PVH CORP DE

Previous wording

We aggregate our reportable segments into three main businesses: (i) Tommy Hilfiger, which consists of the businesses we operate under our TOMMY HILFIGER trademarks; (ii) Calvin Klein, which consists of the businesses we operate under our Calvin Klein trademarks; and (iii) Heritage Brands, which consists of the businesses we operate under the Warner’s, Olga and True&Co. trademarks, which we owned until November 27, 2023, the Van Heusen and Nike trademarks, which we license for certain product categories, and other licensed trademarks. References to brand names are to registered and common law trademarks owned by us or licensed to us by third parties and are identified by italicizing the brand name.

Current wording

Effective February 3, 2025, the first day of 2025, we changed our reportable segments to be region-focused to align with changes in our business and organizational structure. We operate our business through the following reportable segments: (i) Europe, the Middle East and Africa (“EMEA”), (ii) Americas, (iii) Asia-Pacific (“APAC”), and (iv) Licensing. Our reportable segments include the brand businesses we operate under our TOMMY HILFIGER and Calvin Klein trademarks, which we own, and Van Heusen, Nike and other trademarks, which we license for certain product categories. References to brand names are to registered and common law trademarks owned by us or licensed to us by third parties and identified by italicizing the brand name. Please see Note 17, “Segment Data,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion of our reportable segments.

Previous wording

Our revenue was $9.2 billion in 2023, of which over 70% was generated outside of the United States. Our global iconic lifestyle brands, TOMMY HILFIGER and Calvin Klein, together generated over 90% of our revenue.

Current wording

Our revenue was $8.7 billion in 2024, of which over 70% was generated outside of the United States. Our global iconic lifestyle brands, TOMMY HILFIGER and Calvin Klein, together generated over 95% of our revenue.

Previous wording

In September 2024, China’s Ministry of Commerce (“MOFCOM”) announced that it had initiated an investigation into our business under the Provisions on the List of Unreliable Entities (“UEL Provisions”). In October 2024, we submitted a written response to MOFCOM. We do not know when MOFCOM will conclude its investigation or announce its findings (if any), nor do we know if or how we would be penalized. Approximately 6% of our revenue and approximately 16% of our income before interest and taxes was generated in China in 2023. Furthermore, if, as a result of any such penalties, it is necessary for us to cease operations in China entirely, it may result in charges related to excess inventory and difficulty collecting trade receivables, among other things. We may also incur material non-cash impairment charges if we are unable to recover the carrying value of our goodwill, other indefinite-lived intangible assets and long-lived assets. Please see Risk Factors included in Part II, Item 1A. of this report for additional information.

Current wording

In September 2024, China’s Ministry of Commerce (“MOFCOM”) announced that it had initiated an investigation into our business under the Provisions of the List of Unreliable Entities (“UEL Provisions”). In October 2024, we submitted a written response to MOFCOM and, in December 2024, we submitted a supplementary 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 List of Unreliable Entities (“UEL”). We do 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. Approximately 6% and 20% of our revenue and income before interest and taxes, respectively, were generated in China in 2024. Furthermore, if, as a result of any such measures, it is necessary for us 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. We may also incur material non-cash impairment charges if we are unable to recover the carrying value of our indefinite-lived intangible assets and long-lived assets. Please see our risk factor“China’s Ministry of Commerce (“MOFCOM”) conducted an investigation into our business which resulted in PVH Corp. being placed on the List of Unreliable Entities (“UEL”) and could result in fines or restrictions on our ability to do business in China, which could have a material adverse effect on our revenue and results of operations” in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended February 2, 2025 for additional information.

Previous wording

There continues to be uncertainty in the current macroeconomic environment due to the above-mentioned items. Our 2024 outlook assumes no material worsening of current conditions. Our revenue and earnings for the remainder of 2024 may be subject to significant change as a result of these and other factors.

Current wording

There is significant uncertainty with respect to global trade policies and the related impact on the broader macroeconomic environment, as well as the impact of inflation and other macroeconomic factors, and foreign currency volatility. Our 2025 outlook assumes no material worsening of current conditions. Our revenue and earnings in 2025 may be subject to significant material change as a result of these and other macroeconomic factors.

Previous wording

We generate net sales from (i) the wholesale distribution to traditional retailers (both for stores and digital operations), pure play digital commerce retailers, franchisees, licensees and distributors of branded sportswear (casual apparel), jeanswear, performance apparel, intimate apparel, underwear, swimwear, dress shirts, handbags, accessories, footwear and other related products under owned and licensed trademarks, and (ii) the sale of certain of these products through (a) approximately 1,400 Company-operated free-standing store locations worldwide under our TOMMY HILFIGER and Calvin Klein trademarks, (b) approximately 1,500 Company-operated shop-in-shop/concession locations worldwide under our TOMMY HILFIGER and Calvin Klein trademarks, and (c) digital commerce sites worldwide, under our TOMMY HILFIGER and Calvin Klein trademarks. Additionally, we generate royalty, advertising and other revenue from fees for licensing the use of our trademarks. We manage our operations through our operating divisions, which are presented as the following reportable segments: (i) Tommy Hilfiger North America; (ii) Tommy Hilfiger International; (iii) Calvin Klein North America; (iv) Calvin Klein International; and (v) Heritage Brands Wholesale.

Current wording

We generate net sales from (i) the wholesale distribution to traditional retailers (both for stores and digital operations), pure play digital commerce retailers, franchisees, licensees and distributors of branded sportswear (casual apparel), jeanswear, performance apparel, intimate apparel, underwear, swimwear, dress shirts, handbags, accessories, footwear and other related products under owned and licensed trademarks, and (ii) the sale of certain of these products through (a) approximately 1,350 Company-operated free-standing store locations worldwide under our TOMMY HILFIGER and Calvin Klein trademarks, (b) approximately 1,450 Company-operated shop-in-shop/concession locations worldwide under our TOMMY HILFIGER and Calvin Klein trademarks, and (c) digital commerce sites worldwide, under our TOMMY HILFIGER and Calvin Klein trademarks. Additionally, we generate royalty, advertising and other revenue from fees for licensing the use of our trademarks.

Previous wording

•We embarked on a multi-year initiative beginning in the second quarter of 2024 to simplify our operating model by centralizing certain processes, and improving systems and automation to drive more efficient and cost-effective ways of working across the organization (the “Growth Driver 5 Actions”). The initiative is expected to result in annual cost savings of approximately $200 million to $300 million, net of continued strategic investments by 2026, with the actions to support it largely completed by the end of 2025. We recorded pre-tax costs of $18 million during the thirty-nine weeks ended November 3, 2024 in connection with this initiative, including (i) $28 million of costs consisting principally of severance, and (ii) a $10 million gain on the sale of a warehouse and distribution center. We expect to incur additional pre-tax costs of approximately $15 million in the fourth quarter of 2024, consisting principally of severance. We expect to incur additional costs in 2025, however the additional costs cannot be quantified at this time. Please see Note 14, “Exit Activity Costs,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Current wording

•We embarked on a multi-year initiative beginning in the second quarter of 2024 to simplify our operating model by centralizing certain processes, and improving systems and automation to drive more efficient and cost-effective ways of working across the organization (the “Growth Driver 5 Actions”). The initiative is expected to result in annual cost savings of approximately $200 million to $300 million, net of continued strategic investments by 2026, with the actions to support it largely completed by the end of 2025. We recorded pre-tax costs of $13 million during the first quarter of 2025 in connection with this initiative consisting principally of severance. We expect to incur additional costs in 2025, however the additional costs cannot be quantified at this time. Please see Note 15, “Exit Activity Costs,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Previous wording

•We completed the sale of our women’s intimates businesses conducted under the Warner’s, Olga and True&Co. trademarks, including net assets with a carrying value of $140 million, to Basic Resources on November 27, 2023 (the “Heritage Brands intimates transaction”) for net proceeds of $156 million. We utilized the net proceeds from the Heritage Brands intimates transaction to repurchase shares of our common stock during the fourth quarter of 2023. We recorded an aggregate net pre-tax gain of $13 million in the fourth quarter of 2023 in connection with the closing of the transaction, consisting of (i) a gain of $15 million, which represented the excess of the amount of consideration received over the carrying value of the net assets, less costs to sell, partially offset by (ii) $2 million of pre-tax severance and other termination benefits associated with the transaction. We recorded an incremental gain of $10 million in the first quarter of 2024 due to the accelerated realization of the earnout provided for in the agreement with Basic Resources. Please see Note 4, “Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Current wording

•We completed the sale of our Warner’s, Olgaand True&Co. women’s intimates businesses, including net assets with a carrying value of $140 million, to Basic Resources on November 27, 2023 (the “Heritage Brands intimates transaction”) for net proceeds of $156 million. We recorded a pre-tax gain on the sale of $15 million in the fourth quarter of 2023 in connection with the closing of the transaction and recorded an incremental gain of $10 million in the first quarter of 2024 due to the accelerated realization of the earnout provided for in the agreement with Basic Resources. Please see Note 5, Divestitures,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Previous wording

We extended in 2022 most of our licensing agreements with G-III Apparel Group, Ltd. for Calvin Klein and TOMMY HILFIGERin the United States and Canada, largely pertaining to the women’s apparel product categories sold at wholesale in North America. These agreements now have staggered expirations through 2027, the first of which occurred at the end of calendar 2023. Upon expiration, we intend to bring most of the licensed product categories in-house and directly operate these businesses. The expiration of these licenses and the transition of previously licensed product categories in-house is not expected to have a material impact on our revenue and net income in 2024.

Current wording

We extended in 2022 most of our licensing agreements with G-III for Calvin Klein and TOMMY HILFIGERin the United States and Canada, largely pertaining to the women’s apparel product categories sold at wholesale in North America. These agreements now have staggered expirations through 2027, the first of which occurred at the end of calendar 2023. Upon expiration, we have been bringing and intend to continue to bring in house a significant portion of the licensed product categories and directly operate these businesses. The expiration of these licenses and the transition of previously licensed women’s product categories in house did not have a material impact on our revenue and net income in 2024. In 2025, the transition of previously licensed product categories in house is expected to result in a less than 1% increase to our revenue and an approximately 50 basis point decline in our gross margin.

Previous wording

There also is a transactional impact of foreign exchange because our foreign subsidiaries purchase inventory in a currency other than their functional currency. We use foreign currency forward contracts to hedge against a portion of the exposure related to this transactional impact. We enter into these contracts up to 18 months in advance for a portion of the projected inventory purchases and may enter into incremental contracts leading up to the time the inventory purchases occur. Therefore, the impact of foreign currency fluctuations on the cost of inventory purchases covered by these contracts may be realized in our results of operations generally up to 18 months following the inception of these hedges, as the underlying inventory hedged by the contracts is sold. We currently expect that the transactional impact of foreign currency on our 2024 net income as compared to 2023 will be immaterial.

Current wording

There also is a transactional impact of foreign exchange because our foreign subsidiaries purchase inventory in a currency other than their functional currency. We use foreign currency forward contracts to hedge against a portion of the exposure related to this transactional impact. We enter into these contracts up to 15 months in advance for a portion of the projected inventory purchases and may enter into incremental contracts leading up to the time the inventory purchases occur. The impact of foreign currency fluctuations on the cost of inventory purchases covered by these contracts is then realized in our results of operations as the underlying inventory hedged by the contracts is sold. We currently expect the transactional impact of foreign currency on our 2025 net income as compared to 2024 will be immaterial.

Previous wording

Our business generally follows a seasonal pattern. Our wholesale businesses tend to generate higher levels of sales in the first and third quarters, while our retail businesses tend to generate higher levels of sales in the fourth quarter. Royalty, advertising and other revenue tends to be earned somewhat evenly throughout the year, although the third quarter tends to have the highest level of royalty revenue due to higher sales by licensees in advance of the holiday selling season. We expect this seasonal pattern will generally continue. Working capital requirements vary throughout the year to support these seasonal patterns and business trends.

Current wording

Our business generally follows a seasonal pattern. Our wholesale businesses tend to generate higher levels of sales in the first and third quarters, while our direct-to-consumer businesses tend to generate higher levels of sales in the fourth quarter. Licensing revenue tends to be earned somewhat evenly throughout the year, although the third quarter tends to have the highest level of revenue due to higher sales by licensees in advance of the holiday selling season. We expect this seasonal pattern will generally continue. Working capital requirements vary throughout the year to support these seasonal patterns and business trends.

Previous wording

Due to the above seasonal factors, our results of operations for the thirteen and thirty-nine weeks ended November 3, 2024 are not necessarily indicative of those for a full fiscal year.

Current wording

Due to the above seasonal factors, our results of operations for the thirteen weeks ended May 4, 2025 are not necessarily indicative of those for a full fiscal year.

Previous wording

Total revenue in the third quarter of 2024 was $2.255 billion compared to $2.363 billion in the third quarter of the prior year. The overall decrease in revenue of $108 million, or 5%, included (i) a 2% decline related to the Heritage Brands intimates transaction and (ii) a 1% positive impact of foreign currency translation, with the following revenue changes in our segments:

Current wording

Total revenue in the first quarter of 2025 was $1.984 billion compared to $1.952 billion in the first quarter of the prior year. The overall increase in revenue of $32 million, or 2%, included an immaterial impact of foreign currency translation.

Previous wording

Our revenue through our direct-to-consumer distribution channel in the thirty-nine weeks ended November 3, 2024 decreased 1%, including a 1% negative foreign currency impact. Revenue in our owned and operated stores was flat compared to the prior year period, including a 1% negative foreign currency impact. Sales through our directly operated digital commerce businesses decreased 5%, including a 1% negative foreign currency impact, primarily due to our planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region. Our revenue through our wholesale distribution channel decreased 11%, primarily due to (i) a 6% decline resulting from the Heritage Brands intimates transaction and (ii) the planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region.

Current wording

•Calvin Klein - Revenue was flat compared to the prior year period, including a 1% negative foreign currency impact.

Previous wording

We currently expect revenue for the fourth quarter of 2024 to decrease approximately 6% to 7%, inclusive of the negative impact of approximately 2% related to foreign currency translation, primarily due to (i) an expected revenue decline in the Tommy Hilfiger International segment driven by the planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region, (ii) a 1% decline related to the Heritage Brands intimates transaction and (iii) a 3% decline related to the 53rd week in 2023. We currently expect revenue for the full year 2024 to decrease approximately 6% to 7% primarily due to (i) an expected revenue decline in the Tommy Hilfiger International segment driven by the planned strategic reduction of sales in Europe to drive overall higher quality of sales in the region, (ii) a 2% decline related to the Heritage Brands intimates transaction and (iii) a 1% decline related to the 53rd week in 2023. The impact of foreign currency translation on our revenue for full year 2024 is not expected to be significant.

Current wording

We currently expect revenue for the full year 2025 will be flat to increase slightly compared to 2024. The impact of foreign currency translation on our revenue for full year 2025 is expected to be immaterial.

Previous wording

Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of product, such as inbound freight costs, purchasing and receiving costs, and inspection costs. Also included as cost of goods sold are the amounts recognized on foreign currency forward contracts as the underlying inventory hedged by such forward exchange contracts is sold. Warehousing and distribution expenses are included in selling, general and administrative (“SG&A”) expenses. All of our royalty, advertising and other revenue from licensing the use of our trademarks is included in gross profit because there is no cost of goods sold associated with such revenue. As a result, our gross profit may not be comparable to that of other entities.

Current wording

Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of product, such as inbound freight costs, purchasing and receiving costs, inspection costs and other product procurement related charges. Also included as cost of goods sold are the amounts recognized on foreign currency forward contracts as the underlying inventory hedged by such forward exchange contracts is sold. Warehousing and distribution expenses are included in selling, general and administrative (“SG&A”) expenses. Revenue from licensing the use of our trademarks is included in gross profit because there is no cost of goods sold associated with such revenue. As a result, our gross profit may not be comparable to that of other entities.

Previous wording

Non-Service Related Pension and Postretirement Income

Current wording

Non-Service Related Pension and Postretirement (Cost) Income

Previous wording

Non-service related pension and postretirement income in the third quarter of 2024 was approximately $400,000 as compared to approximately $500,000 in the third quarter of the prior year. Please see Note 6, “Retirement and Benefit Plans,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Current wording

Non-service related pension and postretirement (cost) income in the first quarter of 2025 was cost of $(1) million as compared to income of approximately $500,000 in the first quarter of the prior year. Please see Note 7, “Retirement and Benefit Plans,” in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Previous wording

Non-service related pension and postretirement income (cost) recorded throughout the year is calculated using actuarial valuations that incorporate assumptions and estimates about financial market, economic and demographic conditions. Differences between estimated and actual results give rise to gains and losses that are recorded immediately in earnings, generally in the fourth quarter of the year, which can create volatility in our results of operations. We currently expect that non-service related pension and postretirement income for the full year 2024 will be immaterial. However, our expectation of 2024 non-service related pension and post-retirement income does not include the impact of an actuarial gain or loss. As a result of the recent volatility in the financial markets, there is significant uncertainty with respect to the actuarial gain or loss we may record on our retirement plans in 2024. We may record a significant actuarial gain or loss in 2024 if there is a significant increase or decrease in discount rates, respectively, or if there is a difference between the actual and expected return on plan assets. As such, our actual 2024 non-service related pension and postretirement income may be significantly different than our projections.

Current wording

Non-service related pension and postretirement (cost) income recorded throughout the year is calculated using actuarial valuations that incorporate assumptions and estimates about financial market, economic and demographic conditions. Differences between estimated and actual results give rise to gains and losses that are recorded immediately in earnings, generally in the fourth quarter of the year, which can create volatility in our results of operations. We currently expect that non-service related pension and postretirement income for the full year 2025 will be immaterial. However, our expectation of 2025 non-service related pension and post-retirement income does not include the impact of an actuarial gain or loss. As a result of the recent volatility in the financial markets, there is significant uncertainty with respect to the actuarial gain or loss we may record on our retirement plans in 2025. We may record a significant actuarial gain or loss in 2025 if there is a significant increase or decrease in discount rates, respectively, or if there is a difference between the actual and expected return on plan assets. As such, our actual 2025 non-service related pension and postretirement income may be significantly different than our projections.

Previous wording

The equity in net income of unconsolidated affiliates was $11 million in the third quarter of 2024 compared to $14 million in the third quarter of the prior year. These amounts relate to our share of income (loss) from (i) our joint venture for the TOMMY HILFIGERand Calvin Klein brands, and certain licensed and formerly PVH-owned trademarks in Mexico, (ii) our joint venture for the TOMMY HILFIGER and Calvin Klein brands in India, (iii) our joint venture for the TOMMY HILFIGER brand in Brazil and (iv) our PVH Legwear LLC joint venture for the TOMMY HILFIGERand Calvin Klein brands and certain licensed and formerly PVH-owned trademarks in the United States and Canada. Our investments in the joint ventures are being accounted for under the equity method of accounting.

Current wording

The equity in net income of unconsolidated affiliates was $10 million in the first quarter of 2025 compared to $13 million in the first quarter of the prior year. These amounts relate to our share of income (loss) from (i) our joint venture for the TOMMY HILFIGERand Calvin Klein brands, and certain licensed trademarks in Mexico, (ii) our joint venture for the TOMMY HILFIGER and Calvin Klein brands in India, (iii) our joint venture for the TOMMY HILFIGER brand in Brazil and (iv) our PVH Legwear LLC joint venture for the TOMMY HILFIGERand Calvin Klein brands and certain licensed trademarks in the United States and Canada. Our investments in the joint ventures are being accounted for under the equity method of accounting.

Previous wording

We currently expect that our equity in net income of unconsolidated affiliates for the fourth quarter and the full year 2024 will be relatively flat as compared to fourth quarter and full year 2023.

Current wording

We currently expect that our equity in net income of unconsolidated affiliates for full year 2025 will be relatively flat as compared to full year 2024.

Previous wording

We file income tax returns in more than 40 international jurisdictions each year. Our tax rate is affected by many factors, including the mix of international and domestic pre-tax earnings, discrete events arising from specific transactions and new regulations, as well as audits by tax authorities and the receipt of new information, any of which can cause us to change our estimate for uncertain tax positions.

Current wording

We file income tax returns in more than 40 international jurisdictions each year. Our tax rate is influenced by several factors, including the mix of international and domestic pre-tax earnings, specific discrete transactions and events, new regulations, audits by tax authorities, and new information received, These elements may lead to adjustments in both our estimate for uncertain tax positions and the overall effective tax rate.

Previous wording

Cash and cash equivalents at November 3, 2024 was $560 million, a decrease of $148 million from $708 million at February 4, 2024. The change in cash and cash equivalents included the impact of (i) $256 million of completed common stock repurchases under the stock repurchase program, (ii) $553 million of net proceeds from the issuance of €525 million principal amount of 4 1/8% senior notes due 2029 and (iii) the $562 million redemption of €525 million principal amount of 3 5/8% senior notes due 2024. We ended the third quarter of 2024 with approximately $1.4 billion of borrowing capacity available under our various debt facilities. The seasonality of our business results in significant fluctuations in our cash balance between fiscal year end and subsequent interim periods due, in part, to the timing of inventory purchases and peak sales periods.

Current wording

Cash and cash equivalents at May 4, 2025 was $191 million, a decrease of $557 million from $748 million at February 2, 2025. The change in cash and cash equivalents included the impact of $561 million paid in connection with ASR agreements and open market purchases to repurchase common stock under the stock repurchase program (please see section entitled “Acquisition of Treasury Shares” below for further discussion). We ended the first quarter of 2025 with approximately $2 billion of borrowing capacity available under our various debt facilities. The seasonality of our business results in significant fluctuations in our cash balance between fiscal year end and subsequent interim periods due, in part, to the timing of inventory purchases and peak sales periods.

Previous wording

Cash flow for the full year 2024 will be impacted by various factors, including, as discussed further below in this “Liquidity and Capital Resources” section, (i) mandatory long-term debt repayments on our term loan under our 2022 senior unsecured credit facilities of approximately $12 million, subject to exchange rate fluctuations, (ii) expected common stock repurchases under our stock repurchase program of approximately $400 million and (iii) expected capital expenditures of approximately $200 million.

Current wording

Cash flow for the full year 2025 will be impacted by various factors, including, as discussed further below in this “Liquidity and Capital Resources” section, (i) common stock repurchases made under our stock repurchase program of $561 million during the first quarter of 2025, (ii) projected capital expenditures of approximately $200 million and (iii) mandatory long-term debt repayments on our term loan under our 2022 senior unsecured credit facilities of approximately $12 million. Additionally, we are exploring alternatives, including refinancing, to fund the repayment of our $500 million senior unsecured notes due in 2025.

Previous wording

As of November 3, 2024, $227 million of cash and cash equivalents was held by international subsidiaries. Our intent is to reinvest indefinitely substantially all of our historical earnings in foreign subsidiaries outside of the United States in jurisdictions in which we would expect to incur material tax costs upon distribution of such amounts. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

Current wording

As of May 4, 2025, $149 million of cash and cash equivalents was held by international subsidiaries. Our intent is to reinvest indefinitely substantially all of our historical earnings in foreign subsidiaries outside of the United States in jurisdictions which we would expect to incur material tax costs upon the distribution of such amounts. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

Previous wording

We received dividends of $42 million and $30 million from our investments in unconsolidated affiliates during the thirty-nine weeks ended November 3, 2024 and October 29, 2023, respectively. These dividends are included in our net cash provided by operating activities in our Consolidated Statements of Cash Flows for the respective period.

Current wording

We received dividends of $26 million and $35 million from our investments in unconsolidated affiliates during the first quarters of 2025 and 2024, respectively. These dividends are included in our net cash used by operating activities in our Consolidated Statements of Cash Flows for the respective period.

Previous wording

We completed the sale of our women’s intimates businesses conducted under the Warner’s, Olga and True&Co. trademarks to Basic Resources on November 27, 2023 for net proceeds of $156 million, which we received in the fourth quarter of 2023. Due to the accelerated realization of the earnout provided for in the agreement with Basic Resources that occurred during the first quarter of 2024, we are receiving additional proceeds of $10 million, which is being paid to us in installments through the first quarter of 2025. We received $5 million of the earnout during the thirty-nine weeks ended November 3, 2024. Please see Note 4, “Divestitures,” in the Notes to Consolidated Financial Statements included in Item 8 of this report for further discussion.

Current wording

We completed the sale of our women’s intimates businesses conducted under the Warner’s, Olga and True&Co. trademarks to Basic Resources on November 27, 2023 for net proceeds of $156 million, which we received in the fourth quarter of 2023. Due to the accelerated realization of the earnout provided for in the agreement with Basic Resources that occurred during the first quarter of 2024, we received additional proceeds of $10 million, which was paid to us in installments through the first quarter of 2025. We received $2.5 million of the earnout during the first quarter of 2025, which was the final installment. Please see Note 5, “Divestitures,” in the Notes to Consolidated Financial Statements included in Item 8 of this report for further discussion.

Previous wording

Our capital expenditures in the thirty-nine weeks ended November 3, 2024 were $115 million compared to $163 million in the thirty-nine weeks ended October 29, 2023. We currently expect that capital expenditures for the full year 2024 will be approximately $200 million as compared to $245 million in 2023 and will primarily consist of (i) investments in (a) new stores and store renovations and (b) our information technology infrastructure worldwide, including information security, (ii) upgrades and enhancements to platforms and systems worldwide, including our digital commerce platforms, and (iii) enhancements to our warehouse and distribution network in Europe and North America.

Current wording

Our capital expenditures in the first quarter of 2025 were $27 million compared to $39 million in the first quarter of 2024. We currently expect that capital expenditures for the full year 2025 will be approximately $200 million as compared to $159 million in 2024 and will primarily consist of (i) investments in (a) new stores and store renovations and (b) our information technology infrastructure worldwide, including information security, (ii) upgrades and enhancements to platforms and systems worldwide, including our digital commerce platforms, and (iii) enhancements to our warehouse and distribution network in Europe and North America.

Previous wording

Cash dividends paid on our common stock totaled $6 million and $7 million during the thirty-nine weeks ended November 3, 2024 and October 29, 2023, respectively.

Current wording

Cash dividends paid on our common stock totaled $2 million in each of the first quarters of 2025 and 2024.

Previous wording

Additionally, we declared a $0.0375 per share dividend on our common stock in the third quarter of 2024 to be paid in the fourth quarter of 2024. We currently project that cash dividends paid on our common stock in 2024 will be approximately $9 million based on our current dividend rate, the number of shares of our common stock outstanding as of November 3, 2024, our estimate of stock to be issued during 2024 under our stock incentive plan and our estimate of stock repurchases for the remainder of 2024.

Current wording

Additionally, we declared a $0.0375 per share dividend on our common stock in the first quarter of 2025 to be paid in the second quarter of 2025. We currently project that cash dividends paid on our common stock in 2025 will be approximately $8 million.

Previous wording

The Board of Directors has authorized over time beginning in 2015 an aggregate $5 billion stock repurchase program through July 30, 2028. Repurchases under the program may be made from time to time over the period through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as we deem appropriate. Purchases are made based on a variety of factors, such as price, corporate requirements and overall market conditions, applicable legal requirements and limitations, trading restrictions under our insider trading policy and other relevant factors. The program may be modified by the Board of Directors, including to increase or decrease the repurchase limitation or extend, suspend, or terminate the program, at any time, without prior notice. Our share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act.

Current wording

The Board of Directors has authorized over time beginning in 2015 an aggregate $5 billion stock repurchase program through July 30, 2028. Repurchases under the program may be made from time to time over the period through open market purchases, accelerated share repurchase programs, privately negotiated transactions or other methods, as we deem appropriate. Purchases are made based on a variety of factors, such as price, corporate requirements and overall market conditions, applicable legal requirements and limitations, trading restrictions under our insider trading policy and other relevant factors. The program may be modified by the Board of Directors, including to increase or decrease the repurchase limitation or extend, suspend or terminate the program, at any time, without prior notice. Our share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act of 2022.

Previous wording

During the thirty-nine weeks ended November 3, 2024 and October 29, 2023, we purchased 2.4 million shares and 3.2 million shares, respectively, of our common stock under the program in open market transactions for $254 million (excluding excise taxes of $2 million) and $268 million (excluding excise taxes of $2 million), respectively. Purchases of $0.4 million were accrued for in our Consolidated Balance Sheet as of November 3, 2024. Purchases of $2 million that were accrued for in our Consolidated Balance Sheet as of February 4, 2024 were paid in the first quarter of 2024. As of November 3, 2024, the repurchased shares were held as treasury stock and $2.019 billion of the authorization remained available for future share repurchases, excluding excise taxes, as the excise taxes do not reduce the authorized amount remaining.

Current wording

In addition, during the first quarter of 2025, we purchased 0.8 million shares and during the first quarter of 2024, we purchased 1.8 million shares of our common stock under the program in open market transactions for $61 million and $200 million, respectively. Excise taxes of $4 million and $2 million were excluded from the share repurchases for these periods, including in respect of the initial deliveries under the ASR agreements. Purchases of $4 million that were accrued for in our Consolidated Balance Sheet as of February 2, 2025 were paid in the first quarter of 2025. As of May 4, 2025, the repurchased shares were held as treasury stock and $1.212 billion of the authorization remained available for future share repurchases, excluding excise taxes, as the excise taxes do not reduce the authorized amount remaining.

Previous wording

Treasury stock activity also includes shares that were withheld principally in conjunction with the settlement of restricted stock units and performance share units to satisfy tax withholding requirements.

Current wording

Treasury stock activity also includes shares that were withheld in conjunction with the settlement of restricted stock units to satisfy tax withholding requirements.

Previous wording

In addition, we had $560 million, $708 million and $358 million of cash and cash equivalents as of November 3, 2024, February 4, 2024 and October 29, 2023, respectively.

Current wording

In addition, we had $191 million, $748 million and $376 million of cash and cash equivalents as of May 4, 2025, February 2, 2025 and May 5, 2024, respectively.

Previous wording

Additionally, we have the ability to borrow under short-term lines of credit, overdraft facilities and short-term revolving credit facilities denominated in various foreign currencies. These facilities provided for borrowings of up to $202 million based on exchange rates in effect on November 3, 2024 and are utilized primarily to fund working capital needs. We had no borrowings outstanding under these facilities as of November 3, 2024.

Current wording

Additionally, we have the ability to borrow under short-term lines of credit, overdraft facilities and short-term revolving credit facilities denominated in various foreign currencies. These facilities provided for borrowings of up to $223 million based on exchange rates in effect on May 4, 2025 and are utilized primarily to fund working capital needs. We had no borrowings outstanding under these facilities as of May 4, 2025.

Previous wording

We have the ability to issue unsecured commercial paper notes with maturities that vary but do not exceed 397 days from the date of issuance primarily to fund working capital needs. We had no borrowings outstanding under the commercial paper note program as of November 3, 2024.

Current wording

We have the ability to issue unsecured commercial paper notes with maturities that vary but do not exceed 397 days from the date of issuance primarily to fund working capital needs. We had $115 million of borrowings outstanding under the commercial paper note program as of May 4, 2025. The weighted average interest rate on funds borrowed under the program as of May 4, 2025 was 5.15%.

Previous wording

Our cash payments for finance lease liabilities totaled $3 million in each of the thirty-nine weeks ended November 3, 2024 and October 29, 2023.

Current wording

Our cash payments for finance lease liabilities totaled $1 million in each of the first quarters of 2025 and 2024.

Previous wording

We made payments totaling $9 million on our term loan under the 2022 facilities in each of the thirty-nine weeks ended November 3, 2024 and October 29, 2023. We currently expect to make total long-term debt repayments of approximately $12 million, subject to exchange rate fluctuations, for the full year 2024.

Current wording

We made payments of $3 million on our term loan under the 2022 facilities in each of the first quarters of 2025 and 2024. We currently expect to make total long-term debt repayments of approximately $12 million, subject to exchange rate fluctuations, for the full year 2025.

Previous wording

We intend to allocate an amount equal to the net proceeds of the offering to finance or refinance new or existing environmental Eligible Projects focused mainly on sustainable materials and packaging and circularity, as defined in the prospectus relating to the notes offering. Pending allocation to Eligible Projects, we utilized the net proceeds of the offering, together with other available funds, to redeem the €525 million principal amount of 3 5/8% senior notes due July 15, 2024, as discussed above.

Current wording

During the first quarter of 2025, we completed the allocation of an amount equal to 100% of the net proceeds of the offering to sustainable materials, which qualify as environmental Eligible Projects (as defined in our prospectus relating to the notes offering). During the first quarter of 2024, we utilized the net proceeds of the offering, together with other available funds, to redeem the €525 million principal amount of 3 5/8% senior notes due July 15, 2024, as discussed above.

Previous wording

Our consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are outlined in Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the year ended February 4, 2024. During the thirty-nine weeks ended November 3, 2024, there were no significant changes to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended February 4, 2024.

Current wording

Our consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are outlined in Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the year ended February 2, 2025. During the first quarter of 2025, there were no significant changes to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended February 2, 2025.