OTHER COMMENTS

12 Months Ended

Feb. 02, 2025

Investigation by China’s Ministry of Commerce

In September 2024, MOFCOM announced that it had initiated an investigation into the Company’s business under the UEL Provisions upon the suspicion that the Company (i) suspended normal transactions with Chinese entities or individuals, (ii) adopted discriminatory measures against products produced in or made from raw materials or component parts from China’s Xinjiang Uyghur Autonomous Region, and (iii) violated normal market trading principles. In October 2024, the Company submitted a written response to MOFCOM and, in December 2024, the Company submitted a supplemental response. In January 2025, MOFCOM issued a preliminary finding that PVH Corp. had violated normal market trading principles and in February it announced its determination and placed PVH Corp. on the UEL. The Company does not know if or when MOFCOM will implement any measures as a result of the listing or what they will be if any are imposed. According to the UEL Provisions, potential measures could include monetary fines, restrictions or prohibitions on engaging in import and export activities related to China or making investments in China, entry denial of the Company’s relevant personnel into China, restrictions or revocation of work permits, stay or residence status of the Company’s relevant personnel in China, or other measures. No measures have been imposed on the Company at this time. The practical impact of any such restrictions or prohibitions could include the Company’s inability to produce goods in China for sale elsewhere, the Company’s inability to sell goods on a wholesale or retail basis in China, or the Company’s inability to make investments in China.

The Company cannot currently predict the duration or impact of any measures that may ultimately be imposed. The imposition and enforcement of measures against the Company could have a material adverse effect on its revenue and results of operations. Furthermore, if, as a result of any such measures, it is necessary for the Company to cease certain or all operations in China, it may result in charges related to excess inventory and difficulty collecting trade receivables, among other things. The Company may also incur material non-cash impairment charges if it is unable to recover the carrying value of its goodwill, other indefinite-lived intangible assets and long-lived assets. Additionally, if the production of the Company’s products in China ceases, its business could be impacted more broadly and the Company may need or decide to shift production to other jurisdictions.

Litigation

The Company is a party to certain litigations which, in management’s judgment, based in part on the opinions of legal counsel, will not have a material adverse effect on the Company’s financial position.

Asset Retirement Liabilities

The Company’s asset retirement liabilities are included in accrued expenses and other liabilities in the Company’s Consolidated Balance Sheets and relate to the Company’s obligation to dismantle or remove leasehold improvements from leased office, retail store or warehouse locations at the end of a lease term in order to restore a facility to a condition specified in the lease agreement. The Company records the fair value of the liability for asset retirement obligations in the period in which it is legally or contractually incurred. Upon initial recognition of the asset retirement liability, an asset retirement cost is capitalized by increasing the carrying amount of the asset by the same amount as the liability. In periods subsequent to initial measurement, the asset retirement cost is recognized as expense through depreciation over the asset’s useful life. Changes in the

liability for the asset retirement obligations are recognized for the passage of time and revisions to either the timing or the amount of estimated cash flows. Accretion expense is recognized in SG&A expenses for the impacts of increasing the discounted fair value to its estimated settlement value.

The following table presents the activity related to the Company’s asset retirement liabilities, included in accrued expenses and other liabilities in the Company’s Consolidated Balance Sheets, for the years ended February 2, 2025 and February 4, 2024:


(In millions)	2024		2023
Balance at beginning of year	$	37.3	$	44.7

Liabilities incurred	2.8		2.7
Liabilities settled (payments)	(3.2)		(9.3)
Accretion expense	0.4		0.4
Revisions in estimated cash flows	(0.9)		0.6
Currency translation adjustment	(0.8)		(1.8)
Balance at end of year	$	35.6	$	37.3

Supply Chain Finance Program

The Company has a voluntary supply chain finance program (the “SCF program”) administered through a third party platform that provides the Company’s inventory suppliers with the opportunity to sell their receivables due from the Company to participating financial institutions in advance of the invoice due date, at the sole discretion of both the suppliers and the financial institutions. The Company is not a party to the agreements between the suppliers and the financial institutions and has no economic interest in a supplier’s decision to sell a receivable. The Company’s payment obligations, including the amounts due and payment terms, which generally do not exceed 90 days, 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 the Company’s Consolidated Balance Sheets and the corresponding payments are reflected in cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows. Suppliers had elected to sell $457.9 million and $423.4 million of the Company’s payment obligations that were outstanding as of February 2, 2025 and February 4, 2024, respectively, to financial institutions and $1,779.1 million and $1,909.4 million had been settled through the program during 2024 and 2023, respectively.

The following table presents the activity related to the Company’s outstanding obligations confirmed as valid under the SCF program, included in accounts payable in the Company’s Consolidated Balance Sheets, for the year ended February 2, 2025:


(In millions)	2024
Confirmed obligations outstanding at beginning of year	$	423.4
Invoices confirmed during the year	1,816.7
Confirmed invoices paid during the year	(1,779.1)
Currency translation adjustment	(3.1)
Confirmed obligations outstanding at end of year	$	457.9