Dive Brief:
- PVH Corp. expects to mitigate twice as much tariff impact in 2026 as it did last year while girding itself for the high end of levy rates, according to its Q4 2025 earnings call.
- The parent company of Calvin Klein and Tommy Hilfiger offset 30% of gross margin impact in 2025, interim CFO and EVP of Global Financial Planning and Analysis Melissa Stone said on the call. The company’s full-year guidance for 2026 assumes it will boost that number to 60% and enter 2027 with expectations of mitigating 75% of tariffs on an annualized basis.
- “We continue to take tariff mitigation actions with the benefit of our actions planned to increase quarter by quarter throughout 2026 as we work to fully mitigate tariffs over time,” Stone said on the March 31 call.
Dive Insight:
PVH is taking lessons from last year’s tumultuous tariff environment to improve its ability to limit duty costs and manage inventory effectively.
The company is projecting $195 million in gross tariff costs this year, with those forecasts based on an assumed baseline 15% duty rate, matching a level floated by the Trump administration.
Currently, most goods entering the U.S. are facing a 10% baseline tariff under a temporary levy the Trump administration installed in February following a Supreme Court decision invalidating previous levies. President Donald Trump indicated he would increase the tariff to 15%, but that has yet to happen.
Beyond preparing for the high end of levies, PVH also isn’t baking in any potential tariff refunds into its full-year plans, Stone said.
The company isn’t alone in taking a conservative approach to its tariff outlook. For example, Williams-Sonoma also didn’t include any projected tariff refunds in its 2026 guidance, which assumes current tariff levels will remain in place or be replaced by similar levies.
Instead, the home goods retailer plans to mitigate levies by leaning on previous strategies, such as negotiating with vendors, re-sourcing, adjusting prices and implementing supply chain efficiencies and cost improvements. Similarly, brands such as Gap Inc., Newell Brands and American Eagle are confident in their tariff mitigation playbooks.
PVH’s own strategies have included working with vendors and its supply base to blunt tariffs, former CFO Zac Coughlin said at Goldman Sachs’ Global Retailing Conference in September. PVH did not immediately respond to a request for comment about specific mitigation actions it is taking.
