PVH Is Demonstrating Progress Despite Near-Term Economic and Industry Challenges

Once known as a producer of midtier men's shirts, PVH transformed itself by purchasing fashion brand Calvin Klein in 2003. It acquired a second large fashion brand in Tommy Hilfiger in 2010 and then purchased Calvin Klein licensee Warnaco in 2013. Although they are popular, we do not believe that either of these major brands has the pricing power or competitiveness to provide a moat. PVH has recently disposed of its smaller brands. While now lacking diversification, we think it was prudent for the firm to focus on its highest-potential properties and on returning capital to shareholders through share repurchases.