PVH 1Q17 Earnings Call Notes

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Manny Chirico – Chairman, Chief Executive Officer

*I feel confident that a border tax is not going to occur

“I feel more confident today that the likelihood of the border tax, particularly the way it was initially drafted is not going to recur. And I don’t have a crystal ball. I have been in Washington. My entire career, before this year, before this last 12 months, I think I have been in Washington three times. In the last 12 months, I have been in Washington multiple times. And I don’t know if it’s six, seven times meeting with different members of Congress and meeting with the administration when possible to really try to take a leadership position on this topic because I just think it’s so bad, not only for our industry but I think it’s just so bad for the economy in general. Since the consumer represents two-thirds of the economy, I think the last thing we want to do is put an import tax and start picking winners and losers as a country as we go forward. So I really tried to be front and center about it.”

Inventories in excellent position. Outlet has become more promotional

“Inventory levels globally are in excellent position in just about every market. I am not going to micro manage into each one. But overall, when you look at international inventories, fantastic shape. When it comes to the United States, I think it’s a little bit more mixed. But on balance, I think you are seeing is with the contraction of open to buy dollars that has well significantly exceeded the negative comp store trends that I think on balance inventories are in good shape in the channel. A lot depends in the next couple months, how we see the Father’s Day and how we see that will progress, but there is not bi callouts right now about any inventories in the channel. Outlet, in general, our inventories are in fine shape. I would say that’s become a highly promotional channel today and I think because there has been such contraction in the open to buy dollars, there is a lot more availability of merchandise in the outlet channel which has put pressure on margins overall.”