	$	457.0	$	1,242.5	$	1,242.5	$	1,298.7	$	1,298.7
Short-term borrowings	Short-term borrowings	27.8		27.8		—		—		21.1		21.1		Short-term borrowings	98.0		98.0		10.8		10.8		27.8		27.8

Long-term debt (including portion classified as current)	Long-term debt (including portion classified as current)	2,638.0		2,853.3		3,554.8		3,806.8		3,487.0		3,597.7		Long-term debt (including portion classified as current)	2,146.4		2,031.7		2,352.4		2,522.4		2,638.0		2,853.3

The fair values of cash and cash equivalents and short-term borrowings approximate their carrying amounts due to the short-term nature of these instruments. The Company estimates the fair value of its long-term debt using quoted market prices as of

the last business day of the applicable quarter. The Company classifies the measurement of its long-term debt as a Level 1 measurement. The carrying amounts of long-term debt reflect the unamortized portions of debt issuance costs and the original issue discounts.

13. STOCK-BASED COMPENSATION

The Company grants stock-based awards under its Stock Incentive Plan (the “Plan”). Shares issued as a result of stock-based compensation transactions generally have been funded with the issuance of new shares of the Company’s common stock.

The Company may grant the following types of incentive awards under the Plan: (i) non-qualified stock ~~options (“stock options”);~~options; (ii) incentive stock options; (iii) stock appreciation rights; (iv) restricted stock; (v) restricted stock units (“RSUs”); (vi) performance shares; (vii) performance share units (“PSUs”); and (viii) other stock-based awards. Each award granted under the Plan is subject to an award agreement that incorporates, as applicable, the exercise price, the term of the award, the periods of restriction, the number of shares to which the award pertains, performance periods and performance measures, and such other terms and conditions as the plan committee determines. Awards granted under the Plan are classified as equity awards, which are recorded in stockholders’ equity in the Company’s Consolidated Balance Sheets. When estimating the grant date fair value of stock-based awards, the Company considers whether an adjustment is required to the closing price or the expected volatility of its common stock on the date of grant when the Company is in possession of material non-public information. No such adjustments were made to the grant date fair value of awards granted during the thirty-nine weeks ended October 30, 2022.

Through October ~~31, 2021,~~30, 2022, the Company has granted under the Plan (i) service-based non-qualified stock options, referred to as “stock options” below, RSUs and restricted stock; and (ii) contingently issuable PSUs and RSUs. There were no shares of restricted stock or contingently issuable RSUs outstanding as of October ~~31, 2021.~~30, 2022.

According to the terms of the Plan, for purposes of determining the number of shares available for grant, each share underlying a stock option award reduces the number available by 1one share and each share underlying an RSU or PSU award reduces the number available by 2two shares.

Net income ~~(loss)~~ for the thirty-nine weeks ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ included ~~$35.8~~$35.3 million and ~~$36.6~~$35.8 million, respectively, of pre-tax expense related to stock-based compensation, with related recognized income tax benefits of ~~$5.0~~$4.5 million and ~~$4.2~~$5.0 million, respectively.

The Company receives a tax deduction for certain transactions associated with its stock-based awards. The actual income tax benefits realized from these transactions during the thirty-nine weeks ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ were ~~$7.1~~$3.6 million and ~~$2.3~~$7.1 million, respectively. The tax benefits realized included discrete net excess tax deficiencies of ~~$5.2~~$1.9 million recognized in the Company’s provision for income taxes during the thirty-nine weeks ended ~~November 1, 2020.~~October 30, 2022. Discrete net excess tax deficiencies recognized in the Company’s provision for income taxes were immaterial for the thirty-nine weeks ended October 31, 2021.

Stock Options

Stock options granted to employees are generally exercisable in four equal annual installments commencing one year after the date of grant. The underlying stock option award agreements generally provide for accelerated vesting upon the award recipient’s retirement (as defined in the Plan). Such stock options are granted with a 10-year term and the per share exercise price cannot be less than the closing price of the common stock on the date of grant.

The Company estimates the fair value of stock options at the date of grant using the Black-Scholes-Merton model. The estimated fair value of the stock options granted is expensed over the stock options’ ~~vesting~~requisite service periods.

The following summarizes the assumptions used to estimate the fair value of stock options granted during the thirty-nine weeks ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ and the resulting weighted average grant date fair value per stock option:

10/31/21 11/1/20
Weighted average risk-free interest rate 1.24 % 0.48 %
Weighted average expected stock option term (in years) 6.25 6.25
Weighted average Company volatility 47.58 % 45.08 %
Expected annual dividends per share $ 0.15 $ 0.15
Weighted average grant date fair value per stock option $ 48.28 $ 23.05


	10/30/22			10/31/21
Weighted average risk-free interest rate	2.50		%	1.24		%
Weighted average expected stock option term (in years)	6.25			6.25
Weighted average Company volatility	47.34		%	47.58		%
Expected annual dividends per share	$	0.15		$	0.15
Weighted average grant date fair value per stock option	$	34.27		$	48.28

The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. The expected stock option term represents the weighted average period of time that stock options

granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options. Company volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term. Expected dividends are based on the anticipated common stock cash dividend rate for the Company at the time of grant; the dividend assumption for the stock options granted during the thirty-nine weeks ended October 31, 2021 ~~and November 1, 2020, respectively,~~ was not affected by the Company’s suspension of its cash dividend beginning with the second quarter of 2020 in response to the impacts of the COVID-19 pandemic on its business and as a condition of the June 2020 Amendment that was in effect through June 10, 2021, as such suspension was viewed as temporary. Please see Note 15, “Stockholders' Equity,” for further discussion of dividends on the Company’s common stock.

The Company has continued to utilize the simplified method to estimate the expected term for its “plain vanilla” stock options granted due to a lack of relevant historical data resulting, in part, from changes in the pool of employees receiving stock option grants. The Company will continue to evaluate the appropriateness of utilizing such method.

Stock option activity for the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was as follows:

(In thousands, except per stock option data) Stock Options Weighted Average Exercise Price
Per Stock Option
Outstanding at January 31, 2021 1,028 $ 98.23
  Granted 96 104.30
  Exercised 228 92.36
  Cancelled 98 101.47
Outstanding at October 31, 2021 798 $ 100.24
Exercisable at October 31, 2021 500 $ 111.45


(In thousands, except per stock option data)	Stock Options	Weighted Average Exercise Price Per Stock Option
Outstanding at January 30, 2022	688	$	103.40
Granted	134	71.51
Exercised	—	—
Forfeited / Expired	98	103.42
Outstanding at October 30, 2022	724	$	97.48
Exercisable at October 30, 2022	481	$	108.43

RSUs

RSUs granted to employees generally vest in four equal annual installments commencing one year after the date of grant, although the Company does make from time to time, and currently has outstanding, RSUs with different vesting schedules. Service-based RSUs granted to non-employee directors vest in full the earlier of one year after the date of grant or the date of the Annual Meeting of Stockholders following the year of grant. The underlying RSU award agreements for employees generally provide for accelerated vesting upon the award recipient’s retirement (as defined in the Plan). The fair value of RSUs is equal to the closing price of the Company’s common stock on the date of grant and is expensed over the RSUs’ ~~vesting~~requisite service periods.

RSU activity for the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was as follows:

(In thousands, except per RSU data) RSUs Weighted Average Grant Date Fair Value Per RSU
Non-vested at January 31, 2021 1,470 $ 78.80
  Granted 556 109.00
  Vested 464 87.13
  Cancelled 219 80.45
Non-vested at October 31, 2021 1,343 $ 88.15


(In thousands, except per RSU data)	RSUs	Weighted Average Grant Date Fair Value Per RSU
Non-vested at January 30, 2022	1,176	$	88.09
Granted	696	71.08
Vested	405	92.16
Forfeited	126	85.93
Non-vested at October 30, 2022	1,341	$	78.24

PSUs

Contingently issuable PSUs granted to employees generally vest three years after the date of grant, subject to the satisfaction of performance conditions. The Company granted contingently issuable PSUs to certain of the Company’s senior executives during the second ~~quarter~~quarters of 2022 and 2021. ~~For these awards, the~~The final number of shares to be earned, if any, is contingent upon the Company’s achievement of goals for the applicable performance period, of which (i) 50% is based upon the cumulative amount of the Company’s consolidated earnings before interest and taxes (“EBIT”) ~~amount~~during a three-year performance period beginning with the fiscal year of grant for the awards granted in 2022 and EBIT for fiscal 2021 ~~fiscal year,~~for the awards granted in 2021, and (ii) 50% is based upon the Company’s total shareholder return (“TSR”) during a three-year performance period from the grant date relative to a pre-established group of industry ~~peers. The~~peers (which is substantially identical for grants in both years). For these awards, the Company records expense ratably over the three-year ~~vesting~~service period, with expense determined as follows: (i) EBIT-based portion of the awards – based on the grant date fair value per share and the Company’s current expectations of the probable number of shares that will ultimately be issued and (ii) TSR-based portion of the awards – based on the grant date fair value regardless of whether the market condition is satisfied because the awards are subject to market conditions. The grant date fair value of the awards granted was established as follows: (i) EBIT-based portion of the awards – based on the closing price of the Company’s common stock reduced for the present value of any dividends expected to be paid on the Company’s common stock during the three-year ~~vesting~~service period, as these contingently issuable PSUs do not accrue dividends and (ii) TSR-based portion of the awards – using the Monte Carlo simulation model. For the EBIT-based portion of the awards granted in the second quarter of 2021, the applicable performance period ended in the fourth quarter of 2021 and the maximum level of performance was achieved. These shares will vest and be paid out subject to and following the completion of the three-year service period.

The Company also granted contingently issuable PSUs to certain of the Company’s senior executives during ~~2018,~~ 2019 and 2020, subject to a three-year performance period from the applicable grant date. For these awards, the final number of shares to be earned, if any, is contingent upon the Company’s achievement of goals for the applicable performance period, of which (i) 50% is based upon the Company’s absolute stock price growth during the applicable performance period and (ii) 50% is based upon the Company’s TSR during the applicable performance period relative to other companies included in the S&P 500 as of the date of grant. For these awards, the Company records expense ratably over the three-year ~~vesting~~service period based on the grant date fair value of the awards regardless of whether the market condition is satisfied because the awards are subject to market conditions. The grant date fair value of the awards granted was established for each grant using the Monte Carlo simulation model. For awards granted in ~~2018,~~2019, the three-year performance period ended during either the first or second quarter of ~~2021~~2022 and holders of the awards did not earn any shares since the market conditions were not satisfied.

The following summarizes the assumptions used to estimate the fair value of PSUs subject to market conditions that were granted during the thirty-nine weeks ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ and the resulting weighted average grant date fair value:


		10/31/21			11/1/20				10/30/22			10/31/21
Weighted average risk-free interest rate	Weighted average risk-free interest rate	0.33		%	0.19		%	Weighted average risk-free interest rate	2.91		%	0.33		%
Weighted average Company volatility	Weighted average Company volatility	60.69		%	51.86		%	Weighted average Company volatility	64.02		%	60.69		%
Expected annual dividends per share	Expected annual dividends per share	$	0.15		$	0.15		Expected annual dividends per share	$	0.15		$	0.15
Weighted average grant date fair value per PSU	Weighted average grant date fair value per PSU	$	159.29		$	64.89		Weighted average grant date fair value per PSU	$	103.36		$	159.29

The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for the term corresponding to the three-year performance period. Company volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the three-year performance period. Expected dividends are based on the anticipated common stock cash dividend rate for the Company at the time of grant; the dividend assumption for the PSUs granted during the thirty-nine weeks ended October 31, 2021 ~~and November 1, 2020, respectively,~~ was not affected by the Company’s suspension of its cash dividend beginning with the second quarter of 2020 in response to the impacts of the COVID-19 pandemic on its business and as a condition of the June 2020 Amendment that was in effect through June 10, 2021, as such suspension was viewed as temporary. Please see Note 15, “Stockholders' Equity,” for further discussion of dividends on the Company’s common stock.

For certain of the awards granted, the after-tax portion of the award is subject to a holding period of one year after the vesting date. For these awards, the ~~weighted average~~ grant date fair value was discounted 6.90% in 2022 and 8.40% in 2021 ~~and 15.94% in 2020~~ for the restriction of liquidity, which was calculated using the Finnerty ~~model and Chaffe model, respectively. The Company uses the model that is deemed more appropriate after an evaluation of current market conditions.~~model.

Total PSU activity for the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was as follows:


(In thousands, except per PSU data)	(In thousands, except per PSU data)	PSUs	Weighted Average Grant Date Fair Value Per PSU		(In thousands, except per PSU data)	PSUs	Weighted Average Grant Date Fair Value Per PSU
Non-vested at January 31, 2021		237	$	96.48
Non-vested at January 30, 2022					Non-vested at January 30, 2022	248	$	93.15
Granted	Granted	43	134.31		Granted	72	87.16
Reduction due to market conditions not satisfied	Reduction due to market conditions not satisfied	41	158.97		Reduction due to market conditions not satisfied	67	118.28

Vested	Vested	—	—		Vested	—	—
Cancelled		10	108.61
Non-vested at October 31, 2021		229	$	91.84
Forfeited					Forfeited	2	77.54
Non-vested at October 30, 2022					Non-vested at October 30, 2022	251	$	84.98

14. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables present the changes in AOCL, net of related taxes, by component for the thirty-nine weeks ended October 30, 2022 and October 31, ~~2021 and November 1, 2020:~~2021:


(In millions)	Foreign currency translation adjustments			Net unrealized and realized gain on effective cash flow hedges		Total
Balance, January 30, 2022	$	(665.9)		$	53.2	$	(612.7)
Other comprehensive (loss) income before reclassifications	(261.7)		(1)(2)	51.5		(210.2)
Less: Amounts reclassified from AOCL	(3.4)		(3)	9.8		6.4
Other comprehensive (loss) income	(258.3)			41.7		(216.6)
Balance, October 30, 2022	$	(924.2)		$	94.9	$	(829.3)


(In millions)	Foreign currency translation adjustments			Net unrealized and realized (loss) gain on effective cash flow hedges		Total
Balance, January 31, 2021	$	(481.6)		$	(37.5)	$	(519.1)
Other comprehensive (loss) income before reclassifications	(79.7)		(1)(2)	74.6		(5.1)
Less: Amounts reclassified from AOCL	—			0.2		0.2
Other comprehensive (loss) income	(79.7)			74.4		(5.3)
Balance, October 31, 2021	$	(561.3)		$	36.9	$	(524.4)

(In millions) Foreign currency translation adjustments Net unrealized and realized gain (loss) on effective cash flow hedges Total
Balance, February 2, 2020 $ (665.7) $ 25.6 $ (640.1)
Other comprehensive income (loss) before reclassifications 58.6 (1)(3) (31.2) 27.4
Less: Amounts reclassified from AOCL — 1.6 1.6
Other comprehensive income (loss) 58.6 (32.8) 25.8
Balance, November 1, 2020 $ (607.1) $ (7.2) $ (614.3)

(1) Foreign currency translation adjustments included a net gain ~~(loss)~~ on net investment hedges of ~~$41.3~~$99.6 million and ~~$(57.6)~~$41.3 million during the thirty-nine weeks ended October 30, 2022 and October 31, 2021, ~~and November 1, 2020,~~ respectively.

(2) Unfavorable foreign currency translation adjustments were principally driven by a strengthening of the United States dollar against the euro.

(3) ~~Favorable foreign~~Foreign currency translation ~~adjustments~~adjustment losses were ~~principally driven by a weakening~~reclassified from AOCL during the second quarter of 2022 in connection with the ~~United States dollar against the euro.~~Karl Lagerfeld transaction. Please see Note 6, “Investments in Unconsolidated Affiliates,” for further discussion.

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The following table presents reclassifications from AOCL to earnings for the thirteen and thirty-nine weeks ended October 30, 2022 and October 31, ~~2021 and November 1, 2020:~~

Amount Reclassified from AOCL Affected Line Item in the Company’s Consolidated Statements of Operations
Thirteen Weeks Ended Thirty-Nine Weeks Ended
(In millions) 10/31/21 11/1/20 10/31/21 11/1/20
Realized (loss) gain on effective cash flow hedges:
Foreign currency forward exchange contracts (inventory purchases) $ (6.6) $ 5.3 $ 1.2 $ 8.4 Cost of goods sold
Interest rate swap agreements (1.3) — (1.3) —
SG&A (1)
Interest rate swap agreements (0.7) (3.3) (2.6) (7.9) Interest expense
Less: Tax effect (1.9) (0.2) (2.9) (1.1) Income tax expense (benefit)
Total, net of tax $ (6.7) $ 2.2 $ 0.2 $ 1.6
2021:


	Amount Reclassified from AOCL									Affected Line Item in the Company’s Consolidated Statements of Operations
	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(In millions)	10/30/22		10/31/21		10/30/22			10/31/21
Realized gain (loss) on effective cash flow hedges:
Foreign currency forward exchange contracts (inventory purchases)	$	9.9	$	(6.6)	$	13.6		$	1.2	Cost of goods sold
Interest rate swap agreements	—		(1.3)		—			(1.3)		SG&A (1)
Interest rate swap agreements	—		(0.7)		—			(2.6)		Interest expense
Less: Tax effect	2.7		(1.9)		3.8			(2.9)		Income tax (benefit) expense
Total, net of tax	$	7.2	$	(6.7)	$	9.8		$	0.2

Foreign currency translation adjustments:
Karl Lagerfeld transaction	$	—	$	—	$	(3.4)	(2)	$	—	Equity in net income of unconsolidated affiliates
Less: Tax effect	—		—		—			—		Income tax (benefit) expense
Total, net of tax	$	—	$	—	$	(3.4)		$	—

(1) The Company dedesignated certain cash flow hedges related to its interest rate swap agreements during the thirteen weeks ended October 31, 2021. Please see Note 11, “Derivative Financial Instruments,” for further discussion.

(2) Foreign currency translation adjustment losses were reclassified from AOCL during the second quarter of 2022 in connection with the Karl Lagerfeld transaction. Please see Note 6, “Investments in Unconsolidated Affiliates,” for further discussion.

15. STOCKHOLDERS’ EQUITY

Acquisition of Treasury Shares

The Company’s Board of Directors has authorized over time since 2015 an aggregate ~~$2.0~~$3.0 billion stock repurchase program through June 3, ~~2023.~~2026. Repurchases under the program may be made from time to time over the period through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as the Company deems appropriate. Purchases are made based on a variety of factors, such as price, corporate requirements and overall market conditions, applicable legal requirements and limitations, trading restrictions under the Company’s insider trading policy and other relevant factors. The program may be modified by the Board of Directors, including to increase or decrease the repurchase limitation or extend, suspend or terminate the program at any time, without prior notice.

The Company suspended share repurchases under the stock repurchase program beginning in March 2020 ~~following the purchase of 1.4 million shares in open market transactions for $110.7 million completed earlier in the first quarter of 2020,~~ in response to the impacts of the COVID-19 pandemic on its business. In addition, under the terms of a waiver the Company obtained in June 2020 ~~Amendment,~~of certain covenants under its senior unsecured credit facilities (referred to as the “June 2020 Amendment”), the Company was not permitted to make share repurchases during the relief period. However, effective June 10, 2021, the relief period under the June 2020 Amendment was terminated and the Company ~~now is~~was permitted to resume share repurchases at management’s ~~discretion.~~discretion, which it did starting in the third quarter of 2021. Please see Note 9,8, “Debt,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 30, 2022 for further ~~discussion.~~discussion of the terms of the June 2020 Amendment and the relief period.

During the ~~thirteen~~thirty-nine weeks ended October 31, 2021, following termination of the relief period in June 2021, the Company purchased 1.4 million shares of its common stock under the program in open market transactions for $148.7 million. During the thirty-nine weeks ended October 30, 2022, the Company purchased 5.1 million shares of its common stock under the program in open market transactions for $326.3 million. As of October ~~31, 2021,~~30, 2022, the repurchased shares were held as treasury stock and ~~$423.9~~$896.6 million of the authorization remained available for future share repurchases.

Treasury stock activity also includes shares that were withheld in conjunction with the settlement of RSUs to satisfy tax withholding requirements.

Common Stock Dividends

The Company declared a $0.0375 per share dividend payable to its common stockholders of record on March 4, 2020, in respect of which the Company made dividend payments totaling $2.7 million on March 31, 2020. The Company suspended its dividends ~~following the payment of the $0.0375 per common share dividend on~~in March ~~31,~~ 2020 in response to the impacts of the COVID-19 pandemic on its business. In addition, under the terms of the June 2020 Amendment, the Company was not permitted to declare or pay dividends during the relief period. However, effective June 10, 2021, the relief period was terminated and the Company ~~now is~~was permitted to declare and pay dividends on its common stock at the discretion of the Board of Directors. Please see Note 9,8, “Debt,” in the Notes to Consolidated Financial Statements included in Item 8 of the Company’s Annual Report on Form 10-K for the year ended January 30, 2022 for further ~~discussion.~~

discussion of the terms of the June 2020 Amendment and the relief period.

~~The~~Following termination of the relief period in June 2021, the Company declared on October 29, 2021 a $0.0375 per share dividend on its common ~~stock. The~~stock, in respect of which the Company subsequently made dividend ~~is payable~~payments totaling $2.7 million on December 17, 2021 to its common stockholders of record on November 24, 2021. The Company declared and paid $7.7 million of dividends on its common stock during the thirty-nine weeks ended October 30, 2022, including a $0.0375 per share dividend paid on each of March 30, 2022, June 29, 2022 and September 28, 2022 to its common stockholders of record on March 11, 2022, June 8, 2022 and September 7, 2022, respectively.

16. EXIT ACTIVITY COSTS

2022 Cost Savings Initiative

The Company announced in August 2022 it would be taking steps to streamline its organization and simplify its ways of working. The Company plans to reduce people costs in its global offices by approximately 10% by the end of 2023 to drive efficiencies and enable continued strategic investments to fuel growth, including in digital, supply chain and consumer engagement. The Company expects these reductions will generate annual cost savings of over $100 million, net of continued strategic people investments. In connection with this initiative, the Company recorded pre-tax costs during the thirteen and thirty-nine weeks ended October 30, 2022 related to initial actions taken under the plan, as shown in the following table. The Company expects to incur additional costs in connection with this initiative, however the additional costs are not known at this time.


(In millions)	Costs Incurred During the Thirteen and Thirty-Nine Weeks Ended 10/30/22
Severance, termination benefits and other employee costs	$	16.7

Of the charges incurred during the thirteen and thirty-nine weeks ended October 30, 2022, $4.2 million relate to SG&A expenses of the Tommy Hilfiger North America segment, $2.1 million relate to SG&A expenses of the Tommy Hilfiger International segment, $4.0 million relate to SG&A expenses of the Calvin Klein North America segment, $2.7 million relate to SG&A expenses of the Calvin Klein International segment, $2.2 million relate to SG&A expenses of the Heritage Brands Wholesale segment and $1.5 million relate to corporate SG&A expenses not allocated to any reportable segment. Please see Note 19, “Segment Data,” for further discussion of the Company’s reportable segments.

The liabilities at October 30, 2022 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:


(In millions)	Liability at 1/30/22		Costs Incurred During theThirty-Nine Weeks Ended 10/30/22		Costs Paid During theThirty-Nine Weeks Ended 10/30/22		Liability at 10/30/22
Severance, termination benefits and other employee costs	$	—	$	16.7	$	1.9	$	14.8

Russia Business Exit Costs

As a result of the war in Ukraine, the Company made the decision in the second quarter of 2022 to exit from its Russia business, including the closure of its retail stores in Russia and the cessation of its wholesale operations in Russia and Belarus. In connection with this exit, the Company recorded pre-tax costs during the thirty-nine weeks ended October 30, 2022 as shown in the following table. All expected costs related to the exit from the Russia business were incurred during the thirty-nine weeks ended October 30, 2022.


(In millions)	Costs Incurred During the Thirty-Nine Weeks Ended 10/30/22
Severance, termination benefits and other employee costs	$	2.1
Long-lived asset impairments	43.6
Contract termination and other costs	4.8
Total	$	50.5

Of the charges incurred during the thirty-nine weeks ended October 30, 2022, $36.7 million relate to SG&A expenses of the Tommy Hilfiger International segment and $13.8 million relate to SG&A expenses of the Calvin Klein International segment. Please see Note 19, “Segment Data,” for further discussion of the Company’s reportable segments.

Please see Note 12, “Fair Value Measurements,” for further discussion of the long-lived asset impairments recorded during the thirty-nine weeks ended October 30, 2022.

The liabilities at October 30, 2022 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:


(In millions)	Liability at 1/30/22		Costs Incurred During theThirty-Nine Weeks Ended 10/30/22		Costs Paid During theThirty-Nine Weeks Ended 10/30/22		Liability at 10/30/22
Severance, termination benefits and other employee costs	$	—	$	2.1	$	1.0	$	1.1
Contract termination and other costs	—		4.8		0.4		4.4
Total	$	—	$	6.9	$	1.4	$	5.5

2021 Reductions in Workforce and Real Estate Footprint

The Company announced in March 2021 plans to streamline its organization through reductions in its workforce, primarily in certain international markets, and to reduce its real estate footprint, including reductions in office space and select store closures, which ~~are expected to result~~resulted in annual cost savings of approximately $60 million. In connection with these activities, the Company recorded pre-tax costs during ~~the thirteen and thirty-nine weeks ended October 31,~~ 2021 as shown in the following table. All expected costs related to the 2021 reductions in workforce and real estate footprint were incurred during the thirty-nine weeks ended October 31, 2021.


(In millions)	Costs Incurred During the Thirteen Weeks Ended 10/31/21		Costs Incurred During the Thirty-Nine Weeks Ended 10/31/21
Severance, termination benefits and other employee costs	$	2.5	$	15.7
Long-lived asset impairments	—		28.1

Contract termination and other costs	—		3.8

Total	$	2.5	$	47.6

Of the charges incurred during the thirty-nine weeks ended October 31, 2021, $1.7 million relate to SG&A expenses of the Tommy Hilfiger North America segment, $8.9 million relate to SG&A expenses of the Tommy Hilfiger International segment, ~~$2.1~~

$2.1 million relate to SG&A expenses of the Calvin Klein North America segment, $6.4 million relate to SG&A expenses of the Calvin Klein International segment and $28.5 million relate to corporate SG&A expenses not allocated to any reportable segment. Please see Note 19, “Segment Data,” for further discussion of the Company’s reportable segments.

Please see Note 12, “Fair Value Measurements,” for further discussion of the long-lived asset impairments recorded during the thirty-nine weeks ended October 31, 2021.

The liabilities at October ~~31, 2021~~30, 2022 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:


(In millions)	(In millions)	Liability at 1/31/21		Costs Incurred During the Thirty-Nine Weeks Ended 10/31/21		Costs Paid During the Thirty-Nine Weeks Ended 10/31/21		Liability at 10/31/21		(In millions)	Liability at 1/30/22		Costs Incurred During theThirty-Nine Weeks Ended 10/30/22		Costs Paid During theThirty-Nine Weeks Ended 10/30/22		Liability at 10/30/22
Severance, termination benefits and other employee costs	Severance, termination benefits and other employee costs	$	—	$	15.7	$	7.0	$	8.7	Severance, termination benefits and other employee costs	$	6.2	$	—	$	2.6	$	3.6
Contract termination and other costs		—		3.8		3.6		0.2
Total		$	—	$	19.5	$	10.6	$	8.9

Heritage Brands Retail Exit Costs

The Company announced onin July ~~14,~~ 2020 plans to streamline its North American operations to better align its business with the evolving retail landscape, including the exit from its Heritage Brands Retail business, which consisted of 162 directly operated stores in North America and was substantially completed in the second quarter of 2021. In connection with the exit from the Heritage Brands Retail business, the Company recorded pre-tax costs during ~~2020 and~~ the thirty-nine weeks ended October 31, 2021 and recorded total cumulative costs during 2020 and 2021 as shown in the ~~following table.~~table below. All expected costs related to the exit from the Heritage Brands Retail business were incurred by the end of ~~the second quarter of~~ 2021.


(In millions)	Costs Incurred During the Thirty-Nine Weeks Ended 10/31/21		Cumulative Costs Incurred
Severance, termination benefits and other employee costs	$	10.8	$	25.4
Long-lived asset impairments	—		7.2
Accelerated amortization of lease assets	5.9		13.1
Contract termination and other costs	4.4		4.4

Total	$	21.1	$	50.1

The costs incurred during 2020 and ~~the thirty-nine weeks ended October 31,~~ 2021 relate to SG&A expenses of the Heritage Brands Retail segment. Please see Note 19, “Segment Data,” for further discussion of the Company’s reportable segments.

The liabilities at October ~~31, 2021~~30, 2022 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:

(In millions) Liability at 1/31/21 Costs Incurred During the Thirty-Nine Weeks Ended 10/31/21 Costs Paid During the Thirty-Nine Weeks Ended 10/31/21 Liability at 10/31/21
Severance, termination benefits and other employee costs $ 12.6 $ 10.8 $ 15.2 $ 8.2
Contract termination and other costs — 4.4 1.5 2.9
Total $ 12.6 $ 15.2 $ 16.7 $ 11.1


(In millions)	Liability at 1/30/22		Costs Incurred During theThirty-Nine Weeks Ended 10/30/22		Costs Paid During theThirty-Nine Weeks Ended 10/30/22		Liability at 10/30/22
Severance, termination benefits and other employee costs	$	3.5	$	—	$	3.5	$	—
Contract termination and other costs	2.4		—		2.4		—
Total	$	5.9	$	—	$	5.9	$	—

~~North America Office Workforce Reduction~~

The Company also announced on July 14, 2020 a reduction in its North America office workforce by approximately 450 positions, or 12%, across all three brand businesses and corporate functions (the “North America workforce reduction”). In connection with the North America workforce reduction, the Company recorded pre-tax costs of $39.7 million during 2020, which consisted of severance, termination benefits and other employee costs. All expected costs related to the North America workforce reduction were incurred during 2020.

~~The liabilities at October 31, 2021 related to these costs were principally recorded in accrued expenses in the Company’s Consolidated Balance Sheet and were as follows:~~

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17. NET (LOSS) INCOME ~~(LOSS)~~ PER COMMON SHARE

The Company computed its basic and diluted net (loss) income ~~(loss)~~ per common share as follows:
Thirteen Weeks Ended Thirty-Nine Weeks Ended
(In millions, except per share data) 10/31/21 11/1/20 10/31/21 11/1/20
Net income (loss) attributable to PVH Corp. $ 279.7 $ 69.8 $ 561.5 $ (1,078.4)
Weighted average common shares outstanding for basic net income (loss) per common share 70.9 71.1 71.2 71.2
Weighted average impact of dilutive securities 1.1 0.4 1.1 —
Total shares for diluted net income (loss) per common share 72.0 71.5 72.3 71.2
Basic net income (loss) per common share attributable to PVH Corp. $ 3.94 $ 0.98 $ 7.89 $ (15.15)
Diluted net income (loss) per common share attributable to PVH Corp. $ 3.89 $ 0.98 $ 7.77 $ (15.15)


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(In millions, except per share data)	10/30/22		10/31/21		10/30/22		10/31/21

Net (loss) income attributable to PVH Corp.	$	(186.7)	$	279.7	$	61.7	$	561.5

Weighted average common shares outstanding for basic net (loss) income per common share	64.8		70.9		66.5		71.2
Weighted average impact of dilutive securities	—		1.1		0.5		1.1

Total shares for diluted net (loss) income per common share	64.8		72.0		67.0		72.3

Basic net (loss) income per common share attributable to PVH Corp.	$	(2.88)	$	3.94	$	0.93	$	7.89

Diluted net (loss) income per common share attributable to PVH Corp.	$	(2.88)	$	3.89	$	0.92	$	7.77

Potentially dilutive securities excluded from the calculation of diluted net (loss) income ~~(loss)~~ per common share as the effect would be anti-dilutive were as follows:

Thirteen Weeks Ended

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

Thirty-Nine Weeks Ended

(In millions)

10/31/21

11/1/20

10/31/21

11/1/20

(In millions)

10/30/22

10/31/21

10/30/22

10/31/21

Weighted average potentially dilutive securities

0.6

1.7

0.7

2.3

Weighted average potentially dilutive securities

2.2

0.6

1.5

0.7

Diluted net loss per common share attributable to PVH Corp. for the ~~thirty-nine~~thirteen weeks ended ~~November 1, 2020~~October 30, 2022 excluded all potentially dilutive securities because there was a net loss attributable to PVH Corp. for the period and, as such, the inclusion of these securities would have been anti-dilutive.

Shares underlying contingently issuable awards that have not met the necessary conditions as of the end of a reporting period are not included in the calculation of diluted net (loss) income ~~(loss)~~ per common share for that period. The Company had contingently issuable PSU awards outstanding that did not meet the performance conditions as of October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ and, therefore, were excluded from the calculation of diluted net (loss) income ~~(loss)~~ per common share for each applicable period. The maximum number of potentially dilutive shares that could be issued upon vesting for such awards was ~~0.1~~0.4 million and ~~0.4~~0.1 million as of October 30, 2022 and October 31, 2021, ~~and November 1, 2020,~~ respectively. These amounts were also excluded from the computation of weighted average potentially dilutive securities in the table above.

18. SUPPLEMENTAL CASH FLOW INFORMATION

Noncash Investing and Financing Transactions

Omitted from the Company’s Consolidated Statements of Cash Flows for the thirty-nine weeks ended October 30, 2022 and October 31, 2021 ~~and November 1, 2020~~ were capital expenditures related to property, plant and equipment of ~~$40.4~~$30.6 million and ~~$18.4~~$40.4 million, respectively, that were accrued and not yet paid as of the end of the respective periods.

Omitted from acquisition of treasury shares in the Company’s Consolidated ~~Statement~~Statements of Cash Flows for the thirty-nine weeks ended October 30, 2022 and October 31, 2021 were $2.2 million and $4.4 million respectively, of shares repurchased under the stock repurchase program for which the trades occurred but remained unsettled as of the end of the ~~period.~~respective periods.

3637

The Company completed the Australia acquisition in the second quarter of 2019. Total acquisition consideration included the issuance to key executives of Gazal and PVH Australia of approximately 6% of the outstanding shares in the subsidiary of the Company that acquired 100% of the ownership interests in the Australia business, for which the Company recognized a $26.2 million liability on the date of the acquisition. In subsequent periods, the liability was adjusted each reporting period to its redemption value based on conditions that existed as of each subsequent balance sheet date. The Company settled in June 2020 a portion of the liability for the 6% interest issued to key executives of Gazal and PVH Australia, and settled in June 2021 the remaining liability, under the conditions specified in the terms of the acquisition agreement. Please see Note 4, “Acquisitions and Divestitures,” for further discussion of this liability.

Lease Transactions

Supplemental cash flow information related to leases was as follows:


		Thirty-Nine Weeks Ended					Thirty-Nine Weeks Ended
(In millions)	(In millions)	10/31/21		11/1/20		(In millions)	10/30/22		10/31/21
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	$	369.0	$	292.3	Operating cash flows from operating leases	$	341.4	$	369.0
Operating cash flows from finance leases	Operating cash flows from finance leases	0.2		0.3		Operating cash flows from finance leases	0.1		0.2
Financing cash flows from finance leases	Financing cash flows from finance leases	3.9		4.0		Financing cash flows from finance leases	3.0		3.9
Noncash transactions:	Noncash transactions:					Noncash transactions:
Right-of-use assets obtained in exchange for new operating lease liabilities	Right-of-use assets obtained in exchange for new operating lease liabilities	210.5		201.3		Right-of-use assets obtained in exchange for new operating lease liabilities	208.2		210.5
Right-of-use assets obtained in exchange for new finance lease liabilities	Right-of-use assets obtained in exchange for new finance lease liabilities	2.1		3.8		Right-of-use assets obtained in exchange for new finance lease liabilities	6.2		2.1

The Company has sought concessions from landlords for certain of its stores affected by temporary closures as a result of the COVID-19 pandemic in the form of rent deferrals or rent abatements. Consistent with updated guidance issued by the Financial Accounting Standards Board (“FASB”) in April 2020, the Company elected to treat COVID-19 related rent concessions as though enforceable rights and obligations for those concessions existed in the original contract. As such, rent abatements negotiated with landlords are recorded as a reduction to variable lease expense included in SG&A expenses in the Company’s Consolidated Statements of Operations. The Company recorded $1.6 million and $4.0 million of rent abatements during the thirteen and thirty-nine weeks ended October 30, 2022, respectively. The Company recorded $4.2 million and $24.8 million of rent abatements during the thirteen and thirty-nine weeks ended October 31, 2021, ~~respectively. The Company recorded $9.3 million and $40.9 million of rent abatements during the thirteen and thirty-nine weeks ended November 1, 2020,~~ respectively. Rent deferrals have no impact to lease expense and amounts deferred and payable in future periods are included in the current portion of operating lease liabilities in the Company’s Consolidated Balance Sheets.

19. SEGMENT DATA

The Company manages its operations through its operating divisions, which are presented as its reportable segments: (i) Tommy Hilfiger North America; (ii) Tommy Hilfiger International; (iii) Calvin Klein North America; (iv) Calvin Klein International; (v) Heritage Brands Wholesale; and, (vi) Heritage Brands Retail until the end of the second quarter of 2021. The Company announced in July 2020 a plan to exit its Heritage Brands Retail business and, following the substantial completion of the exit from the business inthrough the second quarter of 2021, ~~the~~Heritage Brands Retail. The Company’s Heritage Brands Retail segment has ceased operations.

Tommy Hilfiger North America Segment - This segment consists of the Company’s Tommy Hilfiger North America division. This segment derives revenue principally from (i) marketing TOMMY HILFIGER branded apparel and related products at wholesale in the United States and Canada, primarily to department stores ~~warehouse clubs,~~ and off-price and independent retailers, as well as digital commerce sites operated by department store customers and pure play digital commerce retailers; (ii) operating retail stores, which are primarily located in premium outlet centers in the United States and Canada, and a digital commerce site in the United States, which sells TOMMY HILFIGER branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the TOMMY HILFIGER brand names for a broad range of product categories in North America. This segment also includes the Company’s proportionate share of the net income or loss of its ~~investment~~investments in its unconsolidated affiliate in Mexico ~~relating to the affiliate’s Tommy Hilfiger business~~ and ~~the Company’s proportionate share of the net income or loss of its investment in~~ its unconsolidated PVH Legwear LLC (“PVH Legwear”) affiliate relating to ~~the~~each affiliate’s Tommy Hilfiger business.

Tommy Hilfiger International Segment - This segment consists of the Company’s Tommy Hilfiger International division. This segment derives revenue principally from (i) marketing TOMMY HILFIGER branded apparel and related products at wholesale principally in Europe, Asia and Australia, primarily to 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; (ii) operating retail stores, concession locations and digital commerce sites in Europe, Asia and Australia, which sell TOMMY

HILFIGER branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the TOMMY HILFIGER brand names for a broad range of product categories outside of North America. This segment also includes the Company’s proportionate share of the net income or loss of its ~~investment~~investments in its unconsolidated ~~Tommy Hilfiger~~ affiliate in Brazil and ~~the Company’s proportionate share of the net income or loss of its investment in~~ its unconsolidated affiliate in India relating to ~~the~~each affiliate’s Tommy Hilfiger business.

Calvin Klein North America Segment - This segment consists of the Company’s Calvin Klein North America division. This segment derives revenue principally from (i) marketing Calvin Klein branded apparel and related products at wholesale in the United States and Canada, primarily to 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; (ii) operating retail stores, which are primarily located in premium outlet centers in the United States and Canada, and a digital commerce site in the United States, which sells Calvin Klein branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the Calvin Klein brand names for a broad range of product categories in North America. This segment also includes the Company’s proportionate share of the net income or loss of its ~~investment~~investments in its unconsolidated affiliate in Mexico ~~relating to the affiliate’s Calvin Klein business~~ and ~~the Company’s proportionate share of the net income or loss of its investment in~~ its unconsolidated PVH Legwear affiliate relating to ~~the~~each affiliate’s Calvin Klein business.

Calvin Klein International Segment - This segment consists of the Company’s Calvin Klein International division. This segment derives revenue principally from (i) marketing Calvin Klein branded apparel and related products at wholesale principally in Europe, Asia, Brazil and Australia, primarily to 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; (ii) operating retail stores, concession locations and digital commerce sites in Europe, Asia, Brazil and Australia, which sell Calvin Klein branded apparel, accessories and related products; and (iii) licensing and similar arrangements relating to the use by third parties of the Calvin Klein brand names for a broad range of product categories outside of North America. This segment also includes the Company’s proportionate share of the net income or loss of its investment in its unconsolidated affiliate in India relating to the affiliate’s Calvin Klein business.

Heritage Brands Wholesale Segment - This segment consists of the Company’s Heritage Brands Wholesale division. This segment derives revenue primarily from the marketing to department, chain and specialty stores, warehouse clubs, mass market, and off-price retailers (in stores and online), as well as pure play digital commerce retailers in North America of (i) women’s intimate apparel under the Warner’s, Olga and True&Co. brands; (ii) men’s dress shirts and neckwear under various ~~owned and~~ licensed brand names; ~~(ii)~~and (iii) men’s sportswear, bottoms and outerwear principally under the Van Heusen, IZOD and ARROW trademarks until August 2, 2021, ~~(the first day of the third quarter of 2021),~~ when the Company completed the Heritage Brands ~~transaction; (iii) women’s intimate apparel under the~~ ~~Warner’s~~, ~~Olga~~ ~~and~~ ~~True&Co.~~ ~~brands; and (iv) swimwear and swim-related products and accessories under the~~ ~~Speedo~~ trademark until April 6, 2020, when the Company completed the sale of its Speedo North America business to Pentland. Please see Note 4, “Acquisitions and Divestitures,” for further discussion of the Speedo and Heritage Brands transactions.transaction. This segment also derived revenue from Company operated digital commerce sites in the United States for Van Heusen and IZOD, which ceased operations during the third quarter of 2021 in connection with the Heritage Brands transaction. In addition, this segment derives revenue from the Heritage Brands business in Australia. This segment also includes the Company’s proportionate share of the net income or loss of its ~~investment~~investments in its unconsolidated affiliate in Mexico ~~relating to the affiliate’s business under certain of the heritage brands trademarks,~~ and ~~the Company’s proportionate share of the net income or loss of its investment in~~ its unconsolidated PVH Legwear affiliate relating to ~~the~~each affiliate’s business under ~~certain of the heritage brands trademarks.~~various owned and licensed brand names.

Heritage Brands Retail Segment - This segment consisted of the Company’s Heritage Brands Retail division. This segment derived revenue principally from operating retail stores, primarily located in outlet centers throughout the United States and Canada through which ~~primarily sold~~the Company marketed a selection of Van Heusen, IZOD and Warner’s apparel, accessories and related products. directly to consumers. The Company announced in July 2020 a plan to exit its Heritage Brands Retail business, which was substantially completed in the second quarter of 2021. ~~The~~As a result, the Company’s Heritage Brands Retail segment has ceased ~~operations following the substantial completion of the Company’s exit from the Heritage Brands Retail business in the second quarter of 2021.~~operations. Please see Note 16, “Exit Activity Costs,” for further discussion.

3839

The Company’s revenue by segment was as follows:


		Thirteen Weeks Ended						Thirty-Nine Weeks Ended							Thirteen Weeks Ended						Thirty-Nine Weeks Ended
(In millions)	(In millions)	10/31/21		(1)(2)	11/1/20		(1)(2)	10/31/21		(1)(2)	11/1/20		(1)(2)	(In millions)	10/30/22		(1)	10/31/21		(1)	10/30/22		(1)	10/31/21		(1)
Revenue – Tommy Hilfiger North America	Revenue – Tommy Hilfiger North America													Revenue – Tommy Hilfiger North America
Net sales	Net sales	$	269.2		$	249.7		$	747.8		$	604.9		Net sales	$	307.2		$	269.2		$	830.9		$	747.8
Royalty revenue	Royalty revenue	25.2			13.6			58.2			37.5			Royalty revenue	24.3			25.2			62.2			58.2
Advertising and other revenue	Advertising and other revenue	6.8			4.3			14.9			8.5			Advertising and other revenue	6.7			6.8			16.1			14.9
Total	Total	301.2			267.6			820.9			650.9			Total	338.2			301.2			909.2			820.9

Revenue – Tommy Hilfiger International	Revenue – Tommy Hilfiger International													Revenue – Tommy Hilfiger International
Net sales	Net sales	895.8			806.9			2,532.1			1,851.0			Net sales	805.9			895.8			2,345.7			2,532.1
Royalty revenue	Royalty revenue	16.5			10.5			42.5			27.5			Royalty revenue	16.9			16.5			46.3			42.5
Advertising and other revenue	Advertising and other revenue	4.2			4.8			11.4			10.6			Advertising and other revenue	5.9			4.2			15.1			11.4
Total	Total	916.5			822.2			2,586.0			1,889.1			Total	828.7			916.5			2,407.1			2,586.0

Revenue – Calvin Klein North America	Revenue – Calvin Klein North America													Revenue – Calvin Klein North America
Net sales	Net sales	292.1			231.9			809.1			576.5			Net sales	314.7			292.1			872.6			809.1
Royalty revenue	Royalty revenue	42.7			34.0			103.0			72.8			Royalty revenue	49.8			42.7			126.2			103.0
Advertising and other revenue	Advertising and other revenue	14.6			9.5			34.6			21.9			Advertising and other revenue	15.8			14.6			41.3			34.6
Total	Total	349.4			275.4			946.7			671.2			Total	380.3			349.4			1,040.1			946.7

Revenue – Calvin Klein International	Revenue – Calvin Klein International													Revenue – Calvin Klein International
Net sales	Net sales	597.9			492.8			1,683.5			1,136.7			Net sales	570.0			597.9			1,677.8			1,683.5
Royalty revenue	Royalty revenue	12.5			17.0			34.0			37.6			Royalty revenue	14.1			12.5			38.3			34.0
Advertising and other revenue	Advertising and other revenue	1.3			4.8			4.5			11.6			Advertising and other revenue	2.1			1.3			6.5			4.5
Total	Total	611.7			514.6			1,722.0			1,185.9			Total	586.2			611.7			1,722.6			1,722.0

Revenue – Heritage Brands Wholesale	Revenue – Heritage Brands Wholesale													Revenue – Heritage Brands Wholesale
Net sales	Net sales	153.0			192.0			561.9			537.8			Net sales	146.9			153.0			455.4			561.9
Royalty revenue	Royalty revenue	0.5			4.0			10.3			8.8			Royalty revenue	0.3			0.5			0.7			10.3
Advertising and other revenue	Advertising and other revenue	0.2			0.6			1.6			1.6			Advertising and other revenue	0.2			0.2			0.4			1.6
Total	Total	153.7			196.6			573.8			548.2			Total	147.4			153.7			456.5			573.8

Revenue – Heritage Brands Retail	Revenue – Heritage Brands Retail													Revenue – Heritage Brands Retail
Net sales	Net sales	—			41.0			75.6			95.8			Net sales	—			—			—			75.6
Royalty revenue	Royalty revenue	—			0.6			—			1.5			Royalty revenue	—			—			—			—
Advertising and other revenue	Advertising and other revenue	—			0.1			—			0.2			Advertising and other revenue	—			—			—			—
Total	Total	—			41.7			75.6			97.5			Total	—			—			—			75.6

Total Revenue	Total Revenue													Total Revenue
Net sales	Net sales	2,208.0			2,014.3			6,410.0			4,802.7			Net sales	2,144.7			2,208.0			6,182.4			6,410.0
Royalty revenue	Royalty revenue	97.4			79.7			248.0			185.7			Royalty revenue	105.4			97.4			273.7			248.0
Advertising and other revenue	Advertising and other revenue	27.1			24.1			67.0			54.4			Advertising and other revenue	30.7			27.1			79.4			67.0
Total	Total	$	2,332.5		$	2,118.1		$	6,725.0		$	5,042.8		Total	$	2,280.8		$	2,332.5		$	6,535.5		$	6,725.0

(1) Revenue was impacted by fluctuations of the United States dollar against foreign currencies in which the Company transacts significant levels of business.

~~(2)~~ Revenue in the thirteen and thirty-nine weeks ended November 1, 2020 was significantly negatively impacted by the COVID-19 pandemic, including as a result of reduced traffic and consumer spending trends, and temporary store closures for varying periods of time throughout the first quarter and into the second quarter of 2020. The Company’s wholesale customers and licensing partners also experienced significant business disruptions as a result of the pandemic, resulting in a decrease in the Company’s revenue from these channels. Revenue in the thirteen and thirty-nine weeks ended October 31, 2021 continued to be negatively impacted by the pandemic and related supply chain and logistics disruptions, although to a much lesser extent than in the prior year periods.

The Company’s revenue by distribution channel was as follows:


		Thirteen Weeks Ended				Thirty-Nine Weeks Ended					Thirteen Weeks Ended				Thirty-Nine Weeks Ended
(In millions)	(In millions)	10/31/21		11/1/20		10/31/21		11/1/20		(In millions)	10/30/22		10/31/21		10/30/22		10/31/21
Wholesale net sales	Wholesale net sales	$	1,308.4	$	1,117.9	$	3,756.3	$	2,611.7	Wholesale net sales	$	1,287.1	$	1,308.4	$	3,596.2	$	3,756.3

Owned and operated retail stores	Owned and operated retail stores	737.1		762.6		2,131.7		1,767.9		Owned and operated retail stores	710.7		737.1		2,113.9		2,131.7
Owned and operated digital commerce sites	Owned and operated digital commerce sites	162.5		133.8		522.0		423.1		Owned and operated digital commerce sites	146.9		162.5		472.3		522.0
Retail net sales	Retail net sales	899.6		896.4		2,653.7		2,191.0		Retail net sales	857.6		899.6		2,586.2		2,653.7
Net sales	Net sales	2,208.0		2,014.3		6,410.0		4,802.7		Net sales	2,144.7		2,208.0		6,182.4		6,410.0

Royalty revenue	Royalty revenue	97.4		79.7		248.0		185.7		Royalty revenue	105.4		97.4		273.7		248.0
Advertising and other revenue	Advertising and other revenue	27.1		24.1		67.0		54.4		Advertising and other revenue	30.7		27.1		79.4		67.0
Total	Total	$	2,332.5	$	2,118.1	$	6,725.0	$	5,042.8	Total	$	2,280.8	$	2,332.5	$	6,535.5	$	6,725.0

The Company’s (loss) income ~~(loss)~~ before interest and taxes by segment was as follows:
Thirteen Weeks Ended Thirty-Nine Weeks Ended
(In millions) 10/31/21 (1) 11/1/20 (1)(2) 10/31/21 (1) 11/1/20 (1)(2)
(Loss) income before interest and taxes – Tommy Hilfiger North America $ (1.2) $ (38.1) $ 18.4 (8) $ (120.3) (9)(10)
Income before interest and taxes – Tommy Hilfiger International 178.6 (4) 157.9 510.7 (8) 202.1 (10)
Income (loss) before interest and taxes – Calvin Klein North America 20.5 (14.1) 59.4 (8) (363.5) (9)(10)(11)
Income (loss) before interest and taxes – Calvin Klein International 110.9 (4) 85.8 306.2 (8) (303.0) (10)(11)
Income (loss) before interest and taxes – Heritage Brands Wholesale 116.7 (5) (2.3) (6) 160.1 (5) (296.9) (9)(11)(12)
Loss before interest and taxes – Heritage Brands Retail — (23.8) (7) (33.9) (7) (72.2) (7)(10)
Loss before interest and taxes – Corporate(3)
(48.3) (43.3)

(167.3) (8) (144.2) (9)(13)
Income (loss) before interest and taxes $ 377.2 $ 122.1 $ 853.6 $ (1,098.0)


	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
(In millions)	10/30/22		(1)	10/31/21		(1)	10/30/22		(1)	10/31/21		(1)
(Loss) income before interest and taxes – Tommy Hilfiger North America	$	(169.9)	(3)(4)	$	(1.2)		$	(184.8)	(3)(4)	$	18.4	(8)

Income before interest and taxes – Tommy Hilfiger International	121.7		(4)	178.6			349.6		(4)(6)	510.7		(8)

(Loss) income before interest and taxes – Calvin Klein North America	(140.0)		(3)(4)	20.5			(106.4)		(3)(4)	59.4		(8)

Income before interest and taxes – Calvin Klein International	12.1		(3)(4)	110.9			187.6		(3)(4)(6)	306.2		(8)

Income before interest and taxes – Heritage Brands Wholesale	7.3		(4)	116.7		(5)	37.5		(4)	160.1		(5)

Loss before interest and taxes – Heritage Brands Retail	—			—			—			(33.9)		(9)

Loss before interest and taxes – Corporate(2)	(45.2)		(4)	(48.3)			(110.2)		(4)(7)	(167.3)		(8)

(Loss) income before interest and taxes	$	(214.0)		$	377.2		$	173.3		$	853.6

(1) ~~Income (loss)~~(Loss) income 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) Income (loss) before interest and taxes in the thirteen and thirty-nine weeks ended November 1, 2020 was significantly adversely impacted by the COVID-19 pandemic, including as a result of the unprecedented material decline in revenue noted above. As well, loss before interest and taxes in the thirty-nine weeks ended November 1, 2020 was significantly adversely impacted by $961.8 million of noncash impairment chargesrelated to goodwill, tradenames, and other intangible assets, store assets and an equity method investment resulting from the significant adverse impacts of the pandemic on the Company’s business. Please see notes (10), (11) and (13) below for further discussion.

~~(3)~~Includes corporate expenses not allocated to any reportable segments, the results of PVH Ethiopia (through the closure of the Ethiopia factory in the fourth quarter of 2021) and the Company’s proportionate share of the net income or loss of its investment in Karl Lagerfeld ~~(prior to~~after the Company resumed the equity method of accounting for its ~~impairment~~investment in the ~~first~~fourth quarter of ~~2020).~~2021 and until the closing of the Karl Lagerfeld transaction on May 31, 2022. Please see Note 5, “Redeemable Non-Controlling Interest,” for further discussion of PVH Ethiopia and Note 6, “Investments in Unconsolidated Affiliates,” for further discussion of the Company’s investment in Karl Lagerfeld. 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, certain global strategic initiatives and actuarial gains and losses on the Company’s Pension Plans, SERP Plans and Postretirement Plans (which are generally recorded in the fourth quarter).

~~(4)~~(3) ~~Income~~(Loss) income before interest and taxes for the thirteen and thirty-nine weeks ended October ~~31, 2021~~30, 2022 included a noncash goodwill impairment charge of $417.1 million. The $417.1 million goodwill impairment charge was included in the Company’s segments as follows: $177.2 million in Tommy Hilfiger North America, $162.6 million in Calvin Klein North America and $77.3 million in Calvin Klein International. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

(4) (Loss) income before interest and taxes for the thirteen and thirty-nine weeks ended October 30, 2022 included costs of ~~$2.5~~$16.7 million incurred related to the cost savings initiative described in connection with actions to streamline the Company’s organization through reductions in its workforce, primarily in certain international markets, and to reduce its real estate footprint, including reductions in office space and select store closures,Note 16, “Exit Activity Costs,” consisting of

severance. Such costs were included in the Company’s segments as follows: ~~$1.8~~$4.2 million in Tommy Hilfiger North America, $2.1 million in Tommy Hilfiger International, ~~and $0.7~~$4.0 million in Calvin Klein ~~International.~~North America, $2.7 million in Calvin Klein International, $2.2 million in Heritage Brands Wholesale and $1.5 million in corporate expenses not allocated to any reportable segments. Please see Note 16, “Exit Activity Costs,” for further discussion.

(5)Income before interest and taxes for the thirteen and thirty-nine weeks ended October 31, 2021 included an aggregate net gain of $113.4 million in connection with the Heritage Brands transaction, consisting of (i) a $118.9 million gain, including a gain on the sale, less costs to sell, and a net gain on the Company’s retirement plans associated with the transaction partially offset by (ii) $5.5 million of severance costs. Please see Note 4, “Acquisitions and Divestitures,” for further discussion of the transaction.

(6) ~~Loss~~Income before interest and taxes for the ~~thirteen~~thirty-nine weeks ended ~~November 1, 2020~~October 30, 2022 included costs of ~~$1.3~~$50.5 million incurred in connection with the ~~North America workforce reduction,~~Company’s decision to exit from its Russia business, principally consisting of ~~severance~~noncash asset impairments. Such costs were included in the Company’s segments as follows: $36.7 million in Tommy Hilfiger International and ~~other termination benefits.~~$13.8 million in Calvin Klein International. Please see Note 16, “Exit Activity Costs,” for further discussion.

(7)Loss before interest and taxes for the thirty-nine weeks ended October ~~31, 2021, and the thirteen and thirty-nine weeks ended November 1, 2020~~30, 2022 included ~~costs and operating losses, as well as noncash asset impairments~~a gain of $16.1 million in ~~the prior year period, associated~~connection with the ~~wind down of the Heritage Brands Retail business that was substantially completed in the second quarter of 2021.~~Karl Lagerfeld transaction. Please see Note ~~16, “Exit Activity Costs,~~6, “Investments in Unconsolidated Affiliates,” for further discussion.

(8) Income (loss) before interest and taxes for the thirty-nine weeks ended October 31, 2021 included costs of $47.6 million incurred in connection with actions to streamline the Company’s organization through reductions in its workforce, primarily in certain international markets, and to reduce its real estate footprint, including reductions in office space and select store closures, consisting of noncash ~~assets~~asset impairments, severance, and contract termination and other costs. Such costs were included in the Company’s segments as follows: $1.7 million in Tommy Hilfiger North America, $8.9 million in Tommy Hilfiger International, $2.1 million in Calvin Klein North America, $6.4 million in Calvin Klein International and $28.5 million in corporate expenses not allocated to any reportable segments. Please see Note 16, “Exit Activity Costs,” for further discussion.

(9) Loss before interest and taxes for the thirty-nine weeks ended ~~November 1, 2020~~October 31, 2021 included costs ~~of $39.7 million incurred in connection~~and operating losses associated with the ~~North America workforce reduction, consisting~~wind down of ~~severance and special termination benefits. Such costs were included~~the Heritage Brands Retail business that was substantially completed in the Company’s segments as follows: $10.9 million in Tommy Hilfiger North America, $10.5 million in Calvin Klein North America, $12.5 million in Heritage Brands Wholesale, and $5.8 million in corporate expenses not allocated to any reportable segments.second quarter of 2021. Please see Note 16, “Exit Activity Costs,” for further discussion.

~~(10)~~ (Loss) income before interest and taxes for the thirty-nine weeks ended November 1, 2020 included noncash impairment charges of $16.0 million related to the Company’s store assets. The $16.0 million of impairment charges were included in the Company’s segments as follows: $4.1 million in Tommy Hilfiger North America, $3.1 million in Tommy Hilfiger International, $3.2 million in Calvin Klein North America, $1.8 million in Calvin Klein International and $3.8 million in Heritage Brands Retail. Please see Note 12, “Fair Value Measurements,” for further discussion.

~~(11)~~ Loss before interest and taxes for the thirty-nine weeks ended November 1, 2020 included noncash impairment charges of $933.5 million, primarily related to goodwill, tradenames and other intangible assets. The $933.5 million of impairment charges were included in the Company’s segments as follows: $289.9 million in Calvin Klein North America, $394.0 million in Calvin Klein International and $249.6 million in Heritage Brands Wholesale. Please see Note 7, “Goodwill and Other Intangible Assets,” for further discussion.

~~(12)~~ Loss before interest and taxes for the thirty-nine weeks ended November 1, 2020 included a noncash net loss of $3.1 million in connection with the Speedo transaction. Please see Note 4, “Acquisitions and Divestitures,” for further discussion.

~~(13)~~ Loss before interest and taxes for the thirty-nine weeks ended November 1, 2020 included a noncash impairment charge of $12.3 million related to the Company’s equity method investment in Karl Lagerfeld. Please see Note 6, “Investments in Unconsolidated Affiliates,” for further discussion.

Intersegment transactions, which primarily consist of transfers of inventory, are not material.

20. GUARANTEES

The Company has guaranteed a portion of the debt of its joint venture in India. The maximum amount guaranteed as of October ~~31, 2021~~30, 2022 was approximately ~~$18.6~~$9.0 million based on exchange rates in effect on that date. The guarantee is in effect for the entire term of the debt. The liability for this guarantee obligation was immaterial as of October 30, 2022, January 30, 2022 and October 31, 2021 ~~January 31, 2021 and November 1, 2020~~.

The Company has guaranteed to a financial institution the repayment of store security deposits in Japan paid to landlords on behalf of the Company. The amount guaranteed as of October ~~31, 2021~~30, 2022 was approximately ~~$5.1~~$4.2 million based on exchange rates in effect on that date. The Company has the right to seek recourse from the landlords for the full amount. The guarantees expire between ~~2022~~2025 and ~~2025.~~2028. The liability for these guarantee obligations was immaterial as of October 30, 2022, January 30, 2022 and October 31, 2021 ~~January 31, 2021 and November 1, 2020~~.

The Company has guaranteed the payment of amounts on behalf of certain other parties, none of which are material individually or in the aggregate.

21. RECENT ACCOUNTING GUIDANCE

Recently Adopted Accounting Guidance

The FASB issued in ~~December 2019~~November 2021 an update to accounting guidance ~~to simplify~~requiring disclosures that increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (i) the types of transactions, (ii) the accounting for ~~income taxes by eliminating certain exceptions to~~those transactions, and (iii) the existing guidance and clarifying and amending certain guidance to reduce diversity in practice. The update eliminates certain exceptions to the guidance related to the approach for intra-period tax allocation, the methodology for calculating income taxes ineffect of those transactions on an interim period and the recognition of deferred tax liabilities for outside basis differences. The update also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.entity’s financial statements. The Company adopted the update in the first quarter of ~~2021.~~2022 using the prospective approach. The adoption of the update did not have any impact on the Company’s consolidated financial ~~statements.~~statements footnote disclosures as the amount of government assistance recorded in the Company’s consolidated financial statements as of and for the thirty-nine weeks ended October 30, 2022 was immaterial.

Accounting Guidance Issued But Not Adopted as of October ~~31,~~30, 2022

The FASB issued in September 2022 an update to accounting guidance requiring disclosures that increase the transparency surrounding the use of supplier finance programs, including the key terms of the programs, and information about the obligations under these programs, including a rollforward of those obligations. The update does not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. The update will be effective for the Company in the first quarter of 2023 on a retrospective basis, except for the requirement to disclose rollforward information, which will be effective for the Company in the first quarter of 2024 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the update to determine the impact the adoption will have on the Company’s consolidated financial statements footnote disclosures related to its supply chain finance program.

The FASB issued in October 2021 an update to accounting guidance to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to their recognition and measurement. The update requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with the revenue recognition guidance. This generally will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree immediately before the acquisition date. Historically, such amounts were recognized by the acquirer at fair value. The update will be effective for the Company in the first quarter of 2023, with early adoption permitted. The Company will apply the update to applicable transactions occurring on or after the adoption date. The impact on the Company’s consolidated financial statements will depend on the facts and circumstances of any future transactions.

The FASB issued in March 2020 an update to provide temporary optional guidance intended to ease the potential burden of accounting for reference rate reform. The amendments in the update provide optional expedients and exceptions for applying ~~accounting principles generally accepted in the United States~~U.S. GAAP to contract modifications, hedging relationships and other transactions affected by the expected market transition from LIBOR and other interbank offered rates to alternative reference rates if certain criteria are met. The amendments were effective upon issuance and can be applied on a prospective basis through December 31, 2022. The adoption of the update is not expected to have a material impact on the Company’s consolidated financial statements.

22. OTHER COMMENTS

Wuxi Jinmao Foreign Trade Co., Ltd. (“Wuxi”), one of the Company’s finished goods inventory suppliers, has a wholly owned subsidiary with which the Company entered into a loan agreement in 2016. Under the agreement, Wuxi’s subsidiary borrowed a principal amount of $13.8 million for the development and operation of a fabric mill. Principal payments are due in semi-annual installments beginning March 31, 2018 through September 30, 2026. The outstanding principal balance of the loan bears interest at a rate of (i) 4.50% per annum until the sixth anniversary of the closing date of the loan and (ii) LIBOR plus 4.00% thereafter. The Company received principal payments of $6.0 million and $0.8 million during the thirty-nine weeks ended October 31, 2021 and November 1, 2020, respectively. The outstanding balance, including accrued interest, was $6.4 million, $12.6 million and $12.5 million as of October 31, 2021, January 31, 2021 and November 1, 2020, respectively, and was included in other assets (current and non-current) in the Company’s Consolidated Balance Sheets.

The Company records warehousing and distribution expenses, which are subject to exchange rate fluctuations, as a component of SG&A expenses in its Consolidated Statements of Operations. Warehousing and distribution expenses incurred in the

thirteen and thirty-nine weeks ended October 30, 2022 totaled $93.1 million and $259.9 million, respectively. Warehousing and distribution expenses incurred in the thirteen and thirty-nine weeks ended October 31, 2021 totaled $80.7 million and $244.7 million, respectively. Warehouse and distribution expenses incurred in the thirteen and thirty-nine weeks ended November 1, 2020 totaled $90.2 million and $248.3 million, respectively, and included costs of $6.8 million in the thirty-nine weeks ended November 1, 2020 related to the consolidation within the Company’s warehouse and distribution network in North America.

The Company is exposed to credit losses primarily through trade receivables from its customers and licensees. The Company records an allowance for credit losses as a reduction to its trade receivables for amounts that the Company does not expect to recover. An allowance for credit losses is determined through an analysis of the aging of accounts receivable and assessments of collectibility based on historical trends, the financial condition of the Company’s customers and licensees, including any known or anticipated bankruptcies, and an evaluation of current economic conditions as well as the Company’s expectations of conditions in the future. The Company writes off uncollectible trade receivables once collection efforts have been exhausted and third parties confirm the balance is not recoverable. The allowance for credit losses on trade receivables was ~~$64.3~~$50.9 million, ~~$69.6~~$61.9 million and ~~$76.8~~$64.3 million as of October 30, 2022, January 30, 2022 and October 31, 2021, ~~January 31, 2021 and November 1, 2020,~~ respectively. The Company recorded a $55.7 million increase in the allowance for credit losses on trade receivables during the thirty-nine weeks ended November 1, 2020, primarily due to the evaluation of certain customer and licensee account balances in connection with changes in their financial condition and/or developments regarding their credit, including the adverse impacts of the COVID-19 pandemic.

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


We aggregate our ~~reporting~~reportable segments into three main businesses: (i) Tommy Hilfiger, which consists of the businesses we operate under our TOMMY HILFIGER trademarks; (ii) Calvin Klein, which consists of the businesses we operate under our Calvin Klein trademarks; and (iii) Heritage Brands, which consists of the businesses we operate under our Warner’s, Olga and True&Co. trademarks, the Van Heusen, IZOD, ARROW and Geoffrey Beene trademarks, which we owned until August 2, 2021 and now license back for certain product categories, ~~the~~ ~~Speedo~~ ~~trademark, which we licensed for North America and the Caribbean until April 6, 2020,~~ and other licensed trademarks. References to brand names are to registered and common law trademarks owned by us or licensed to us by third parties and are identified by italicizing the brand name.

OVERVIEW

The following discussion and analysis is intended to help you understand us, our operations and our financial performance. It should be read in conjunction with our consolidated financial statements and the accompanying notes, which are included in the immediately preceding item of this report.

We are one of the largest global apparel companies in the world with a history going back over 140 ~~years. In March 2020, we marked our 100-year anniversary as a~~years and have been listed ~~company~~ on the New York Stock ~~Exchange.~~Exchange for over 100 years. We manage a portfolio of iconic brands, including TOMMY HILFIGER, Calvin Klein, Warner’s, Olga and True&Co., which are owned, Van Heusen, IZOD, ARROW and Geoffrey Beene, which we owned through the second quarter of 2021 and now license back for certain product categories, and other licensed brands. ~~We also had a perpetual license for~~ ~~Speedo~~ ~~in North America and the Caribbean until April 6, 2020. We entered into a definitive agreement during the second quarter of 2021 to sell certain of our heritage brands trademarks, including~~ ~~Van~~ ~~Heusen~~, ~~IZOD, ARROW~~ ~~and~~ ~~Geoffrey Beene~~, as well as certain related inventories of our Heritage Brands business, to Authentic Brands Group (“ABG”) and other parties (the “Heritage Brands transaction”). We completed the sale on the first day of the third quarter.

Our business strategy is to win with the consumer by driving brand and product relevance, while strengthening our commitment to sustainability and circularity. We are focused on driving the success of our product by focusing on key growth categories and developing strong hero product that the consumer desires, connecting the products to where the consumer is shopping. Our brands are positioned to sell globally at various price points and in multiple channels of distribution. This enables us to offer differentiated products to a broad range of consumers, reducing our reliance on any one demographic group, product category, price point, distribution channel or region. We also license the use of our trademarks to third parties and joint ventures for product categories and in regions where we believe our licensees’ expertise can better serve our brands.

~~We generated~~Our revenue ~~of $7.1 billion and $9.9~~was $9.2 billion in ~~2020 and 2019, respectively. Over~~2021, of which over 60% ~~of our revenue in 2020 and over 50% of our revenue in 2019~~ was generated outside of the United States. Our ~~business was significantly negatively impacted by the COVID-19 pandemic during 2020, resulting in an unprecedented material decline in revenue. Our global lifestyle~~iconic brands, TOMMY ~~HILFIGER~~ ~~and~~ HILFIGER and CalvinKlein, ~~accounted for~~together generated over ~~85%~~90% of our ~~revenue during 2020 and 2019.~~revenue.

PVH+ Plan

At our April 2022 Investor Day, we introduced the PVH+ Plan, our multi-year, strategic plan to drive brand-, digital- and direct-to-consumer-led growth to accelerate financial performance. The PVH+ Plan builds on our core strengths and connects Calvin Klein and TOMMY HILFIGER closer to the consumer than ever before through five key drivers: (1) win with product, (2) win with consumer engagement, (3) win the digitally-led marketplace, (4) develop a demand- and data-driven operating model, and (5) drive efficiencies and invest in growth. These five foundational drivers apply to each of our businesses and are activated in the regions to meet the unique expectations of our consumers around the world and deliver long-term sustainable growth.

RESULTS OF OPERATIONS

War in Ukraine

As a result of the war in Ukraine, we announced in March 2022 that we were temporarily closing stores and pausing commercial activities in Russia and Belarus. In the second quarter of 2022, we made the decision to exit from our Russia business, including the closure of our retail stores in Russia and the cessation of our wholesale operations in Russia and Belarus. Additionally, while we have no direct operations in Ukraine, virtually all of our wholesale customers and franchisees in Ukraine have closed their stores, which has resulted in a reduction in shipments to these customers and canceled orders.

We recorded pre-tax costs of $50 million in the second quarter of 2022 in connection with our decision to exit from the Russia business, consisting of (i) $44 million of noncash asset impairments, (ii) $5 million of contract termination and other costs and (iii) $2 million of severance. Please see Note 16, “Exit Activity Costs,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

In addition, our revenue in the thirteen and thirty-nine weeks ended October 30, 2022 reflected a reduction of approximately $37 million and $92 million respectively, as compared to the prior year periods, as a result of the war in Ukraine. Our net income in the thirteen and thirty-nine weeks ended October 30, 2022 also reflected a reduction of approximately $13 million and $32 million, respectively,apart from the $50 million of pre-tax costs discussed above, as well as the related tax impact, as

compared to the prior year periods. We currently expect the impact of the war in Ukraine will have a negative impact on our full year 2022 revenue of approximately $140 million, or 2%,and on our full year 2022 net income of approximately $45 million, apart from the $50 million of pre-tax costs discussed above. Approximately 2% of our revenue in 2021 was generated in Russia, Belarus and Ukraine.

The war also has led to, and may lead to further, broader macroeconomic implications, including the weakening of the euro against the United States dollar, increases in fuel prices and volatility in the financial markets, as well as a decline in consumer spending. There is significant uncertainty regarding the extent to which the war and its broader macroeconomic implications, including the potential impacts on the broader European market, will impact our business, financial condition and results of operations for the remainder of 2022 and beyond.

Inflationary Pressures

We believe inflationary pressures have negatively impacted our revenue and earnings during the first nine months of 2022 and are expected to continue to negatively impact our revenue and earnings for the remainder of the year and into the following year, including (i) increased costs of labor, raw materials and freight and (ii) beginning late in the second quarter, a slowdown in consumer demand for our products.

We implemented price increases in certain regions and for certain product categories during2022 to mitigate the higher costs. However, the extent to which we will be able to implement further price increases in the future may be limited, particularly as inflationary pressures have slowed consumer demand for our products, as consumers reduce discretionary spend and certain of our wholesale customers take a more cautious approach, particularly in North America andto a lesser extent in Europe. We also expect the increased promotional environment in all channels to continue due to elevated inventory levels industry-wide compared to consumer demand. Inflation did not have a significant impact on our results of operations in 2021.

COVID-19 Pandemic Update

The COVID-19 pandemic has had, and ~~continues~~may continue to have, a significant impact on our business, results of operations, financial condition and cash flows from operations.

Our ~~retail~~ stores have been and continue to be impacted by temporary closures ~~reduced hours~~ and reduced ~~occupancy levels~~hours as a result of the ~~pandemic:~~

•Virtually all of our retail stores were temporarily closed for varying periods of time throughout the first quarter and into the second quarter of 2020, but had reopened in June 2020 and were operating at significantly reduced capacity. Further, our retail stores in Europe and North America continued to face significant pressure as a result of the pandemic, with the majority of our stores in Europe and Canada closed during the fourth quarter of 2020.

•pandemic. During the first quarter of 2021, pandemic-related pressures on our ~~retail~~ stores included temporary ~~store~~ closures for a significant percentage of our stores in Europe, Canada and Japan. Pressures on our ~~retail~~ stores continued ~~during the second quarter of~~throughout 2021, with certain ~~retail~~ stores in Europe, Japan and Australia temporarily closed for varying periods of ~~time. During~~time in the ~~third~~second quarter, ~~of 2021,~~ the majority of our ~~retail~~ stores in Australia closed temporarily in the third quarter, and the temporary closure of certain stores in Europe and China for varying periods of time in the fourth quarter. Further, a significant percentage of our stores globally were ~~closed temporarily.~~

operating on reduced hours during the fourth quarter of 2021 as a result of increased levels of associate absenteeism due to the pandemic.

COVID-related pressures have continued into 2022, although to a much lesser extent than in the prior year period in all regions except China, as strict lockdowns in China have resulted, and continue to result, in extensive temporary store closures and significant reductions in consumer traffic and purchasing, as well as have impacted certain warehouses, which resulted in the temporary pause of deliveries to our wholesale customers and from our digital commerce businesses in the first half of 2022.

•

In addition, our North America ~~retail~~ stores have been, and are expected to continue to be, challenged by the ~~lack of~~significant decrease in international tourists coming to the United States, ~~as stores~~although to a lesser extent than in 2021. Stores located in international tourist destinations have historically represented a significant portion of ~~that~~this business.

Our brick and mortar wholesale customers and our licensing partners also have experienced significant business disruptions as a result of the ~~pandemic, with several of our North America wholesale customers filing for bankruptcy in 2020.~~pandemic. Our wholesale customers and franchisees globally generally have experienced temporary store closures and operating restrictions and obstacles in the same countries and at the same times as us. Although most of our wholesale customers’ and franchisees’ stores had reopened the majority of their locations across all regions by mid-June 2020, there was a significant level of inventory that remained in their stores. The elevated inventory levels, as well as lower traffic and consumer demand, resulted in a sharp reduction in shipments to these customers in 2020.

Our digital channels, which have historically represented a less significant portion of our overall business, experienced exceptionally strong growth during 2020 and into the first quarter of 2021, both with respect to sales to our traditional and pure play wholesale customers, as well as within our own directly operated digital commerce businesses across all brand businesses and regions. ~~While digital~~Digital growth ~~has been, and is expected to continue to be,~~was less pronounced induring the remainder of 2021 as stores ~~have~~ reopened and capacity restrictions ~~have lessened,~~lessened. We currently expect sales through our digital channels to decrease 10% in 2022 compared to 2021, inclusive of a negative impact of approximately 9% related to foreign currency translation, with digital penetration as a percentage of total revenue ~~has been, and is~~ expected to remain consistent with ~~2020.~~2021 at nearly 25%.

In addition, the pandemic has impacted, and continues to impact, our supply chain partners, including third party manufacturers, logistics providers and other vendors, as well as the supply chains of our licensees. The ~~current~~ vessel, container and other transportation shortages, labor shortages and port congestion globally, as well as ~~factory~~production delays in some of our key sourcing countries has delayed and ~~is expected to~~could continue to delay ~~inventory~~product orders and, in turn, deliveries to our wholesale customers and availability in our stores and for our directly operated digital commerce businesses. These supply chain and logistics disruptions have impacted, and continue to impact, our inventory levels, including in-transit goods, which currently remain elevated as compared to 2021, and our sales volumes, ~~particularly in~~although the impacts were not as pronounced as of the end of the third quarter of ~~2021 with worsening logistics delays in October resulting in a shift in timing of certain wholesale shipments~~2022 as compared to the preceding 12 to 18 months. We have incurred beginning in the ~~United States from the third quarter into the fourth quarter, and could impact our sales volumes in future periods. We have also incurred in the third quarter~~second half of 2021 and ~~expect to continue to incur for~~through the ~~remainder~~first half of ~~the year,~~2022 higher air freight and other logistics costs ~~including air freight, to mitigate these delays. We continue to monitor these delays and other potential disruptions~~ in ~~our supply chain and will continue to implement mitigation plans as needed.~~

Throughout the pandemic, our top priority has been to ensure the health and safety of our associates, consumers and employees of our business partners around the world. Accordingly, we have implemented health and safety measures to support high standards in our retail stores, office and distribution centers, including temporary closures, reduced occupancy levels, and social distancing and sanitization measures, as well as changes to fitting room use in our stores. We have incurred and expect to continue to incur additional costs associatedconnection with these ~~measures.~~

~~We took~~disruptions. To mitigate the following actions, starting in the first quarter of 2020, to reduce operating expenses in response to the pandemic and the evolving retail landscape: (i) reducing payroll costs, including temporary furloughs, salary and incentive compensation reductions, decreased working hours, and hiring freezes, as well as taking advantage of COVID-related government payroll subsidy programs primarily in international jurisdictions, (ii) eliminating or reducing expenses in all discretionary spending categories and (iii) reducing rent expense through rent abatements negotiated with landlords for certain stores affected by temporary closures. We also announced in July 2020 plans to streamline our North American operations to better align our business with the evolving retail landscape, including (i) a reduction in our North America office workforce by approximately 450 positions, or 12%, across all three brand businesses and corporate functions, which has resulted in annual cost savings of approximately $80 million, and (ii) the exit from our Heritage Brands Retail business, which was substantially completed in the second quarter of 2021. In March 2021, we announced plans to reduce our workforce, primarily in certain international markets, and to reduce our real estate footprint, including reductions in office space and select store closures, which are expected to result in annual cost savings of approximately $60 million.

~~We also have taken and continue to take actions to manage our working capital and liquidity. Please see the section entitled “Liquidity and Capital Resources” below for further discussion.~~

The impacts of the COVID-19 pandemic resulted in an unprecedented material decline in our revenue and earnings in 2020, including $1.021 billion of pre-tax noncash impairment charges recognized during the year, primarily related to goodwill, tradenames and other intangible assets, and store assets. There continues to be uncertainty with respect to the impact of the pandemic, including the new variant, and pandemic-related supply chain and logistics disruptions, we have increased our core product inventory levels.

Outlook Uncertainty due to War in Ukraine, Inflation, and COVID-19

There continues to be significant uncertainty in the current macroeconomic environment due to inflationary pressures globally, ~~on our business~~the war in Ukraine, the COVID-19 pandemic and ~~the businesses~~foreign currency volatility. Our 2022 outlook assumes no material worsening of ~~our licensees and wholesale customers, and our~~current conditions. Our revenue and earnings infor the ~~fourth quarter~~remainder of ~~2021~~2022 may be subject to significant material change. ~~While our international businesses have exceeded and are expected to continue to exceed~~

2019 pre-pandemic revenue levels for the remainder of the year, our North America businesses are expected to remain challenged, as international tourism, which historically has been the source of a significant portion of regional revenue, is not expected to return to any significant level.

Operations Overview

We generate net sales from (i) the wholesale distribution to traditional retailers (both for stores and digital operations), pure play digital commerce retailers, franchisees, licensees and distributors of branded sportswear (casual apparel), jeanswear, performance apparel, intimate apparel, underwear, swimwear, dress shirts, neckwear, handbags, accessories, footwear and other related products under owned and licensed trademarks, and (ii) the sale of certain of these products through (a) approximately ~~1,600~~ 1,500Company-operated free-standing ~~retail~~ store locations worldwide under our TOMMY HILFIGER and Calvin Klein trademarks, (b) approximately 1,400Company-operated shop-in-shop/concession locations worldwide under our TOMMY HILFIGER and Calvin Klein trademarks, and (c) digital commerce sites worldwide, principally under our TOMMY HILFIGER and Calvin Klein ~~trademarks, and in the United States through our directly operated digital commerce site for~~ ~~VanHeusen~~ ~~and~~ ~~IZOD, which ceased operations during the third quarter of 2021 in connection with the Heritage Brands transaction.~~trademarks. We announced in ~~July~~ 2020 a plan to exit our Heritage Brands Retail business, which ~~consisted of 162 directly operated stores in North~~ ~~America and~~ was substantially completed in the second quarter of 2021. Additionally, we generate royalty, advertising and other revenue from fees for licensing the use of our trademarks. We manage our operations through our operating divisions, which are presented as the following reportable segments: (i) Tommy Hilfiger North America; (ii) Tommy Hilfiger International; (iii) Calvin Klein North America; (iv) Calvin Klein International; (v) Heritage Brands Wholesale; and, (vi) ~~Heritage Brands Retail until the end of~~through the second quarter of ~~2021. We announced in July 2020 a plan to exit our~~ 2021, Heritage Brands ~~Retail business and our~~Retail. Our Heritage Brands Retail segment has ceased ~~operations following the substantial completion of the exit in the second quarter of 2021.~~operations.

WeThe following actions, transactions and events, in addition to the exit from our Russia business discussed above, have ~~entered into the following transactions, which impact~~impacted our results of operations and the comparability among the periods, including our full year ~~2021~~2022 expectations as compared to the full year ~~2020,~~2021, as discussed below:

•We recorded a pre-tax noncash goodwill impairment charge of $417 million in the ~~section entitled “Results~~third quarter of ~~Operations” below:~~2022 in conjunction with our annual goodwill and other indefinite-lived intangible asset impairment testing. The impairment was non-operational and driven by a significant increase in discount rates as a result of current economic conditions. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

•We announced in August 2022 plans to reduce people costs in our global offices by approximately 10% by the end of 2023 to drive efficiencies and enable continued strategic investments to fuel growth, including in digital, supply chain and consumer engagement (the “2022 cost savings initiative”), which is expected to result in annual cost savings of approximately $100 million, net of continued strategic people investments. We recorded pre-tax costs of $17 million during the third quarter of 2022, consisting of severance related to initial actions taken under the plans. We expect to incur additional costs in connection with the 2022 cost savings initiative, however the additional costs are not known at this time. Please see Note 16, “Exit Activity Costs,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

•We entered into a definitive agreement ~~in June 2021~~on April 29, 2022 to sell our approximately 8% economic interest in Karl Lagerfeld Holding B.V. (“Karl Lagerfeld”) to a subsidiary of G-III Apparel Group, Ltd. (“G-III”) (the “Karl Lagerfeld transaction”). We completed the sale on May 31, 2022 for approximately $20 million in cash, subject to customary adjustments, with $1 million of the proceeds held in escrow. We recorded a pre-tax gain of $16 million in the second quarter of 2022 in connection with the transaction. Please see Note 6, “Investments in Unconsolidated Affiliates,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion of the

transaction.

•We completed the sale of certain of our heritage brands trademarks, including Van Heusen, IZOD, ARROW and Geoffrey Beene, as well as certain related inventories of our Heritage Brands business with a net carrying value of $98 million, to ~~ABG~~Authentic Brands Group (“ABG”) and other parties ~~and subsequently completed the sale~~(the “Heritage Brands transaction”), on the first day of the third quarter of 2021 for net proceeds of $216 million. We recorded an aggregate net pre-tax gain of $113 million in the third quarter of 2021 in connection with the transaction, consisting of (i) a gain of $119 million, which represented the excess of the amount of consideration received over the carrying value of the net assets, less costs to sell, and a net gain on our retirement plans associated with the transaction, partially offset by (ii) $6 million of pre-tax severance costs. Please see Note 4, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion of the transaction.

•We announced in March 2021 plans to reduce our workforce, primarily in certain international markets, and to reduce our real estate footprint, including reductions in office space and select store closures, which ~~are expected to result~~have resulted inannual cost savings of approximately $60 million. We recorded pre-tax costs of $48 million during ~~the thirty-nine weeks ended October 31,~~ 2021 consisting of (i) $28 million of noncash asset impairments, (ii) $16 million of severance and (iii) $4 million of contract termination and other costs. All costs related to these actions were incurred by the end of the third quarter of 2021. Please see Note 16, “Exit Activity Costs,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

•We announced in July 2020 ~~plans~~a plan to streamline our North American operations to better align our business with the evolving retail landscape including (i) a reduction in our office workforce by approximately 450 positions, or 12%, across all three brand businesses and corporate functions (the “North America workforce reduction”), which has resulted in annual cost savings of approximately $80 million, and (ii) the exit ~~from~~ our Heritage Brands Retail business, which was substantially completed in the second quarter of 2021. ~~All costs related to the North America workforce reduction were incurred by the end of 2020.~~ We recorded pre-tax costs of $21 million during ~~the thirty-nine weeks ended October 31,~~ 2021 in connection with the exit from the Heritage Brands Retail business, consisting of ~~(i)~~ $11 million of severance and other termination benefits, ~~(ii)~~ $6 million of accelerated amortization of lease assets and (iii) $4 million of contract termination and other costs. All costs related to the exit from the Heritage Brands Retail business were substantially incurred by the end of the second quarter ~~2021. We recorded pre-tax costs~~ of $69 million during 2020, including (i) $40 million related to the North America workforce reduction, primarily consisting of severance, and (ii) $29 million in connection with the exit from the Heritage Brands Retail business, consisting of $15 million of severance, $7 million of noncash asset impairments and $7 million of accelerated amortization of lease

~~assets and other costs.~~2021. Please see Note 16, “Exit Activity Costs,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

•~~We completed the sale of our Speedo North America business to Pentland Group PLC (“Pentland”), the parent company of the~~ ~~Speedo~~ brand, in April 2020 for net proceeds of $169 million (the “Speedo transaction”). Upon the closing of the transaction, we deconsolidated the net assets of the Speedo North America business. We recorded a pre-tax noncash loss of $142 million in the fourth quarter of 2019, when the Speedo transaction was announced, 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 recorded an additional pre-tax noncash net loss of $3 million in the first quarter of 2020 upon the closing of the Speedo transaction, consisting of (i) a $6 million noncash loss resulting from the remeasurement of the loss recorded in the fourth quarter of 2019, primarily due to changes to the net assets of the Speedo North America business subsequent to February 2, 2020, partially offset by (ii) a $3 million gain on our retirement plans. Please see Note 4, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

•We completed the acquisition of the approximately 78% interest in Gazal Corporation Limited (“Gazal”) that we did not already own (the “Australia acquisition”) in 2019. Prior to the closing of the Australia acquisition, we, along with Gazal, jointly owned and managed a joint venture, PVH Brands Australia Pty. Limited (“PVH Australia”), which licensed and operated businesses under the ~~TOMMY HILFIGER, Calvin Klein~~ ~~and~~ ~~Van Heusen~~ brands, along with other licensed and owned 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. Pursuant to the terms of the acquisition agreement, key executives of Gazal and PVH Australia exchanged a portion of their interests in Gazal for approximately 6% of the outstanding shares of our previously wholly owned subsidiary that acquired 100% of the ownership interests in the Australia business, for which we recognized a liability on the date of the acquisition. We settled in June 2020 a portion of the liability for this mandatorily redeemable non-controlling interest for $17 million, and settled in June 2021 the remaining liability for $24 million.

In connection with the Australia acquisition we recorded a pre-tax expense of $5 million during 2020 in interest expense resulting from the remeasurement of this mandatorily redeemable non-controlling interest. Please see Note 4, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Our Tommy Hilfiger and Calvin Klein businesses each have substantial international components that expose us to significant foreign exchange risk. Our Heritage Brands business also has international components but those components are not significant to the business. Our results of operations in local foreign currencies are translated into United States dollars using an average exchange rate over the representative period. Accordingly, our results of operations are unfavorably impacted during times of a strengthening United States dollar against the foreign currencies in which we generate significant revenue and earnings and favorably impacted during times of a weakening United States dollar against those currencies. Over 60% of our ~~2020~~2021 revenue was subject to foreign currency translation. The United States dollar ~~strengthened against most major currencies in 2019 and into the first half of 2020, but then~~ weakened against ~~those currencies in the latter half of 2020, particularly~~ the euro, which is the foreign currency in which we transact the most ~~business. While the United States dollar continued to weaken against the euro~~business, in the first half of 2021, ~~it has~~but then strengthened in the ~~third quarter and into~~second half of 2021. The United States dollar continued to strengthen against the ~~fourth quarter of 2021.~~euro, as well as against most major currencies, during the nine months ended October 30, 2022. We currently expect our ~~2021~~2022 revenue and net income to ~~increase~~decrease by approximately ~~$120~~$670 million and ~~$20~~$75 million, respectively, due to the impact of foreign currency translation.

There also is ~~also~~ a transactional impact of foreign exchange on our financial results because inventory typically is purchased in United States dollars by our foreign subsidiaries. Our results of operations will be unfavorably impacted during times of a strengthening United States dollar, as the increased local currency value of inventory results in a higher cost of goods in local currency when the goods are sold, and favorably impacted during times of a weakening United States dollar, as the decreased local currency value of inventory results in a lower cost of goods in local currency when the goods are sold. We use foreign currency forward exchange contracts to hedge against a portion of the exposure related to this transactional impact. The contracts cover at least 70% of the projected inventory purchases in United States dollars by our foreign subsidiaries. These contracts are generally entered into 12 months in advance of the related inventory purchases. Therefore, the impact of fluctuations of the United States dollar on the cost of inventory purchases covered by these contracts may be realized in our results of operations in the year following their inception, as the underlying inventory hedged by the contracts is sold. We currently expect our ~~2021~~2022 net income to ~~increase~~decrease by approximately ~~$30~~$25 milliondue to the transactional impact of foreign currency. Given the current exchange rates, particularly the euro, we also expect our 2023 net income to decrease due to the transactional impact of foreign currency, and by a greater amount than in 2022, with an expected negative impact to our 2023 gross margin of approximately 100 basis points.

~~Further, we~~We also have exposure to changes in foreign currency exchange rates related to our €1.125 billion aggregate principal amount of senior notes that are held in the United States. The strengthening of the United States dollar against the euro would require us to use a lower amount of our cash flows from operations to pay interest and make long-term debt repayments, whereas the

weakening of the United States dollar against the euro would require us to use a greater amount of our cash flows from operations to pay interest and make long-term debt repayments. We designated the carrying amount of these senior notes issued by PVH Corp., a ~~U.S. based~~U.S.-based entity, as net investment hedges of our investments in certain of our foreign subsidiaries that use the euro as their functional currency. As a result, the remeasurement of these foreign currency borrowings at the end of each period is recorded in equity.

We conduct business in countries that are or have been subject to significant inflation rates. The impact of currency devaluation in countries experiencing high inflation rates, as is the case in Turkey, can unfavorably impact our results of operations. Since the first day of the second quarter of 2022, we have been accounting for our operations in Turkey as highly inflationary, as the prior three-year cumulative inflation rate has surpassed 100%. As a result, we have changed the functional currency of our subsidiary in Turkey from the Turkish lira to the euro, which is the functional currency of its parent.The required remeasurement of our monetary assets and liabilities denominated in Turkish lira into euro did not have a material impact on our results of operations during the thirteen and thirty-nine weeks ended October 30, 2022. As of October 30, 2022, net monetary assets denominated in Turkish lira represented less than 1% of our total net assets.

SEASONALITY

Our business generally follows a seasonal pattern. Our wholesale businesses tend to generate higher levels of sales in the first and third quarters, while our retail businesses tend to generate higher levels of sales in the fourth quarter. Royalty, advertising and other revenue tends to be earned somewhat evenly throughout the year, although the third quarter tends to have the highest level of royalty revenue due to higher sales by licensees in advance of the holiday selling season. The COVID-19 pandemicand related supply chain and logistics disruptions ~~has~~have disrupted these patterns, however. We otherwise expect this seasonal pattern will generally continue. Working capital requirements vary throughout the year to support these seasonal patterns and business trends.

Due to the above seasonal factors, as well as the COVID-19 pandemic, including the ~~new variant, and~~ pandemic-related supply chain and logistics disruptions, our results of operations for the thirteen and thirty-nine weeks ended October ~~31, 2021~~30, 2022 are not necessarily indicative of those for a full fiscal year.

Thirteen Weeks Ended October ~~31, 2021~~30, 2022 Compared With Thirteen Weeks Ended ~~November 1, 2020~~October 31, 2021

Total Revenue

Total revenue in the third quarter of ~~2021~~2022 was ~~$2.333~~$2.281 billion as compared to ~~$2.118~~$2.333 billion in the third quarter of the prior year. The decrease in revenue of $52 million, or 2%, included (i) a 9% negative impact of foreign currency translation ~~on our revenue in the third quarter of 2021 on~~and (ii) a ~~consolidated basis and for each of our segments was immaterial. The increase in revenue of $214~~million, or 10%, which reflected a 4% negative impact due to an unplanned shift in the timing of wholesale shipments in the United States from the third quarter into the fourth quarter of 2021 as a result of worsening logistics disruptions in October 2021, and a 4%2% reduction resulting from the ~~impacts~~impact of the ~~Heritage Brands transaction that closed on~~war in Ukraine, including closures of our stores in Russia, the ~~first day~~cessation of ~~the third quarter of 2021~~wholesale shipments to Russia and ~~the exit from the Heritage Brands Retail business that was substantially completed~~Belarus, and a reduction in ~~the second quarter of 2021,~~wholesale shipments to Ukraine, and included the following:

•The ~~addition~~net reduction of an aggregate ~~$128~~$51 million of revenue, or a ~~12% increase~~4% decrease compared to the prior year period, attributable to our Tommy Hilfiger International and Tommy Hilfiger North America ~~segments.~~segments, which included a negative impact of $135 million, or 11%, related to foreign currency translation. Tommy Hilfiger International segment revenue ~~increased 11%~~decreased 10% (including a 14% negative foreign currency impact). Revenue in our Tommy Hilfiger North America segment increased ~~13%~~12%.

•The net addition of an aggregate ~~$171~~$5 million of revenue, or a ~~22%~~1% increase compared to the prior year period, attributable to our Calvin Klein International and Calvin Klein North America ~~segments.~~segments, which included a negative impact of $82 million, or 9%, related to foreign currency translation. Calvin Klein International segment revenue ~~increased 19%~~decreased 4% (including a 13% negative foreign currency impact). Revenue in our Calvin Klein North America segment increased ~~27%~~9%.

•The reduction of ~~an aggregate $85~~$6 million of revenue, or a ~~36%~~4% decrease compared to the prior year period, attributable to our Heritage Brands ~~Retail and Heritage Brands~~ Wholesale ~~segments, which included a 40% decline resulting from the Heritage Brands transaction and the exit from the Heritage Brands Retail business.~~segment.

Our revenue through our direct-to-consumer distribution channel in the third quarter of ~~2021 reflected~~2022 decreased 5%, including a ~~17% increase in revenue through our wholesale distribution channel, despite the 4%~~10% negative impact from an unplanned shift in the timing of wholesale shipments in the United States from the third quarter into the fourth quarter of 2021 mentioned above. Revenue through our direct-to-consumer distribution channel was flat, inclusive of a 5% reduction from the exit of the Heritage Brands Retail business.foreign currency impact. Sales through our directly operated digital commerce businesses ~~increased 21% as compared to the prior year period on top of exceptionally strong growth in 2020.~~decreased 10%, including an 11% negative foreign currency impact. Our sales through digital channels, including the digital businesses of our traditional and pure play wholesale customers and our directly operated digital commerce businesses, ~~as a percentage~~was approximately 20% of total revenue. Our revenue ~~was 21%.~~

through our wholesale distribution channel decreased 2% in the third quarter of 2022, inclusive of a 10% negative foreign currency impact.

Gross Profit

Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of product, such as inbound freight costs, purchasing and receiving costs, and inspection costs. Also included as cost of goods sold are the amounts recognized on foreign currency forward exchange contracts as the underlying inventory hedged by such forward exchange contracts is sold. Warehousing and distribution expenses are included in selling, general and administrative (“SG&A”) expenses. All of our royalty, advertising and other revenue is included in gross profit because there is no cost of goods sold associated with such revenue. As a result, our gross profit may not be comparable to that of other entities.

Gross profit in the third quarter of ~~2021~~2022 was ~~$1.345~~$1.274 billion, or ~~57.7%~~55.9% of total revenue, as compared to ~~$1.101 million,~~$1.345 billion, or ~~52.0%~~57.7% of total revenue, in the third quarter of the prior year. The ~~570~~180 basis point ~~increase~~decrease was primarily driven by (i) ~~more full price selling~~higher product, freight and other logistics costs as compared to the third quarter of the prior year, as a result of the inflationary pressures, (ii) increased promotional activity as compared to the ~~favorable~~third quarter of the prior year, due to elevated inventory levels industry-wide compared to consumer demand, and (iii) a negative impact of ~~the weaker United States dollar on our international businesses, particularly our European businesses, that purchase inventory in United States dollars, for which they generally enter into~~ foreign currency ~~forward exchange contracts 12 months in advance~~translation of the related inventory purchases, as the decreased local currency value of inventory results in lower cost of goods in local currency when the goods were sold, and (iii) the impact of the change in the revenue mix between our International and North America segments, as our International segments revenue was a larger proportion and generally carry higher gross margins.approximately 40 basis points. These ~~improvements~~decreases were partially offset by ~~higher freight costs~~price increases that were implemented in ~~the third quarter of 2021 than in the prior year period, including an increase of $22 million in air freight to mitigate supply chain~~certain regions and ~~logistics delays.~~for certain product categories during 2022.

SG&A Expenses

SG&A expenses in the third quarter of ~~2021~~2022 were ~~$1.097~~$1.085 billion, or ~~47.0%~~47.6% of total revenue, as compared to ~~$987 million,~~$1.097 billion, or ~~46.6%~~47.0% of total revenue, in the third quarter of the prior year. The 4060 basis point increase was ~~principally attributable~~ due in part to ~~(i) a reduction in 2021 of pandemic-related government payroll subsidy programs in international jurisdictions, as well as rent abatements, (ii)~~ costs incurred in connection with the ~~Heritage Brands transaction, consisting~~2022 cost savings initiative.

Goodwill Impairment

We recorded a pre-tax noncash goodwill impairment charge of ~~severance,and (iii) the impact of the change~~$417 million in the ~~revenue mix between~~third quarter of 2022 in conjunction with our ~~International~~annual goodwill and ~~North America segments, as our International segments revenue~~other indefinite-lived intangible asset impairment testing. The impairment was non-operational and driven by a ~~larger proportion and generally carry higher SG&A expenses~~significant increase in discount rates, as a ~~percentage~~result of ~~total revenue, partially offset by (iv) cost savings associated with reductions~~current economic conditions. Please see Note 7, “Goodwill and Other Intangible Assets,” in ~~our workforce, primarily~~the Notes to Consolidated Financial Statements included in ~~certain international markets, and to reduce our real estate footprintand (v) the leveraging~~Part I, Item 1 of ~~expenses driven by the increase in revenue.~~this report for further discussion.

Non-Service Related Pension and Postretirement Income

Non-service related pension and postretirement income in the third quarter of 2022 was $3 million as compared to $4 million in ~~each~~the third quarter of the ~~third quarters of 2021 and 2020.~~prior year. Please see Note 8, “Retirement and Benefit Plans,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Other ~~(Gain) Loss, Net~~Gain

We recorded a gain of $119 million during the third quarter of 2021 in connection with the Heritage Brands transaction. Please see Note 4, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Equity in Net Income of Unconsolidated Affiliates

The equity in net income of unconsolidated affiliates was $6$11 million ~~of income~~ in the third quarter of ~~2021~~2022 as compared to $4$6 million in the third quarter of the prior year. These amounts relate to our share of income ~~(loss)~~ from (i) our joint venture for the TOMMY HILFIGER, Calvin Klein, Warner’s, Olga, and certain licensed trademarks in Mexico, (ii) our joint venture for the TOMMY HILFIGER and Calvin Klein brands in India, (iii) our joint venture for the TOMMY HILFIGER brand in Brazil and (iv) our PVH Legwear LLC ~~(“PVH Legwear”)~~ joint venture for the TOMMY HILFIGER, Calvin Klein, IZOD, Van Heusen and Warner’s brands and other owned and licensed trademarks in the United States and Canada. The equity in net income for the third quarter of 2022 increased as compared to 2021 primarily due to an increase in income attributable to our joint venture in Mexico.Our investments in the joint ventures are being accounted for under the equity method of accounting.

Interest Expense, Net

Interest expense, net decreased to ~~$25~~$19 million in the third quarter of ~~2021~~2022 from ~~$34~~$25 million in the third quarter of the prior year, primarily due to ~~(i)~~ the impact of ~~$830 million~~$1.030 billion of voluntary long-term debt repayments made during the first nine months of 2021, (ii) a decrease in interest rates as compared to the prior year and (iii) the absence in 2021 of a $1 million expense recorded in the third quarter of 2020 resulting from the remeasurement of a mandatorily redeemable non-controlling interest that was recognized in connection with the Australia acquisition, as the measurement period ended in 2020.2021.

Income Taxes

The effective income tax rate for the third quarter of ~~2021~~2022 was ~~20.7%~~19.8% compared to ~~21.6%~~20.7% in the third quarter of the prior year. The effective income tax rate for the third quarter of 2022 reflected a $(46) million income tax benefit recorded on $(233) million of pre-tax losses. The effective income tax rate for the third quarter of 2021 reflected a $73 million income tax expense recorded on $353 million of pre-tax income. ~~The effective income tax rate for the third quarter of 2020 reflected a $19 million income tax expense recorded on $89 million of pre-tax income.~~

Our effective income tax ~~rate~~rates for the third ~~quarter~~quarters of 2022 and 2021 ~~was~~were relatively flat as compared to the United States statutory income tax rate.

Our effective income tax rate for the third quarter of 2020 was relatively flat as compared to the United States statutory income tax rate and reflected (i) the benefit of certain discrete items, including the favorable impact on certain liabilities for uncertain tax positions resulting from the expiration of applicable statutes of limitation, which resulted in a decrease to our effective income tax rate of 27.7%, offset by (ii) the impact of the $879 million of pre-tax goodwill impairment charges recorded during the first quarter of 2020, which were mostly non-deductible for tax purposes and factored into our annualized effective income tax rate, and resulted in a 6.3% increase to our effective income tax rate, (iii) the tax on foreign earnings in excess of a deemed return on tangible assets of foreign corporations (known as “GILTI”) and (iv) the mix of foreign and domestic pre-tax results.

~~Redeemable Non-Controlling Interest~~

We formed a joint venture in Ethiopia with Arvind Limited (“Arvind”) named PVH Manufacturing Private Limited Company (“PVH Ethiopia”) to operate a manufacturing facility that produces finished products for us for distribution primarily in the United States. We held an initial economic interest of 75% in PVH Ethiopia, with Arvind’s 25% interest accounted for as a redeemable non-controlling interest (“RNCI”). We consolidate the results of PVH Ethiopia in our consolidated financial statements. We, together with Arvind, amended, effective May 31, 2021, the capital structure of PVH Ethiopia and we now solely manage and effectively own all economic interests in the joint venture. Please see Note 5, “Redeemable Non-Controlling Interest,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

The net loss attributable to the RNCI in PVH Ethiopia was immaterial in the third quarter of 2020. As a result of the amendments to the capital structure of PVH Ethiopia, we no longer attribute any net income or loss in PVH Ethiopia to an RNCI. We closed the manufacturing facility subsequent to the end of the third quarter of 2021. The closure will not have a material impact on our consolidated financial statements.

Thirty-Nine Weeks Ended October 30, 2022 Compared With Thirty-Nine Weeks Ended October 31, 2021 ~~Compared With Thirty-Nine Weeks Ended November 1, 2020~~

Total Revenue

Total revenue in the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was ~~$6.725~~$6.536 billion as compared to ~~$5.043~~$6.725 billion in the thirty-nine week period of the prior year. ~~Virtually all~~The decrease in revenue of ~~our retail stores were temporarily closed for varying periods~~$189 million, or 3%, included (i) a 7% negative impact of ~~time throughout~~foreign currency translation, (ii) a 3% reduction resulting from the ~~first quarter~~Heritage Brands transaction and ~~into~~ the ~~second quarter of 2020 but had reopened in June 2020~~exit from the Heritage Brands Retail business and ~~were operating at significantly reduced capacity for~~(iii) a 1% reduction resulting from the ~~remainder~~impact of the ~~prior year period. Pandemic-related pressures on our retail stores continued during the thirty-nine weeks ended October 31, 2021, although to a lesser extent than~~war in ~~the prior year period, with a significant percentage~~Ukraine, including closures of our stores in ~~Europe, Canada~~Russia, the cessation of wholesale shipments to Russia and ~~Japan temporarily closed for varying periods of time throughout~~Belarus, and a reduction in wholesale shipments to Ukraine, and included the ~~first half of 2021 and the majority of our stores in Australia closed temporarily during the third quarter of 2021. The increase in revenue of $1.682 billion, or 33%, reflected:~~following:

•The ~~addition~~net reduction of an aggregate ~~$867~~$91 million of revenue, or a ~~34% increase~~3% decrease compared to the prior year period, attributable to our Tommy Hilfiger International and Tommy Hilfiger North America segments, which included a ~~positive~~negative impact of ~~$124~~$303 million, or 5%9%, related to foreign currency translation. Tommy Hilfiger International segment revenue ~~increased 37%~~decreased 7% (including a ~~6% positive~~12% negative foreign currency impact). Revenue in our Tommy Hilfiger North America segment increased ~~26% (including a 1% positive foreign currency impact)~~11%.

•The addition of an aggregate ~~$811~~$94 million of revenue, or a ~~44%~~4% increase compared to the prior year period, attributable to our Calvin Klein International and Calvin Klein North America segments, which included a ~~positive~~negative impact of ~~$87~~$182 million, or 5%7%, related to foreign currency translation. Calvin Klein International segment revenue ~~increased 45%~~was relatively flat (including a ~~7% positive~~10% negative foreign currency impact). Revenue in our Calvin Klein North America segment increased ~~41% (including a 1% positive foreign currency impact)~~10%.

•The ~~addition~~reduction of an aggregate $4$193 million of revenue, or a ~~1% increase~~30% decrease compared to the prior year period, attributable to our Heritage Brands Retail and Heritage Brands Wholesale segments, which ~~included~~includes a ~~19%~~30% decline resulting from ~~(i)~~ the Heritage Brands transaction ~~that closed on the first day of the third quarter of 2021, (ii)~~and the exit from the Heritage Brands Retail ~~business, which was substantially completed in the second quarter of 2021, and (iii) the April 2020 closing of the Speedo transaction.~~business.

Our revenue through our direct-to-consumer distribution channel in the thirty-nine weeks ended October ~~31, 2021 reflected~~30, 2022 decreased 3%, including an 8% negative foreign currency impact and a ~~44% increase~~3% reduction resulting from the exit of the Heritage Brands Retail business. Sales through our directly operated digital commerce businesses decreased 10%, including an 8% negative foreign currency impact, following exceptionally strong growth in 2021. Our sales through digital channels, including the digital businesses of our traditional and pure play wholesale customers and our directly operated digital commerce businesses was approximately 21% of total revenue. Our revenue through our wholesale distribution channel decreased 4% in the thirty-nine weeks ended October 30, 2022, inclusive of an 8% negative foreign currency impact and a ~~21% increase~~3% reduction resulting from the Heritage Brands transaction.

We currently expect total revenue for the fourth quarter and full year 2022 to decrease approximately 4% and 3%, respectively, compared to 2021, inclusive of a negative impact of approximately 8% and 7%, respectively, related to foreign currency translation. In addition, our fourth quarter and full year 2022 outlook includes a 2% reduction in revenue ~~through~~resulting from the impact of the war in Ukraine and our ~~direct-to-consumer distribution channel, which included~~full year 2022 outlook also includes a ~~23% increase~~2% reduction in ~~sales through~~revenue resulting from the Heritage Brands transaction and the exit from the Heritage Brands Retail business. Our revenue outlook reflects our ~~directly operated digital commerce businesses. Our~~current expectation with regard to the negative impacts that the challenges in the global macroeconomic environment and trends within the retail industry will have on our revenue in the fourth quarter of 2022, including as a result of lower consumer demand due to

inflationary pressures, as consumers reduce discretionary spend and certain wholesale customers take a more cautious approach, particularly in North America and to a lesser extent in Europe. We currently expect our sales through digital channels, including the digital businesses of our traditional and pure play wholesale customers and our directly operated digital commerce businesses, as a percentage of total revenue ~~was approximately 23%.~~

~~We currently expect that revenue for the fourth quarter of~~to remain consistent with 2021 ~~will continue~~at nearly 25%. There continues to be ~~impacted by~~significant uncertainty in the current macroeconomic environment due to the inflationary pressures globally, the war in Ukraine, the COVID-19 pandemic and ~~related supply chain and logistics disruptions. Supply chain and logistics disruptions have resulted in, and could continue to result in, delivery delays to~~foreign currency volatility. As such, our ~~wholesale customersand delayed inventory availability for our stores and~~ ~~digital commerce businesses. While our international businesses have exceeded and are expected to continue to exceed 2019 pre-pandemic~~ revenue ~~levels~~ in the fourth quarter of 2021, our North America businesses are expected to remain challenged, as international tourism, which is the source of a significant portion of regional revenue, is not expected to return to any significant level despite the recent lessening of travel restrictions to the United States from certain countries. We currently expect revenue growth through our digital channels will be less pronounced in the fourth quarter of 2021as compared to the first nine months of 2021, as traffic returns to our brick and mortar stores, which are expected to be substantially reopened, although our digital penetration as a percentage of total revenue is expected to remain consistent. We currently expect total revenue for the full year 2021 to increase 27% to 28% compared to 2020, inclusive of a positive impact of approximately 2% related to foreign currency translation, and expect revenue to increase 11% to 14% in the fourth quarter of 2021, inclusive of a negative impact of approximately 5% related to foreign currency translation. There continues to be uncertainty with respect to the impact of the pandemic, including the new variant, and pandemic-related supply chain and logistics disruptions on our business, and the businesses of our licensees and other business partners. As such, our revenue2022 may be subject to significant material change.

Gross Profit

Gross profit in the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was ~~$3.908~~$3.732 billion, or ~~58.1%~~57.1% of total revenue, as compared to ~~$2.651~~$3.908 billion, or ~~52.6%~~58.1% of total revenue, in the thirty-nine week period of the prior year. The ~~550~~100 basis point ~~gross margin increase~~decrease was primarily driven by (i) ~~more full price selling~~higher product, freight and other logistics costs as compared to the prior year period, as a result of the inflationary pressures and the supply chain and logistics disruptions, (ii) ~~the favorable~~increased promotional activity due to elevated inventory levels industry-wide compared to consumer demand, and (iii) a negative impact of ~~the weaker United States dollar on our international businesses, particularly our European businesses, that purchase inventory in United States dollars, for which they generally enter into~~ foreign currency ~~forward exchange contracts 12 months in advance~~translation of the related inventory purchases, as the decreased local currency value of inventory results in lower cost of goods in local currency when the goods were sold, and (iii) the impact of a change in the revenue mix between our International and North America segments, as our International segments revenue was a larger proportion and generally carry higher gross margins.approximately 30 basis points. These ~~improvements~~decreases were partially offset by ~~higher freight costs~~(i) price increases that were implemented in certain regions and for certain product categories during 2022 and (ii) the ~~nine months ended October 31, 2021 than~~impact of the reduction in revenue from our Heritage Brands businesses as a result of the ~~prior year period, including an increase of $22 million in air freight in~~Heritage Brands transaction and the ~~third quarter to mitigate supply chain and logistics delays.~~exit from the Heritage Brands Retail business, as the revenue from our Heritage Brands businesses carried lower gross margins.

We currently expect that gross margin for the fourth quarter of ~~2021~~2022 will bedecrease as compared to 2021 in line with the ~~second and~~gross margin decline in the third ~~quarters~~quarter of ~~2021 and will realize improvements as~~2022 compared to ~~2020,~~2021. The expected decrease is primarily due to (i) ~~more full price selling and a significant reduction in the level of~~increased promotional activity due to elevated inventory ~~liquidation as~~levels industry-wide compared to ~~2020,~~consumer demand and (ii) the ~~favorable impact~~higher product, freight and other logistics costs, including ocean freight, as a result of the weaker United States dollar on our international businesses, particularly our European businesses, that purchase inventory in United States dollars, for which they generally enter into foreign currency forward exchange contracts 12 months in advance of the related inventory purchases, as the decreased local currency value of inventory results in lower cost of goods in local currency when the goods are sold, and (iii) the impact of a change in the revenue mix between our International and North America segments as compared to the prior year as our International segments revenue has been, and is expected to continue to be, a larger proportion in 2021 than in 2020 and generally carry higher gross margins.inflationary pressures. These ~~improvements~~decreases are expected to be partially offset by ~~higher freight costs,~~

~~including an increase of approximately $20 million~~price increases that were implemented in ~~air freight, that we expect to incur in the fourth quarter of 2021~~2022 to mitigate ~~anticipated supply chain and logistics delays.~~the higher costs discussed above.

SG&A Expenses

SG&A expenses in the thirty-nine weeks ended October ~~31, 2021~~30, 2022 were ~~$3.199~~$3.195 billion, or ~~47.6%~~48.9% of total revenue, as compared to ~~$2.809~~$3.199 billion, or ~~55.7%~~47.6% of total revenue, in the thirty-nine week period of the prior year. The ~~significant~~130 basis point ~~decrease~~increase was principally attributable to (i) costs incurred in connection with the ~~leveraging~~exit from our Russia business, primarily consisting of ~~expenses driven by the increase in revenue. Also impacting the decrease were (i) cost savings resulting from the North America workforce reduction,~~noncash asset impairments, (ii) the ~~absence~~impact of the reduction in ~~2021 of accounts receivable losses recorded in the thirty-nine weeks ended November 1, 2020~~revenue from our Heritage Brands businesses as a result of the ~~COVID-19 pandemic,~~Heritage Brands transaction and the exit from our Heritage Brands Retail business, as the revenue from our Heritage Brands businesses carried lower SG&A expenses as a percentage of total revenue, and (iii) lower expenses in the first half of 2021 as stores in certain regions were closed and other stores were only beginning to re-open. These increases were partially offset by the absence in ~~2021~~2022 of ~~noncash store asset impairments recorded~~costs incurred in the thirty-nine week period of the prior year resulting from the impacts of the pandemic on our business. These decreases were partially offset by (i) a reduction in 2021 of pandemic-related government payroll subsidy programs in international jurisdictions, as well as rent abatements, (ii) the absence in 2021 of temporary cost savings initiatives implemented in April 2020 in response to the pandemic, including temporary furloughs, and salary and incentive compensation reductions, (iii) the net impact of one-time costs associated with (i) reductions in our workforce, primarily in certain international markets, and to reduce our real estate footprint ~~less~~and (ii) the ~~associated savings related to these actions and (iv) the impact of the change in the revenue mix between~~exit from our ~~International and North America segments, as our International segments revenue was a larger proportion and generally carry higher SG&A expenses as percentages of total revenue.~~Heritage Brands Retail business.

We currently expect that SG&A expenses as a percentage of revenue for the fourth quarter of ~~2021~~2022 will decrease approximately 150 basis points as compared to ~~2020,~~the fourth quarter of 2021 primarily as a result of (i) the ~~leveraging~~acceleration of ~~expenses driven by~~cost efficiencies across the increase in revenue. However, the increase in revenue we experienced in the first nine months of 2021was greater than the increase in revenue we expect for the fourth quarter of 2021, as virtually all of our retail stores were temporarily closed for varying periods of time throughout the first quarterbusiness and ~~into the second quarter of 2020, but had reopened in June 2020. As such, we currently expect the leveraging of~~(ii) higher marketing and other expenses ~~to be less pronounced~~ in the fourth quarter of 2021 ~~as compared to the first nine months of 2021. Also impacting the decrease in~~that coincided with when our stores had re-opened. We currently expect SG&A expenses as a percentage of revenue for the ~~fourth quarter of 2021 as~~full year 2022 will increase compared to ~~prior year are: (i)~~2021 reflecting the ~~absence~~impacts of the increase during the thirty-nine weeks ended October 30, 2022 for the reasons explained above, partially offset by the decrease expected in the fourth quarter of 2021 of noncash store asset impairments recorded in 2020 resulting from the continued negative impacts of the pandemic on our business and the impact of the shift in consumer buying trends from brick and mortar stores to digital channels, and (ii) the absence in the fourth quarter of 2021 of costs incurred in 2020 in connection with the exit from our Heritage Brands Retail business, as well as (iii) savings in 2021 associated with reductions in our workforce, primarily in certain international markets, and in our real estate footprint. These decreases are expected to be partially offset by (i) planned increases in marketing and other investments as compared to 2020 and the first nine months of 2021, which we planned in the second half of the year to coincide with when we expected our stores to be mostly opened, (ii) a reduction in 2021 of pandemic-related government payroll subsidy programs, as well as rent abatements, and (iii) the impact of the change in the revenue mix between our International and North America segments, as our International segments revenue is expected to be a larger proportion in the fourth quarter of 2021 than in 2020, and generally carry higher SG&A expenses as percentages of total revenue.2022.

Goodwill ~~and Other Intangible Asset Impairments~~Impairment

We recorded pre-tax noncash goodwill impairment charges of ~~$933~~$417 million ~~during~~in the thirty-nine weeks ended ~~November 1, 2020 resulting from the impacts of the COVID-19 pandemic on~~October 30, 2022 in conjunction with our ~~business, including $879 million related to goodwill and $54 million related to other intangible assets, primarily our~~ ~~ARROW~~ ~~and~~ ~~GeoffreyBeene~~ ~~tradenames. The impairments resulted from interim impairment assessments of our~~annual goodwill and other indefinite-lived intangible ~~assets, which we were required to perform~~asset impairment testing in the ~~first~~third quarter of ~~2020 due to the adverse impacts of the pandemic on our then current~~2022. The impairment was non-operational and ~~estimated future business results and cash flows, as well as the~~driven by a significant ~~decrease~~increase in ~~our market capitalization~~discount rates, as a result of ~~a sustained decline in our common stock price. We have not recorded any further impairments of goodwill and other intangible assets since the first quarter of 2020.~~current economic conditions. Please see Note 7, “Goodwill and Other Intangible Assets,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Non-Service Related Pension and Postretirement Income

Non-service related pension and postretirement income was ~~$11~~$10 million in the thirty-nine weeks ended October ~~31, 2021~~30, 2022 as compared to $8$11 million in the thirty-nine week period of the prior year.

Non-service related pension and postretirement income (cost)recorded throughout the year is calculated using actuarial valuations that incorporate assumptions and estimates about financial market, economic and demographic conditions. Differences between estimated and actual results give rise to gains and losses that are recorded immediately in earnings,

generally in the fourth quarter of the year, which can create volatility in our results of operations. We currently expect that non-service related pension and postretirement income for the full year ~~2021~~2022 will be approximately ~~$16~~$14 million. However, our expectation of ~~2021~~ non-service related pension and post-retirement income for the full year 2022 does not include the impact of an actuarial gain or ~~loss~~.loss. As a result of the recentvolatility in the financial markets, ~~due, in part, to the impact of the COVID-19 pandemic, including the new variant,~~ there is significant uncertainty with respect to the actuarial gain or loss we may record on our retirement plans in ~~2021.~~2022. We may incur a significant actuarial gain or loss in ~~2021~~2022 if there is a significant increase or decrease in discount rates, respectively, or if there is a difference in the actual and expected return on plan assets.As such, our actual ~~2021~~2022 non-service related pension and postretirement income may be significantly different than our projections. Non-service related pension and postretirement income was ~~$76~~$64 million in ~~2020,~~2021, and included a ~~$65~~$49 million actuarial gain on our retirement plans recorded in the fourth quarter.

Other ~~(Gain) Loss, Net~~Gain

We recorded a gain of $119 million during the thirty-nine weeks ended October 31, 2021 in connection with the Heritage Brands transaction.

~~We recorded a noncash net loss of $3 million during the thirty-nine weeks ended November 1, 2020 in connection with the Speedo transaction.~~

Please see Note 4, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further ~~discussion of these transactions.~~discussion.

Equity in Net Income ~~(Loss)~~ of Unconsolidated Affiliates

The equity in net income ~~(loss)~~ of unconsolidated affiliates was ~~$14~~$43 million ~~of income~~ in the thirty-nine weeks ended October ~~31, 2021~~30, 2022 as compared to ~~a loss of $(10)~~$14 million in the thirty-nine week period of the prior year. These amounts relate to our share of income (loss) from (i) our joint venture for the TOMMY HILFIGER, Calvin Klein, Warner’s, Olga, and certain licensed trademarks in Mexico, (ii) our joint venture for the TOMMY HILFIGER and Calvin Klein brands in India, (iii) our joint venture for the TOMMY HILFIGER brand in Brazil, ~~and~~ (iv) our PVH Legwear LLC joint venture for the TOMMY HILFIGER, Calvin Klein, IZOD, Van Heusen and Warner’s brands and other owned and licensed trademarks in the United States and ~~Canada. The thirty-nine weeks ended November 1, 2020 also included a $12 million pre-tax noncash impairment of~~Canada, and (v) our investment in Karl Lagerfeld ~~Holding B.V. (“~~after we resumed the equity method of accounting for our investment in the fourth quarter of 2021 and until the closing of the Karl ~~Lagerfeld”).~~Lagerfeld transaction on May 31, 2022. The equity in net income for the thirty-nine weeks ended October 30, 2022 increased as compared to the prior year period primarily due to a $16 million pre-tax gain recorded in the second quarter of 2022 in connection with the Karl Lagerfeld transaction, as well as an increase in income attributable to our joint ventures in MexicoandIndia. Our investments in the joint ventures are being accounted for under the equity method of accounting. Please see Note 6, “Investments in Unconsolidated Affiliates,” in the Notes to ~~the~~ Consolidated Financial Statements included in Part I, Item I1 of this report for further discussion of ~~our investment in Karl Lagerfeld. The equity in net income (loss) for~~ the ~~thirty-nine weeks ended October 31, 2021 increased as compared to the prior year period due, in part, to the absence in 2021 of the $12 million pre-tax noncash impairment of our investment in~~ Karl Lagerfeld recorded in 2020. In addition, the equity in net income (loss) for the current year period reflects an increase in income on our continuing investments compared to the prior year as the prior year period was negatively impacted by the effects of the COVID-19 pandemic on our unconsolidated affiliates’ businesses.transaction. Our investments in the joint ventures are being accounted for under the equity method of accounting.

~~The~~We currently expect that our equity in net income ~~(loss)~~ of unconsolidated affiliates for the full year ~~2021 is currently expected~~2022 will increase to be approximately ~~$18~~$50 million ~~of income~~ as compared to ~~a loss of $(5)~~$24 million in ~~the prior year period,~~2021 primarily ~~due to the absence in 2021~~as a result of the ~~$12~~$16 million pre-tax ~~noncash impairment of our investment in Karl Lagerfeld~~gain that we recorded in the ~~first~~second quarter of ~~2020,~~2022 in connection with the Karl Lagerfeld transaction, as well as an increase in ~~the~~ income onattributable to our ~~continuing investments.~~ joint ventures in India and Mexico.We expect the income on our continuing investments to ~~be relatively flat~~slightly decrease in the fourth quarter of ~~2021~~2022 as compared to the prior year period.

Interest Expense, Net

Interest expense, net decreased to ~~$80~~$61 million in the thirty-nine weeks ended October ~~31, 2021~~30, 2022 from ~~$87~~$80 million in the thirty-nine week period of the prior year, primarily due to ~~(i)~~ the ~~net~~ impact of ~~$830 million~~$1.030 billion of voluntary long-term debt repayments made during the first nine months of 2021 and the issuances in April 2020 of an additional €175 million principal amount of 3 5/8% senior unsecured notes due 2024 and in July 2020 of $500 million principal amount of 4 5/8% senior unsecured notes due 2025, and (ii) a decrease in interest rates as compared to the prior year.2021.

Interest expense, net for the fourth quarter ~~and~~2022 is currently expected to be relatively flat compared to $24 million in 2021. Interest expense, net for the full year ~~2021~~2022 is currently expected to be approximately ~~$25~~$85 million, ~~and approximately $105 million, respectively, a decrease~~ compared to ~~$34~~$104 million ~~and $121 million, respectively,~~ in ~~2020.~~2021. The decrease is primarily due to (i) the impact of the $830 million of voluntary long-term repayments made during the first nine months of 2021, (ii) a decrease in interest rates as compared to the prior year and (iii) the absence in 2021 of a $3 million and

$5 million expense recorded in the fourth quarter and full year 2020, respectively, resulting from the remeasurement of a mandatorily redeemable non-controlling interest that was recognized in connection with the Australia acquisition, as the measurement period ended in 2020, partially offset by (iv) the full year impact in ~~2021~~2022 of ~~the issuance of senior unsecured notes in April 2020 and July 2020.~~long-term debt repayments made during 2021.

Income Taxes

The effective income tax rate for the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was ~~27.4%~~45.1% compared to ~~8.9%~~27.4% in the thirty-nine week period of the prior year. The effective income tax rate for the thirty-nine weeks ended October 30, 2022 reflected a $51 million income tax expense recorded on $112 million of pre-tax income. The effective income tax rate for the thirty-nine weeks ended October 31, 2021 reflected a $212 million income tax expense recorded on $773 million of pre-tax income. ~~The~~

Our effective income tax rate for the thirty-nine weeks ended ~~November 1, 2020 reflected a $(105) million~~October 30, 2022 was higher than the United States statutory income tax rate primarily due to (i) the impact of the $417 million noncash goodwill impairment charge recorded during the third quarter of 2022, which has resulted in a pre-tax loss with no tax benefit ~~recorded~~and was factored into our annualized effective tax rate, and (ii) the mix of foreign and domestic pre-tax results, partially offset by (iii) the favorable impact on ~~$(1.185) billion~~certain liabilities for uncertain tax positions resulting from the expiration of ~~pre-tax losses.~~applicable statutes of limitation and the settlement of a multi-year audit from an international jurisdiction.

Our effective income tax rate for the thirty-nine weeks ended October 31, 2021 was higher than the United States statutory income tax rate primarily due to the tax ~~effects~~on foreign earnings in excess of ~~GILTI~~a deemed return on tangible assets of foreign corporations (known as “GILTI”) and the mix of foreign and domestic pre-tax results.

Our effective income tax benefit rate for the thirty-nine weeks ended November 1, 2020 was lower than the United States statutory income tax rate primarily due to (i) the impact of the $879 million of pre-tax goodwill impairment charges recorded during the first quarter of 2020, which were mostly non-deductible and factored into our annualized effective income tax rate, and resulted in a 13.3% decrease in our effective income tax rate, (ii) the tax effects of GILTI and (iii) the mix of foreign and domestic pre-tax results, partially offset by (iv) the benefit of certain discrete items, including the favorable impact on certain liabilities for uncertain tax positions resulting from the expiration of applicable statutes of limitation, which resulted in an increase to our effective income tax rate of 2.0%.

We file income tax returns in more than 40 international jurisdictions each year. A substantial amount of our earnings are in international jurisdictions, particularly in the Netherlands and Hong Kong SAR, where the income tax rates, when coupled with special rates levied on income from certain of our jurisdictional activities, ~~are~~have historically been lower than the United States statutory income tax rate. In 2022, we no longer benefit from these special rates.

We currently expect that our effective income tax ~~rate~~rates for the fourth quarter of ~~2021~~2022 and full year 2022 will be ~~in a range of (190)% to (230)%. We currently expect that our effective income tax rate for the full year 2021 will be in a range of 7.5% to 8.5%.~~approximately 80% and approximately 64%, respectively. Our expectation that our effective income tax rates for the fourth quarter and full year ~~2021~~2022 will be ~~lower~~higher than the United States statutory income tax rate is principally due to the impact of (i) the $417 million noncash impairment of goodwill recorded during the third quarter of 2022 discussed above and (ii) the mix of foreign and domestic pre-tax results, partially offset by (iii) the overall benefit of certain discrete items, including (i) an estimated benefit resulting from a tax accounting method change made in conjunction with our 2020 United States federal income tax return that provides additional tax benefits in our foreign tax provision and (ii) the favorable impact on certain liabilities for uncertain tax positions. There continues to be uncertainty with respect to the impact of the pandemic, including the new variant, on our business and results of operations, which could affect our current expectation of our effective income tax rates for the fourth quarter and full year 2021.

Our tax rate is affected by many factors, including the mix of international and domestic pre-tax earnings, discrete events arising from specific transactions and new regulations, as well as audits by tax authorities and the receipt of new information, any of which can cause us to change our estimate for uncertain tax positions.

~~RNCI~~On August 16, 2022, the U.S. government enacted the Inflation Reduction Act, with tax provisions primarily focused on implementing a 15% corporate minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases. The corporate minimum tax will be effective in fiscal 2023 and the excise tax is effective January 1, 2023. Based on our current analysis, we do not expect the new law to have a material impact on our consolidated financial statements.

~~The net loss attributable~~Redeemable Non-Controlling Interest

We formed a joint venture in Ethiopia (“PVH Ethiopia”) to ~~the RNCI was immaterial~~operate a manufacturing facility that produced finished products for us for distribution primarily in the ~~thirty-nine weeks ended October 31, 2021 and November 1, 2020.~~United States. We ~~together~~held an initial economic interest of 75% in PVH Ethiopia, with ~~Arvind,~~our partner’s 25% interest accounted for as a redeemable non-controlling interest (“RNCI”). We consolidated the results of PVH Ethiopia in our consolidated financial statements. The capital structure of PVH Ethiopia was amended effective May 31, 2021 ~~the capital structure of PVH Ethiopia~~ and we ~~now~~ solely ~~manage~~managed and effectively ~~own~~owned all economic interests in the joint venture. As a result of the amendments to the capital structure of PVH Ethiopia, we ~~no longer attribute~~stopped attributing any net income or loss in PVH Ethiopia to an RNCI beginning May 31, 2021. The net loss attributable to the RNCI was immaterial in ~~future reporting periods.~~ the period prior to May 31, 2021. We closed in the fourth quarter of 2021 the manufacturing facility that was PVH Ethiopia’s sole operation. The closure did not have a material impact on our consolidated financial statements.

Please see Note 5, “Redeemable Non-Controlling Interest,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

LIQUIDITY AND CAPITAL RESOURCES

~~Liquidity Update~~

The COVID-19 pandemic had a significant impact on our business, results of operations, financial condition and cash flows in 2020. Given the unprecedented effects of the pandemic on our business, we took certain actions to improve our financial position in 2020, including the issuance in April 2020 of an additional €175 million principal amount of 3 5/8% senior unsecured notes due 2024 and in July 2020 of $500 million principal amount of 4 5/8% senior unsecured notes due 2025, as well as focused management of our working capital, with particular focus on our inventory levels, among others. We ended 2020 with $1.7 billion of cash on hand, which ~~allowed us to make $830 million of voluntary long-term debt repayments during the~~ ~~thirty-nine weeks ended October 31, 2021, exceeding~~ ~~the incremental amount we borrowed during 2020. We currently expect to make additional~~ ~~voluntary long-term debt repayments of approximately $200 million~~ ~~in the fourth quarter of 2021~~ ~~to repay the outstanding principal balance under our~~ ~~United States dollar-denominated Term Loan A facility.~~

We had also obtained a waiver in June 2020 of the leverage and interest coverage ratios under our senior unsecured credit facilities (referred to as the “June 2020 Amendment”). During the relief period (as defined in the June 2020 Amendment), the applicable margin for these facilities was increased 0.25% and we were not permitted to declare or pay dividends on our common stock or make share repurchases under our stock repurchase program, among other things. However, effective June 10, 2021, we terminated early this relief period and we now are permitted to resume share repurchases and payment of dividends on our common stock at the discretion of the Board of Directors (as discussed below in the section entitled “2019 Senior Unsecured Credit Facilities”). We resumed share repurchases and reinstated dividends on our common stock during the third quarter of 2021. Please see the sections entitled “Acquisition of Treasury Shares” and “Dividends” below for further discussion.

~~We ended the third quarter of 2021 with $1.3 billion of cash on hand and approximately $1.5 billion of borrowing capacity available under our various debt facilities.~~

Cash Flow Summary and Trends

Cash and cash equivalents at October ~~31, 2021~~30, 2022 was ~~$1.299 billion,~~$457 million, a decrease of ~~$353~~$785 million from the ~~$1.651~~$1.242 billion at January ~~31, 2021.~~30, 2022. The change in cash and cash equivalents included the impact of (i) ~~$830 million of voluntary long-term debt repayments, (ii) $216 million of net proceeds in connection with the closing of the Heritage transaction in the third quarter of 2021, and (iii) $144~~$330 million of completed common stock repurchases under the stock repurchase ~~program.~~program, (ii) $23 million of mandatory long-term debt repayments and (iii) $19 million of cash proceeds received in connection with the Karl Lagerfeld transaction (the remaining $1 million of proceeds is being held in escrow as of October 30, 2022). We ended the third quarter of 2022 with approximately $1.0 billion of borrowing capacity available under our various debt facilities. The seasonality of our business results in significant fluctuations in our cash balance between fiscal year end and subsequent interim periods due, in part, to the timing of inventory ~~purchases.~~purchases and peak sales periods.

Cash flow for the full year ~~2021~~2022 will be impacted by various factors in addition to those noted ~~above and~~ below in this “Liquidity and Capital Resources” section, including (i) ~~approximately $1.030 billion of expected voluntary~~mandatory long-term debt repayments ~~including the $830~~of approximately $32 million, ~~of voluntary repayments made during the thirty-nine weeks ended October 31, 2021,~~subject to exchange rate fluctuations, and (ii) expected common stock repurchases under the stock repurchase program of approximately $350 million, including the $144 million of common stock repurchases completed during the thirty-nine weeks ended October 31, 2021, and (iii) the $216 million of net proceeds in connection with the closing of the Heritage transaction in the third quarter of 2021.$400 million. There continues to be uncertainty with respect to the impacts of the COVID-19 pandemic ~~including the new variant,~~ and ~~pandemic-related supply chain and logistics disruptions.~~inflationary pressures globally. Our cash flows for the remainder of 2022 may be subject to material significant change, including as a result of ~~increased in-transit~~elevated inventory levels ~~or significant production delays and other working capital changes~~ that we may experience due to lower consumer demand for our products as a result of ~~the pandemic and related supply chain and logistics disruptions.~~inflationary pressures.

As of October ~~31, 2021, $953~~30, 2022, $364 million of cash and cash equivalents was held by international subsidiaries. Our intent is to reinvest indefinitely substantially all of our earnings in foreign subsidiaries outside of the United States. However, if management decides at a later date to repatriate these earnings to the United States, we may be required to accrue and pay additional taxes, including any applicable foreign withholding tax and United States state income taxes. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

Operations

Cash ~~provided~~used by operating activities was ~~$583~~$276 million in the thirty-nine weeks ended October ~~31, 2021~~30, 2022 compared to ~~$427~~$583 million of cash provided by operating activities in the thirty-nine weeks ended ~~November 1, 2020.~~October 31, 2021. The ~~increase~~decrease in cash provided by operating activities as compared to the prior year period was primarily driven by ~~a significant increase in net income (loss) as adjusted for noncash charges, partially offset by~~(i) changes in our working capital, ~~including (i) an increase in trade receivables,~~ primarily ~~driven by a significant increase in our wholesale revenue, (ii)~~ an increase in inventories ~~during the current period, primarily~~ due to ~~the planned increase~~a combination of (a) abnormally low inventory levels in ~~revenue in the fourth quarter of 2021, and (iii) a decrease in accounts payable, primarily due to the temporary extension of vendor payment terms~~all regions in the prior year ~~period.~~period, (b) a planned increase in our core product to mitigate supply chain and logistics disruptions and (c) elevated inventory levels in our North America wholesale business due to lower than expected demand and (ii) a decrease in net income as adjusted for noncash charges. Our cash flows from operations ~~in the thirty-nine weeks ended November 1, 2020 were significantly~~have been impacted by ~~widespread~~supply chain and logistics disruptions on our business, and have been and are expected to continue to be impacted by temporary store closures and other ~~significant adverse~~ impacts of the COVID-19 pandemic on our ~~business.~~business, as well as lower consumer demand as a result of inflationary pressures, particularly in North America and to a lesser extent in Europe. In an effort to mitigate ~~the~~these impacts, ~~of the pandemic,~~ we have been and continue to be focused on working capital management. For the thirty-nine weeks ended November 1, 2020, we were particularly focused on tightly managing inventories, which included reducing and cancelling inventory commitments, increasing promotional selling, redeploying basic inventory items to subsequent seasons and consolidating future seasonal collections.

Supply Chain Finance Program

We have a voluntary supply chain finance program (the “SCF program”) that provides our inventory suppliers with the opportunity to sell their receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. The SCF program is administered through third party platforms that allow participating suppliers to track payments from us and sell their receivables due from us to financial institutions. We are not a party to the agreements between the suppliers and the financial institutions and have no economic interest in a supplier’s decision to sell a receivable. Our payment obligations, including the amounts due and payment terms, are not impacted by suppliers’ participation in the SCF program.

Accordingly, amounts due to suppliers that elected to participate in the SCF program are included in accounts payable in our consolidated balance sheets and the corresponding payments are reflected in cash flows from operating activities in our consolidated statements of cash flows. We have been informed by the third party administrators of the SCF program that suppliers had elected to sell approximately $575 million, $475 million and $435 million of our payment obligations that were outstanding as of October 30, 2022, January 30, 2022 and October 31, 2021, respectively, to financial institutions and approximately $1.6 billion and $1.2 billion had been settled through the program during the thirty-nine weeks ended October ~~31, 2021.~~

~~Capital Expenditures~~

~~Our capital expenditures in the thirty-nine weeks ended~~30, 2022 and October 31, 2021, were $171 million compared to $159 million in the thirty-nine weeks ended November 1, 2020. We currently expect that capital expenditures for the full year 2021 will be approximately $300 million as compared to $227 million in 2020 and will include continued investments in (i) platforms and systems worldwide, including our digital commerce platforms, and (ii) enhancements to our warehouse and distribution network.respectively.

Investments in Unconsolidated Affiliates

We received dividends of $16 million and $19 million from our investments in unconsolidated affiliates during the thirty-nine weeks ended October 30, 2022 and October 31, ~~2021.~~2021, respectively. These dividends are included in our net cash (used) provided by operating activities in our Consolidated ~~Statement~~Statements of Cash Flows for the respective period.

Karl Lagerfeld Transaction

We ~~made~~entered into a ~~payment~~definitive agreement on April 29, 2022 to sell our approximately 8% economic interest in Karl Lagerfeld to a subsidiary of $2 million to our PVH Legwear joint venture during the thirty-nine weeks ended November 1, 2020 to contribute our share of the joint venture funding. This payment is included in our net cash provided by investing activities in our Consolidated Statement of Cash Flows for the period.

~~Speedo Transaction~~

WeG-III and completed the sale on May 31, 2022 for $20 million in cash, subject to customary adjustments, of ~~our Speedo North America business~~which $19 million was received in the second quarter of 2022 and the remaining $1 million is being held in escrow and is subject to ~~Pentland in April 2020 for net proceeds of $169 million.~~exchange rate fluctuation. Please see Note ~~4, “Acquisitions and Divestitures,~~6, “Investments in Unconsolidated Affiliates,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Heritage Brands Transaction

We completed the sale of certain of our heritage brands trademarks, including Van Heusen, IZOD, ARROW and Geoffrey Beene, as well as certain related inventories of our Heritage Brands business, to ABG and other parties on August 2, 2021 for net proceeds of $216 million, of which $223 million of gross proceeds were presented as investing cash flows and $7 million of transaction costs were presented as operating cash flows in the Consolidated Statement of Cash Flows for the thirty-nine weeks ended October 31, 2021. Please see Note 4, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Capital Expenditures

Our capital expenditures in the thirty-nine weeks ended October 30, 2022 were $195 million compared to $171 million in the thirty-nine weeks ended October 31, 2021. We currently expect that capital expenditures for the full year 2022 will be approximately $300 million as compared to $268 million in 2021 and will primarily consist of investments in (i) new stores and store renovations, (ii) investments in our information technology infrastructure worldwide, including data centers and information security, (iii) continued investments in upgrades and enhancements to platforms and systems worldwide, including our digital commerce platforms, and (iv) enhancements to our warehouse and distribution network in Europe and North America.

Mandatorily Redeemable Non-Controlling Interest

We completed the acquisition of the approximately 78% interest in Gazal Corporation Limited (“Gazal”) that we did not already own (the “Australia acquisition”) in 2019. The Australia acquisition agreement provided for key executives of Gazal and PVH Brands Australia Pty. Limited to exchange a portion of their interests in Gazal for approximately 6% of the outstanding shares of our previously wholly owned subsidiary that acquired 100% of the ownership interests in the Australia business. We were obligated to purchase this 6% interest within two years of the acquisition closing in two tranches. The purchase price for the tranche 1 and tranche 2 shares was based on a multiple of the subsidiary’s adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) less net debt as of the end of the applicable measurement year, and the multiple varied depending on the level of EBITDA compared to a target.

We purchased tranche 1 (50% of the shares) for $17 million in June 2020 and tranche 2 (the remaining 50% of the shares) for $24 million in June 2021 based on exchange rates in effect on the applicable payment dates. WeThe tranche 2 payments are presented ~~these payments within~~in the Consolidated ~~Statements~~Statement of Cash Flows for the thirty-nine weeks ended October 31, 2021 as follows: (i) ~~$13 million and~~ $15 million as financing cash flows, ~~for the thirty-nine weeks ended November 1, 2020 and October 31, 2021, respectively,~~ which represented the initial fair ~~values~~value of the ~~liabilities for the tranche 1 and tranche 2 shares, respectively,~~liability recognized on the acquisition date, and (ii) ~~$5 million and~~ $9 million as operating cash flows ~~for the thirty-nine weeks ended November 1, 2020 and October 31, 2021, respectively, for the tranche 1 and tranche 2 shares, respectively,~~ attributable to interest. Please see Note 4, “Acquisitions and Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Dividends

We suspended our dividends ~~following the $3 million payment of a $0.0375 per share dividend on our common stock on~~in March ~~31,~~ 2020 in response to the impacts of the COVID-19 pandemic on our business. In addition, under the terms of ~~the~~a waiver we obtained in June 2020 ~~Amendment,~~of certain covenants under our senior unsecured credit facilities (referred to as the “June 2020 Amendment”), we were not permitted to declare or pay dividends during the relief ~~period (as defined below).~~period. However, effective June 10, 2021, the relief period under the June 2020 Amendment was terminated and we ~~now are~~were permitted to declare and pay dividends on our common stock at the discretion of the Board of Directors. Please see Note 8, “Debt,” in the ~~section entitled “2019 Senior Unsecured Credit Facilities” below~~Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the year ended January 30, 2022 for further ~~discussion.~~discussion of the terms of the June 2020 Amendment and the relief period.

~~We declared a $0.0375 per share dividend~~

Cash dividends paid on our common stock intotaled $8 million during the ~~third quarter~~thirty-nine weeks ended October 30, 2022. We did not pay any cash dividends on our common stock during the thirty-nine weeks ended October 31, 2021, following termination of ~~2021 to be paid in~~ the ~~fourth quarter of 2021.~~ relief period.

We currently project that cash dividends paid on our common stock in ~~the fourth quarter of 2021~~2022 will be approximately $3$10 million based on our current dividend rate, the number of shares of our common stock outstanding as of October ~~31, 2021,~~30, 2022, our estimate of stock to be issued during ~~the full year 2021~~2022 under our stock incentive plans and our estimate of stock repurchases for the remainder of ~~2021.~~2022.

Acquisition of Treasury Shares

The Board of Directors has authorized over time since 2015 an aggregate ~~$2.0~~$3.0 billion stock repurchase program through June 3, ~~2023.~~2026. Repurchases under the program may be made from time to time over the period through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as we deem appropriate. Purchases are made based on a variety of factors, such as price, corporate requirements and overall market conditions, applicable legal requirements and limitations, trading restrictions under our insider trading policy and other relevant factors. The program may be modified by the Board of Directors, including to increase or decrease the repurchase limitation or extend, suspend, or terminate the program, at any time, without prior notice.

We suspended share repurchases under the stock repurchase program beginning in March 2020 ~~following the purchase of 1.4 million shares in open market transactions for $111 million completed earlier in the first quarter of 2020,~~ in response to the impacts of the COVID-19 pandemic on our business. ~~Purchases of $500,000 that were accrued for in our Consolidated Balance Sheet as of February 2, 2020 were also paid in the first quarter of 2020.~~ In addition, under the terms of the June 2020 Amendment, we were not permitted to make share repurchases during the relief ~~period (as defined below).~~period. However, effective

June 10, 2021, the relief period was terminated and we ~~now are~~were permitted to resume share repurchases at management’s ~~discretion.~~discretion, which we did starting in the third quarter of 2021. Please see Note 8, “Debt,” in the ~~section entitled “2019 Senior Unsecured Credit Facilities” below~~Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the year ended January 30, 2022 for further ~~discussion.~~discussion of the terms of the June 2020 Amendment and the relief period.

During the ~~thirteen~~thirty-nine weeks ended October 31, 2021, following the termination of the relief period in June 2021, we purchased 1.4 million shares of our common stock under the program in open market transactions for $149 million. During the thirty-nine weeks ended October 30, 2022, we purchased 5.1 million shares of our common stock under the program in open market transactions for $326 million. Purchases of $4$2 million were accrued for in our Consolidated Balance Sheet as of October ~~31, 2021.~~30, 2022. Purchases of $6 million that were accrued for in our Consolidated Balance Sheet as of January 30, 2022 were paid in the first quarter of 2022. As of October ~~31, 2021,~~30, 2022, the repurchased shares were held as treasury stock and ~~$424~~$897 million of the authorization remained available for future share repurchases.

We currently expect common stock repurchases under the stock repurchase program of approximately ~~$350~~$400 million for the full year ~~2021.~~2022.

Treasury stock activity also includes shares that were withheld principally in conjunction with the settlement of restricted stock units to satisfy tax withholding requirements.

Financing Arrangements

Our capital structure was as follows:


(In millions)	(In millions)	10/31/21		1/31/21		11/1/20		(In millions)	10/30/22		1/30/22		10/31/21
Short-term borrowings	Short-term borrowings	$	28	$	—	$	21	Short-term borrowings	$	98	$	11	$	28

Current portion of long-term debt	Current portion of long-term debt	33		41		23		Current portion of long-term debt	37		35		33
Finance lease obligations	Finance lease obligations	13		13		15		Finance lease obligations	10		9		13
Long-term debt	Long-term debt	2,605		3,514		3,464		Long-term debt	2,109		2,318		2,605
Stockholders’ equity	Stockholders’ equity	5,172		4,730		4,676		Stockholders’ equity	4,823		5,289		5,172

In addition, we had ~~$1.299 billion, $1.651~~$457 million, $1.242 billion and ~~$1.460~~$1.299 billion of cash and cash equivalents as of October 30, 2022, January 30, 2022 and October 31, 2021, ~~January 31, 2021 and November 1, 2020,~~ respectively.

Short-Term Borrowings

We had ~~$28~~$18 million of borrowings outstanding under short-term lines of credit, overdraft facilities and short-term revolving credit facilities denominated in various foreign currencies as of October ~~31, 2021.~~30, 2022. The weighted average interest rate on funds borrowed as of October ~~31, 2021~~30, 2022 was ~~0.31%~~0.17%. These facilities provided for borrowings of up to ~~$213~~$183 million based on exchange

rates in effect on October ~~31, 2021~~30, 2022 and are utilized primarily to fund working capital needs. The maximum amount of borrowings outstanding under these facilities during the thirty-nine weeks ended October ~~31, 2021~~30, 2022 was ~~$41~~$22 million.

Commercial Paper

We have the ability to issue, from time to time, unsecured commercial paper notes with maturities that vary but do not exceed 397 days from the date of issuance primarily to fund working capital needs. We had $80 million of borrowings outstanding under the commercial paper note program as of October 30, 2022. The weighted average interest rate on funds borrowed under the program as of October 30, 2022 was 4.05%. The maximum amount of borrowings temporarily outstanding under the program during the thirty-nine weeks ended October 30, 2022 was $130 million.

2021 Unsecured Revolving Credit Facility

On April 28, 2021, we replaced our 364-day $275 million United States dollar-denominated unsecured revolving credit facility, which matured on April 7, 2021, ~~(the “2020 facility”),~~ with a ~~new~~ 364-day $275 million United States dollar-denominated unsecured revolving credit facility (the “2021 facility”). The 2021 facility ~~will mature~~matured on April 27, ~~2022.~~2022, and was not replaced. We paid approximately $800,000 of debt issuance costs in connection with the ~~transaction.~~2021 facility. We had no borrowings outstanding under ~~these facilities during the thirty-nine weeks ended October 31, 2021.~~

~~The borrowings under~~ the 2021 facility ~~bear interest at variable rates calculated in a manner consistent with the 2020 facility. The current applicable margin with respect~~during 2022 prior to the borrowings as of October 31, 2021 was 1.375% for adjusted Eurocurrency rate loans and 0.375% for base rate loans. The applicable margin for borrowings is subject to adjustment (i) after the date of delivery of the compliance certificate and financial statements, with respect to each of our fiscal quarters, based upon our net leverage ratio or (ii) after the date of delivery of notice of a change in our public debt rating by Standard & Poor’s or Moody’s.its maturity on April 27, 2022.

The 2021 facility is subject to other terms and conditions and financial and non-financial covenants consistent with the 2020 facility. Please see Note 8, “Debt,” in the Notes to the Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the year ended January 31, 2021 for further discussion of the 2020 facility.

Finance Lease Liabilities

Our cash payments for finance lease liabilities totaled $3 million and $4 million ~~in each of~~during the thirty-nine weeks ended October 30, 2022 and October 31, 2021, ~~and November 1, 2020.~~respectively.

2019 Senior Unsecured Credit Facilities

We have senior unsecured credit facilities due April 29, 2024 (as amended, the “2019 facilities”) that consist of a ~~$1.093 billion United States dollar-denominated Term Loan A facility (the “USD TLA facility”), a~~ €500 million euro-denominated Term Loan A facility (the “Euro TLA facility” ~~and together with the USD TLA facility, the “TLA facilities”~~) and senior unsecured revolving credit facilities consisting of (i) a $675 million United States dollar-denominated revolving credit facility, (ii) a CAD $70 million Canadian dollar-denominated revolving credit facility available in United States dollars or Canadian dollars, (iii) a €200 million euro-denominated revolving credit facility available in euro, Australian dollars and other agreed foreign currencies and (iv) a $50 million United States dollar-denominated revolving credit facility available in United States dollars or Hong Kong dollars. The 2019 facilities also consisted of a $1.093 billion United States dollar-denominated Term Loan A facility (the “USD TLA facility”). We repaid the outstanding principal balance under our USD TLA facility in 2021. Borrowings under the 2019 facilities bear interest at variable rates calculated in the manner set forth in the terms of the 2019 facilities.

We made payments totaling $844 million and $11 million on our term loans under the 2019 facilities during the thirty-nine weeks ended October 31, 2021 and November 1, 2020, respectively, and we expect to make long-term debt repayments of approximately $207 million during the fourth quarter of 2021.

We had loans outstanding of ~~$743~~$437 million, net of debt issuance costs and based on applicable exchange rates, under the Euro TLA ~~facilities,~~facility, no borrowings outstanding under the senior unsecured revolving credit facilities, and ~~$15~~$11 million of outstanding letters of credit under the senior unsecured revolving credit facilities as of October 30, 2022.

We made payments totaling $23 million and $844 million on our term loans under the 2019 facilities during the thirty-nine weeks ended October 30, 2022 and October 31, ~~2021.~~2021, respectively, and we expect to make long-term debt repayments of approximately $9 million during the fourth quarter of 2022.

The current applicable margin with respect to the Euro TLA ~~facilities~~facility and each revolving credit facility as of October ~~31, 2021~~30, 2022 was ~~1.375%~~1.250% for adjusted Eurocurrency rate loans and ~~0.375%~~0.250% for base rate or Canadian prime rate loans. The applicable margin for borrowings under the Euro TLA ~~facilities~~facility and the revolving credit facilities is subject to adjustment (i) after the date of delivery of the compliance certificate and financial statements, with respect to each of our fiscal quarters, based upon our net leverage ratio or (ii) after the date of delivery of notice of a change in our public debt rating by Standard & Poor’s or Moody’s.

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We entered into interest rate swap agreements designed with the intended effect of converting notional amounts of our variable rate debt obligation to fixed rate debt. Under the terms of the agreements, for ~~the~~any outstanding notional amount, our exposure to fluctuations in the one-month London interbank offered rate (“LIBOR”) is eliminated and we pay a fixed rate plus the current applicable margin. The following interest rate swap agreements were entered into or in effect during the thirty-nine weeks ended October 31, 2021 ~~and/~~(no interest rate swap agreements were entered into or ~~November 1, 2020:~~in effect during the thirty-nine weeks ended October 30, 2022):


(In millions)	(In millions)									(In millions)
Designation Date	Designation Date	Commencement Date	Initial Notional Amount		Notional Amount Outstanding as of October 31, 2021			Fixed Rate	Expiration Date	Designation Date	Commencement Date	Initial Notional Amount		Notional Amount Outstanding as of October 30, 2022			Fixed Rate	Expiration Date
March 2020	March 2020	February 2021	$	50	$	50		0.562%	February 2023	March 2020	February 2021	$	50	$	—	(1)	0.562%	February 2023
February 2020	February 2020	February 2021	50		50			1.1625%	February 2023	February 2020	February 2021	50		—		(1)	1.1625%	February 2023
February 2020	February 2020	February 2020	50		—		(1)	1.2575%	February 2023	February 2020	February 2020	50		—		(1)	1.2575%	February 2023
August 2019	August 2019	February 2020	50		50			1.1975%	February 2022	August 2019	February 2020	50		—		(1)	1.1975%	February 2022
June 2019	June 2019	February 2020	50		—		(1)	1.409%	February 2022	June 2019	February 2020	50		—		(1)	1.409%	February 2022
June 2019	June 2019	June 2019	50		—			1.719%	July 2021	June 2019	June 2019	50		—			1.719%	July 2021
January 2019	January 2019	February 2020	50		—			2.4187%	February 2021	January 2019	February 2020	50		—			2.4187%	February 2021
November 2018	November 2018	February 2019	139		—			2.8645%	February 2021	November 2018	February 2019	139		—			2.8645%	February 2021
October 2018	October 2018	February 2019	116		—			2.9975%	February 2021	October 2018	February 2019	116		—			2.9975%	February 2021
June 2018	June 2018	August 2018	50		—			2.6825%	February 2021	June 2018	August 2018	50		—			2.6825%	February 2021
June 2017		February 2018	306		—			1.566%	February 2020

(1) We terminated ~~early~~in 2021 the ~~June 2019 and February 2020~~ interest rate swap agreements due to expire in February 2022 and February 2023 ~~respectively,~~ in connection with the ~~$130 million voluntary long-term debt~~early repayment ~~made during~~of the ~~third quarter of 2021. Please see Note 11, “Derivative Financial Instruments,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.~~outstanding principal balance under our USD TLA facility.

Our 2019 facilities require us to comply with customary affirmative, negative and financial covenants, including a minimum interest coverage ratio and a maximum net leverage ratio. A breach of any of these operating or financial covenants would result in a default under the 2019 facilities. If an event of default occurs and is continuing, the lenders could elect to declare all amounts then outstanding, together with accrued interest, to be immediately due and payable, which would result in acceleration of our other debt. Given the disruption to our business caused by the COVID-19 pandemic and to ensure financial flexibility, we amended these facilities in June 2020 to provide temporary relief of certain financial covenants until the date on which a compliance certificate was delivered for the second quarter of 2021 (the “relief period”) unless we elected earlier to terminate the relief period and satisfied the conditions for doing so (the “June 2020 Amendment”). The June 2020 Amendment provided for the following during the relief period, among other things, the (i) suspension of compliance with the maximum net leverage ratio through and including the first quarter of 2021, (ii) suspension of the minimum interest coverage ratio through and including the first quarter of 2021, (iii) addition of a minimum liquidity covenant of $400 million, (iv) addition of a restricted payment covenant and (v) imposition of stricter limitations on the incurrence of indebtedness and liens. The limitation on restricted payments required that we suspend payments of dividends on our common stock and purchases of shares under our stock repurchase program during the relief period. The June 2020 Amendment also provided that during the relief period the applicable margin would be increased 0.25%. In addition, under the June 2020 Amendment, in the event there was a specified credit ratings downgrade by Standard & Poor’s and Moody’s during the relief period (as set forth in the June 2020 Amendment), within 120 days thereafter (i) we would have been required to cause each of our wholly owned United States subsidiaries (subject to certain customary exceptions) to become a guarantor under the 2019 facilities and (ii) we and each subsidiary guarantor would have been required to grant liens in favor of the collateral agent on substantially all of our respective assets (subject to customary exceptions). We terminated early, effective June 10, 2021, this temporary relief period and, as a result, the various provisions in the June 2020 Amendment described above are no longer in effect. Following the termination of the relief period, we are now required to maintain a minimum interest coverage ratio and a maximum net leverage ratio, calculated in the manner set forth in the terms of the 2019 facilities. AsPlease see Note 8, “Debt,” in the Notes to the Consolidated Financial Statements included in Item 8 of ~~October 31, 2021, we were in compliance with all applicable financial and non-financial covenants under these~~the Company’s Annual Report on Form 10-K for the year ended January 30, 2022 for further discussion of the 2019 facilities.

We expect to maintain compliance with the financial covenants under the 2019 facilities based on our current forecasts. If our earnings and operating cash flows do not recover as currently estimated by us as a result of the impacts of the COVID-19 pandemic, including the new variant, there can be no assurance that we will be able to maintain compliance with our financial

covenants in the future. There can be no assurance that we would be able to obtain future waivers in a timely manner, on terms acceptable to us, or at all. If we were not able to maintain compliance or obtain a future covenant waiver under the 2019 facilities, there can be no assurance that we would be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay such facilities.

7 3/4% Debentures Due 2023

We have outstanding $100 million of debentures due November 15, 2023 that accrue interest at the rate of 7 3/4%. The debentures are not redeemable at our option prior to maturity.

3 5/8% Euro Senior Notes Due 2024

We have outstanding €525 million principal amount of 3 5/8% senior notes due July 15, 2024, of which €175 million principal amount was issued on April 24, 2020. We paid €3 million ($3 million based on exchange rates in effect on the payment date) of fees in connection with the issuance of the additional €175 million notes.2024. We may redeem some or all of these notes at any time prior to April 15, 2024 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, we may redeem some or all of these notes on or after April 15, 2024 at their principal amount plus any accrued and unpaid interest.

4 5/8% Senior Notes Due 2025

We have outstanding $500 million principal amount of 4 5/8% senior notes due July 10, 2025. We ~~paid $6 million of fees in connection with the July 2020 issuance of the notes. We~~ may redeem some or all of these notes at any time prior to June 10, 2025 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, we may redeem some or all of these notes on or after June 10, 2025 at their principal amount plus any accrued and unpaid interest.

3 1/8% Euro Senior Notes Due 2027

We have outstanding €600 million principal amount of 3 1/8% senior notes due December 15, 2027. We may redeem some or all of these notes at any time prior to September 15, 2027 by paying a “make whole” premium plus any accrued and unpaid interest. In addition, we may redeem some or all of these notes on or after September 15, 2027 at their principal amount plus any accrued and unpaid interest.

Our financing arrangements contain financial and non-financial covenants and customary events of default. As of October ~~31, 2021,~~30, 2022, we were in compliance with all applicable financial and non-financial covenants under our financing arrangements.

As of October ~~31, 2021,~~30, 2022, our issuer credit was rated BBB- by Standard & Poor’s with a stable outlook and our corporate credit was rated Baa3 by Moody’s with a stable outlook, and our commercial paper was rated A-3 by Standard & Poor’s and P-3 by Moody’s. In assessing our credit strength, we believe that both Standard & Poor’s and Moody’s considered, among other things, our capital structure and financial policies, our consolidated balance sheet, our historical acquisition activity and other financial information, as well as industry and other qualitative factors.

Please see Note 9, “Debt,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for a schedule of mandatory long-term debt repayments for the remainder of ~~2021~~2022 through ~~2026.~~2027.

Please see Note 8, “Debt,” in the Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the year ended January ~~31, 2021~~30, 2022 for further discussion of our debt.

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are outlined in Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the year ended January ~~31, 2021.~~30, 2022. During the thirty-nine weeks ended October ~~31, 2021,~~30, 2022, there were no significant changes to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended January ~~31, 2021.~~30, 2022.

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ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Financial instruments held by us as of October ~~31, 2021~~30, 2022 primarily include cash and cash equivalents, short-term borrowings, long-term debt and foreign currency forward exchange ~~contracts and interest rate swap agreements.~~contracts. Note 12, “Fair Value Measurements,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report outlines the fair value of our financial instruments as of October ~~31, 2021.~~30, 2022. Cash and cash equivalents held by us are affected by short-term interest rates, which are currently low. The potential for a significant decrease in short-term interest rates is low due to the currently low rates of return we are receiving on our cash and cash equivalents and, therefore, a further decrease would not have a material impact on our interest income. However, there is potential for a more significant increase in short-term interest rates, which could have a more material impact on our interest income.rates. Given our balance of cash and cash equivalents at October ~~31, 2021,~~30, 2022, the effect of a 10 basis point change in short-term interest rates on our interest income would be approximately ~~$1.3~~$0.5 million annually. Borrowings under the 2019 facilities ~~and 2021 facility~~ bear interest at a rate equal to an applicable margin plus a variable rate. As such, the 2019 facilities ~~and 2021 facility~~ expose us to market risk for changes in interest rates. We ~~have entered~~consider the debt outstanding under these facilities and enter into interest rate swap agreements for the intended purpose of reducing our exposure to interest rate volatility. ~~As of October 31, 2021, after taking into account the effect of our~~No interest rate swap agreements ~~that~~ were ~~in effect~~outstanding as of ~~such date,~~October 30, 2022. As of October 30, 2022, approximately ~~75%~~80% of our long-term debt was at a fixed interest rate, with the ~~remainder~~remaining (euro-denominated) balance at a variable interest ~~rates. Given our long-term~~rate. Interest on the euro-denominated debt ~~position at October 31, 2021,~~is subject to change based on fluctuations in the three-month Euro Interbank Offered Rate. The effect of a 10 basis point change in ~~interest rates~~the current three-month Euro Interbank Offered Rate on our variable interest expense would be approximately ~~$50,000~~$0.4 million, annually. Please ~~refer to~~see “Liquidity and Capital Resources” in the Management’s Discussion and Analysis section included in Part I, Item 2 of this report for further discussion of our credit facilities and interest rate swap agreements.

The translational impact refers to the impact that changes in exchange rates can have on our results of operations and financial position. The functional currencies of our foreign subsidiaries are generally the applicable local currencies. Our consolidated financial statements are presented in United States dollars. The results of operations in local foreign currencies are translated into United States dollars using an average exchange rate over the representative period and the assets and liabilities in local foreign currencies are translated into United States dollars using the closing exchange rate at the balance sheet date. Foreign exchange differences that arise from the translation of our foreign subsidiaries’ assets and liabilities into United States dollars are recorded as foreign currency translation adjustments in other comprehensive (loss) income. Accordingly, our results of operations and other comprehensive (loss) income will be unfavorably impacted during times of a strengthening United States dollar, particularly against the euro, the Brazilian real, the Japanese yen, the Korean won, the British pound sterling, the Australian dollar, the Canadian dollar and the Chinese yuan renminbi, and favorably impacted during times of a weakening United States dollar against those currencies.

We currently expect our ~~2021~~2022 revenue and net income to ~~increase~~decrease by approximately ~~$120~~$670 million and ~~$20~~$75 million, respectively, due to the impact of foreign currency translation.

During the thirty-nine weeks ended October ~~31, 2021,~~30, 2022, we recognized unfavorable foreign currency translation adjustments of ~~$121~~$358 million within other comprehensive (loss) income principally driven by a strengthening of the United States dollar against the euro of 4%11% since January ~~31, 2021.~~30, 2022. Our foreign currency translation adjustments recorded in other comprehensive (loss) income are significantly impacted by the substantial amount of goodwill and other intangible assets denominated in the euro, which represented 38% of our ~~$6.3~~$5.4 billion total goodwill and other intangible assets as of October ~~31, 2021.~~30, 2022. This translational impact was partially mitigated by the change in the fair value of our net investment hedges discussed below.

A transactional impact on financial results is common for apparel companies operating outside the United States that purchase goods in United States dollars, as is the case with most of our foreign operations. Our results of operations will be unfavorably impacted during times of a strengthening United States dollar, as the increased local currency value of inventory results in a higher cost of goods in local currency when the goods are sold, and favorably impacted during times of a weakening United States dollar, as the decreased local currency value of inventory results in a lower cost of goods in local currency when the goods are sold. We also have exposure to changes in foreign currency exchange rates related to certain intercompany transactions and SG&A expenses. We currently use and plan to continue to use foreign currency forward exchange contracts or other derivative instruments to mitigate the cash flow or market value risks associated with these inventory and intercompany transactions, but we are unable to entirely eliminate these risks. The foreign currency forward exchange contracts cover at least 70% of the projected inventory purchases in United States dollars by our foreign subsidiaries.

We currently expect our ~~2021~~2022 net income to ~~increase~~decrease by approximately ~~$30~~$25 million due to the transactional impact of foreign currency. Given the current exchange rates, particularly the euro, we also expect our 2023 net income to decrease due to the

transactional impact of foreign currency, and by a greater amount than in 2022, with an expected negative impact to our 2023 gross margin of approximately 100 basis points.

Given our foreign currency forward exchange contracts outstanding at October ~~31, 2021,~~30, 2022, the effect of a 10% change in foreign currency exchange rates against the United States dollar would result in a change in the fair value of these contracts of approximately $105 million. Any change in the fair value of these contracts would be substantially offset by a change in the fair value of the underlying hedged items.

In order to mitigate a portion of our exposure to changes in foreign currency exchange rates related to the value of our investments in foreign subsidiaries denominated in the euro, we designated the carrying amount of our €1.125 billion aggregate principal amount of senior notes issued by PVH Corp., a U.S.-based entity, as net investment hedges of our investments in certain of our foreign subsidiaries that use the euro as their functional currency. The effect of a 10% change in the euro against the United States dollar would result in a change in the fair value of the net investment hedges of approximately ~~$130~~$110 million. Any change in the fair value of the net investment hedges would be more than offset by a change in the value of our investments in certain of our European subsidiaries. Additionally, during times of a strengthening United States dollar against the euro, we would be required to use a lower amount of our cash flows from operations to pay interest and make long-term debt repayments on our euro-denominated senior notes, whereas during times of a weakening United States dollar against the euro, we would be required to use a greater amount of our cash flows from operations to pay interest and make long-term debt repayments on these notes.

Included in the calculations of expense and liabilities for our pension plans are various assumptions, including return on assets, discount rates, mortality rates and future compensation increases. Actual results could differ from these assumptions, which would require adjustments to our balance sheet and could result in volatility in our future pension expense. Holding all other assumptions constant, a 1% change in the assumed rate of return on assets would result in a change to ~~2021~~2022 net benefit cost related to the pension plans of approximately $7 million. Likewise, a 0.25% change in the assumed discount rate would result in a change to ~~2021~~2022 net benefit cost of approximately ~~$41~~$37 million.

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ITEM 4 - CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and ~~Interim~~ Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and ~~Interim~~ Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and ~~Interim~~ Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting during the period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting despite the fact that a significant number of our employees are working remotely due to the COVID-19 pandemic.

We are currently undertaking a major multi-year SAP S/4 implementation to upgrade our platforms and systems worldwide. The implementation is occurring in phases over multiple years. We successfully launched the Global Finance functionality on the SAP S/4 platform in Asia and North America in the first quarter of 2020 and the commercial functionality on the SAP S/4 platform for certain businesses in North America in the third quarter of 2021.

As a result of this multi-year implementation, we have made certain changes to our processes and procedures, including as a result of the functionality launched to date, which have resulted in changes to our internal control over financial reporting. However, these changes were not material. We expect to continue to make changes as we launch the commercial functionality for additional businesses in future periods. While we expect this implementation to strengthen our internal control over financial reporting by automating certain manual processes and standardizing business processes and reporting across our organization, we will continue to evaluate and monitor our internal control over financial reporting for material changes as processes and procedures in the affected areas evolve. For a discussion of risks related to the implementation of new systems and hardware, please ~~refer to~~see our Information Technology risk factor “We rely significantly on information technology. Our business and reputation could be adversely impacted if our computer systems, or systems of our business partners and service providers, are disrupted or cease to operate effectively or if we or they are subject to a data security or privacy breach” in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended January ~~31, 2021.~~30, 2022.

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PART II – OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

We are a party to certain litigations which, in management’s judgment based, in part, on the ~~opinions~~opinion of legal counsel, will not have a material adverse effect on our financial position.

ITEM 1A - RISK FACTORS

Please refer to Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended January ~~31, 2021~~30, 2022 for a description of certain significant risks and uncertainties to which our business, financial condition and results of operations are subject. There have been no material changes to these risk factors as of October ~~31, 2021.~~30, 2022.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES

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)
August 2, 2021 -
August 29, 2021 379,519 $ 108.94 374,976 $ 531,742,218
August 30, 2021 -
October 3, 2021 529,957 110.08 500,839 476,573,972
October 4, 2021 -
October 31, 2021 489,448 108.85 483,950 423,881,123
Total 1,398,924 $ 109.34 1,359,765 $ 423,881,123


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)
August 1, 2022 -
August 28, 2022	366,782	$	66.31	358,300	$	974,841,825
August 29, 2022 -
October 2, 2022	900,090	53.87		879,600	927,588,968
October 3, 2022 -
October 30, 2022	634,679	49.09		630,000	896,646,740
Total	1,901,551	$	54.68	1,867,900	$	896,646,740

(1) The ~~PVH Corp.~~Company’s Board of Directors has authorized over time since 2015 an aggregate ~~$2.0~~$3.0 billion stock repurchase program through June 3, ~~2023.~~2026, which includes a $1.0 billion increase in the authorization and a three year extension of the program approved by the Board of Directors on April 11, 2022. Repurchases under the program may be made from time to time over the period through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as we deem appropriate. Purchases are made based on a variety of factors, such as price, corporate requirements and overall market conditions, applicable legal requirements and limitations, trading restrictions under our insider trading policy and other relevant factors. The program may be modified by the Board of Directors, including to increase or decrease the repurchase limitation or extend, suspend, or terminate the program, at any time, without prior notice. We suspended share repurchases under our stock repurchase program beginning in March 2020 in response to the impacts of the COVID-19 pandemic on our business. In addition, we entered into an amendment to our senior unsecured credit facilities in June 2020, under which share repurchases were not permitted until after the relief period. However, effective June 10, 2021, the relief period was terminated and we now are permitted to resume share repurchases.

(2) Our 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 third quarter of ~~2021~~2022 in connection with the settlement of restricted stock units to satisfy tax withholding requirements.

6563

ITEM 6 - EXHIBITS


The following exhibits are included herein:

3.1						Amended and Restated Certificate of Incorporation of PVH Corp. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed June 21, 2019).

3.2						By-Laws of PVH Corp., as amended through June 20, 2019 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K, filed on June 21, 2019).

4.1						Specimen of Common Stock certificate (incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the period ended July 31, 2011).

4.2						Indenture, dated as of November 1, 1993, between Phillips-Van Heusen Corporation and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.01 to our Registration Statement on Form S-3 (Reg. No. 33-50751) filed on October 26, 1993); First Supplemental Indenture, dated as of October 17, 2002, to Indenture, dated as of November 1, 1993, between Phillips-Van Heusen Corporation and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.15 to our Quarterly Report on Form 10-Q for the period ended November 3, 2002); Second Supplemental Indenture, dated as of February 12, 2002, to Indenture, dated as of November 1, 1993, between Phillips-Van Heusen Corporation and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K, filed on February 26, 2003); Third Supplemental Indenture, dated as of May 6, 2010, between Phillips-Van Heusen Corporation and The Bank of New York Mellon (formerly known as The Bank of New York), as Trustee (incorporated by reference to Exhibit 4.16 to our Quarterly Report on Form 10-Q for the period ended August 1, 2010); Fourth Supplemental Indenture, dated as of February 13, 2013, to Indenture, dated as of November 1, 1993, between PVH Corp. and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.11 to our Quarterly Report on Form 10-Q for the period ended May 5, 2013).



4.3						Indenture, dated as of June 20, 2016, between PVH Corp., U.S. Bank National Association, as Trustee, Elavon Financial Services Limited, UK Branch, as Paying Agent and Authenticating Agent, and Elavon Financial Services Limited, as Transfer Agent and Registrar (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on June 20, 2016).

4.4						Indenture, dated as of December 21, 2017, between PVH Corp., U.S. Bank National Association, as Trustee, Elavon Financial Services DAC, UK Branch, as Paying Agent and Authenticating Agent, and Elavon Financial Services DAC, as Transfer Agent and Registrar (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on December 21, 2017).



4.5						Indenture, dated as of July 10, 2020, between PVH Corp. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K, filed on July 10, 2020) and Form of 4 5/8% Senior Note due 2025 (incorporated by reference to Exhibit 4.2 and Appendix A to Exhibit 4.1 to our Current Report on Form 8-K, filed on July 10, 2020).

+31.1						Certification of Stefan Larsson, Chief Executive Officer, pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

+31.2						Certification of ~~James W. Holmes,~~Zachary Coughlin, Executive Vice President ~~Interim~~and Chief Financial Officer, ~~and Controller,~~ pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

*,+32.1						Certification of Stefan Larsson, Chief Executive Officer, pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350.

*,+32.2						Certification of ~~James W. Holmes,~~Zachary Coughlin, Executive Vice President ~~Interim~~and Chief Financial Officer, ~~and Controller,~~ pursuant to Section 906 of the Sarbanes – Oxley Act of 2002, 18 U.S.C. Section 1350.

+101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

6664


+101.SCH						Inline XBRL Taxonomy Extension Schema Document

+101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

+101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

+101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

+101.PRE						Inline 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.

* Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

6765

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			PVH CORP.
			Registrant


Dated:	December 8, ~~2021~~2022	/s/ JAMES W. HOLMES
		James W. Holmes
		Executive Vice President ~~Interim Chief Financial Officer~~ and Controller ~~(Interim Principal Financial Officer and the Principal~~(Principal Accounting Officer)

6866


(In millions)	Foreign currency translation adjustments			Net unrealized and realized gain (loss) on effective cash flow hedges		Total
Balance, February 2, 2020	$	(665.7)		$	25.6	$	(640.1)
Other comprehensive income (loss) before reclassifications	58.6		(1)(3)	(31.2)		27.4
Less: Amounts reclassified from AOCL	—			1.6		1.6
Other comprehensive income (loss)	58.6			(32.8)		25.8
Balance, November 1, 2020	$	(607.1)		$	(7.2)	$	(614.3)