PVH Annual Report 2019

ANNUAL REPORT 2019

CONTENTS

1 ...... P R I O R I T I E S 3 ...... L E T T E R T O S T O C K H O L D E R S 6 ...... Y E A R I N R E V I E W 12....... T O M M Y H I L F I G E R 16....... C A LV I N K L E I N 20....... H E R I TA G E B R A N D S 24....... C O R P O R AT E R E S P O N S I B I L I T Y 28....... D I R E C T O R S , O F F I C E R S , E X E C U T I V E S

& BRAND MANAGEMENT

29....... O T H E R I N F O R M AT I O N 30....... G A A P T O N O N - G A A P R E C O N C I L I AT I O N S 33....... A N N U A L R E P O R T O N F O R M 1 0 - K

ABOUT PVH PVH is one of the most admired fashion and lifestyle companies in the world. We power brands that drive FASHION FORWARD ? for good. We manage a diversified brand portfolio, including the CALVIN KLEIN, TOMMY HILFIGER, Van Heusen, IZOD, ARROW, Warner's, Olga and Geoffrey Beene brands, as well as the digital-centric True&Co. intimates brand. We market a variety of goods under these and other nationally and internationally known owned and licensed brands. PVH has over 40,000 associates operating in more than 40 countries and generated $9.9 billion in revenues in 2019. That's the Power of Us. That's the POWER OF PVH.

VISION

To be the most admired fashion and lifestyle company in the world.

PURPOSE

We power brands that drive fashion forward ? for good.

PRIORITIES

1. DRIVE

consumer engagement through innovative designs and personalized brand and shopping experiences that capture the heart of the consumer.

2 . EXPAND

our worldwide reach through organic growth and acquisitions.

3. INVEST

in and evolve how we operate by leveraging technology and data to be dynamic, nimble and forward-thinking.

4. DEVELOP

a talented and skilled workforce that embodies our values and an entrepreneurial spirit, while empowering our associates to design their future.

5. DELIVER

sustainable, profitable growth and generate free cash flow to create long-term stockholder value.

VALUES

Individuality Be you

Partnership Work together

Passion Inspire and innovate

Integrity Do the right thing

Accountability Own it

/ 1 S T R AT E G I C P R I O R I T I E S ? A N N U A L R E P O R T 2 0 1 9

2 / ANNUAL REPORT 2019 ? LETTER TO STOCKHOLDERS

LETTER TO STOCKHOLDERS

Emanuel Chirico

Chairman and Chief Executive Officer

2019 demonstrated the Power of PVH. Inspired by our vision and our purpose, we expanded our international businesses, both organically and through the strategic acquisitions of licensed businesses, further strengthened our senior leadership team and deepened our commitments to effect positive change in our industry and the world at large.

We power brands that drive fashion forward ? for good. In 2019, we built upon our long-standing commitment to corporate responsibility ("CR") by launching Forward Fashion, our vision for the future that provides a new level of ambition and transparency across our CR platform and reinforces our long-standing commitment to sustainable business.

We invested in the consumer data journey, digitization, our supply chain and our talent, with an emphasis on inclusion and diversity. Our dedication to providing the most desirable products and a personalized consumer experience helped us deepen our connection with consumers. These important investments continue to support the transformation of our operations,

while allowing us to make faster and more informed decisions to drive long-term opportunities.

The year also presented us with several headwinds ? from a softening consumer environment to geopolitical challenges to some self inflicted issues and ending with the onset of the COVID-19 outbreak. We took decisive actions by evolving CALVIN KLEIN product assortments and in addressing excess inventory levels at Tommy Hilfiger North America stemming from lower levels of international tourists travelling to the U.S., as well as weathered challenges in the moderate segment of the market where our Heritage Brands business operates. While these issues negatively impacted our financial performance for the year, we believe that our actions will position us to deliver sustainable, profitable future growth.

PVH has a long legacy of delivering financial excellence and, in March 2020, we celebrated our 100-year anniversary listed on the New York Stock Exchange. This is truly an incredible achievement, as we are the first apparel company and one

of only 28 companies to reach this milestone. Our success since our founding almost 140 years ago speaks to our resilience and ability to drive transformation while successfully managing our brands.

These characteristics will be critical for PVH as we navigate 2020. As we begin the year, the COVID-19 outbreak has become a pandemic, impacting every major market in which we operate, with temporary store closings by us and our retail partners across all regions. Our people are demonstrating their passion and dedication to PVH as I write this, as most of our associates around the world are working remotely to continue to operate our business through this difficult time. While the pandemic is highly dynamic and continues to unfold, my confidence in PVH and its ability to navigate this crisis is unwavering. I believe that our core strengths ? our talent, our brands, our strong fundamentals and balance sheet ? will continue to support us through the uncertain time, and ultimately lead us back to a healthy path of long-term growth once the pandemic subsides.

/ 3 L E T T E R T O S T O C K H O L D E R S ? A N N U A L R E P O R T 2 0 1 9

By the Numbers

REVENUES

($ in millions)

$9,909 $9,657 $8,915

GAAP EARNINGS PER SHARE

$5.60 $9.65 $6.84

NON-GAAP EARNINGS PER SHARE1

$9.54 $9.60 $7.94

2019

2018

2017

1 Figures exclude certain amounts that were deemed non-recurring or non-operational. Refer to GAAP to Non-GAAP Reconciliations on pages 30 and 31.

2019 REVENUES

by business %

48% Tommy Hilfiger

37% Calvin Klein

15% Heritage Brands

by region1 %

43% U.S.

37% Europe

14% Asia Pacific

6% Americas (excluding U.S.)

1 Europe includes the Middle East and Africa; Asia Pacific includes Australia and New Zealand; Americas (excluding U.S.) includes Canada, Mexico, South America, Central America and the Caribbean.

2019 FINANCIAL PERFORMANCE

The power of our diversified business model helped us navigate the challenges and mitigate some of the pressure on our financial performance. We executed against our strategic priorities and continued to invest in and evolve our brands to capture the heart of today's consumer.

We grew revenues by 3% to $9.9 billion and delivered GAAP earnings per share of $5.60 compared to $9.65 in 2018. On a non-GAAP basis, we posted earnings per share of $9.54* (which included a negative impact of $0.35 per share related to foreign currency exchange rates) as compared to $9.60* in 2018. While these results were below our initial expectations, performance in our Europe business was a highlight, as we continued to experience outstanding results in our Tommy Hilfiger business and we re-ignited the CALVIN KLEIN brand's momentum.

Operating a business in these uncertain times required us to embrace change while preserving our unique culture, and we took actions to best position PVH for long-term success. These included:

4 / ANNUAL REPORT 2019 ? LETTER TO STOCKHOLDERS

? Hiring Stefan Larsson into the newly created role of President, PVH Corp., where he is overseeing PVH's branded businesses and regions, with the Calvin Klein business turnaround as his top focus area.

? Appointing Cheryl Abel-Hodges as CEO of Calvin Klein, with an immediate focus on overseeing the product turnaround and driving brand expansion, particularly in Europe and Asia.

? Appointing Tom Chu as President, PVH Asia Pacific, where he is overseeing the expansion of CALVIN KLEIN and TOMMY HILFIGER across the region, which is our largest long-term market opportunity.

? Continuing the optimization of our Heritage Brands portfolio, including by streamlining operations, selling our Speedo North America business (which closed in April 2020), and exiting businesses, such as DKNY men's apparel, that did not meet our profitability requirements.

? Addressing challenges in the Tommy Hilfiger North America business by proactively taking markdowns to right-size inventory levels, including in response to lower levels of international tourism into the U.S.

? Evolving to the new era of retail by growing our digital commerce penetration, expanding our omni-channel capabilities and reducing our retail store footprint.

*Figures exclude certain amounts that were deemed non-recurring or non-operational. Refer to GAAP to Non-GAAP Reconciliations on pages 30 and 31.

CAPTURING INTERNATIONAL EXPANSION OPPORTUNITIES

Powered by our brands' strength, relevance and recognition, we continued to pursue our global expansion efforts. We capitalized on organic growth opportunities internationally and acquired two regional licensed businesses, resulting in 9% revenue growth outside the U.S.

" We leveraged the incredible power of our brands to capture international expansion opportunities."

Highlights from 2019 include:

? Capitalizing on the European opportunity: Europe outperformed as our highest-growth region, and our strong regional presence is a key competitive advantage. Performance for TOMMY HILFIGER continued to be exceptional. While the brand is well-penetrated, with nearly $2.5 billion in revenues in Europe, it continues to gain market share and exhibit momentum across all major countries, channels and categories. We also further expanded the CALVIN KLEIN lifestyle in Europe beyond jeans and underwear, and our apparel and accessories businesses under the brand are being met with an increasingly strong consumer response. We remain confident in the business's potential to achieve at least $2 billion in revenues in Europe over time.

? Acquiring regional licenses: We completed two acquisitions during the second quarter of 2019. The first was our acquisition of Gazal Corporation Limited ("Gazal"), which was our joint venture partner for CALVIN KLEIN, TOMMY HILFIGER, Van Heusen and other brands in Australia and New Zealand. The second was our acquisition of the licensed Tommy Hilfiger retail business in Central and Southeast Asia. By taking direct operating control of these businesses, we believe we can expand our brand presence and market share in these strategically

important markets over the longterm by leveraging the power of our regional operations.

? Navigating the brand opportunities in Asia: While Asia experienced mixed trends during 2019, we continued to position our businesses for a long-term trajectory of sustainable top and bottom-line growth. Our strong brand positioning and talented teams drove the businesses forward, despite the weakening consumer environment in China, protests in Hong Kong SAR, the U.S.-China trade tensions, and the COVID-19 outbreak coincident with the start of the Lunar New Year holiday. We have dramatically increased our digital penetration over the last several years to reflect local market preferences and provided more unique brand experiences. We were pleased to see a stabilization of business trends in China during the fourth quarter before the onset of the COVID-19 outbreak and continue to believe the region has significant growth potential. Japan remained a positive story, particularly for TOMMY HILFIGER, and the newly acquired Australia business performed better than expected.

YEAR IN REVIEW 2019 HIGHLIGHTS

" 2019 demonstrated the Power of PVH as we expanded our international businesses, further strengthened our senior leadership team and deepened our commitments to effect positive change in our industry and the world at large."

6 / ANNUAL REPORT 2019 ? YEAR IN REVIEW

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