PVH : DE/ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

We aggregate our reporting 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
our Van Heusen, IZOD, ARROW, Warner's, Olga, True&Co. and Geoffrey Beene trademarks, the
Speedo trademark, which we licensed for North America and the Caribbean until April 6,
2020, and other owned and licensed trademarks. References to the brand names TOMMY
HILFIGER, CALVIN KLEIN, Van Heusen, IZOD, ARROW, Warner's, Olga, True&Co. and Geoffrey
Beene and to other 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.



OVERVIEW

The following discussion and analysis is intended to help you understand us, our
operations and our financial performance. It should be read in conjunction with
our consolidated financial statements and the accompanying notes, which are
included in the immediately preceding item of this report.

We are one of the largest global apparel companies in the world and, in March
2020, we marked our 100-year anniversary as a listed company on the New York
Stock Exchange. We manage a diversified brand portfolio, including TOMMY
HILFIGER, CALVIN KLEIN, Van Heusen, IZOD, ARROW, Warner's, Olga, True&Co. and
Geoffrey Beene. We had a perpetual license for Speedo until April 6, 2020. Our
brand portfolio also consists of various other owned, licensed and, to a lesser
extent, private label brands.

Our business strategy is to position our brands to sell globally at various
price points and in multiple channels of distribution. This enables us to offer
products to a broad range of consumers, while minimizing competition among our
brands and reducing our reliance on any one demographic group, product category,
price point, distribution channel or region. We also license the use of our
trademarks to third parties and joint ventures for product categories and in
regions where we believe our licensees' expertise can better serve our brands.

Our revenue was $9.9 billion in 2019, of which over 50% was generated outside of
the United States. Our global lifestyle brands, TOMMY HILFIGER and CALVIN KLEIN,
together generated approximately 85% of our revenue.

RESULTS OF OPERATIONS

COVID-19 Pandemic Update

The COVID-19 pandemic has had, and is expected to continue to have, a significant adverse impact on our business, results of operations, financial condition and cash flows from operations in 2020.

Virtually all of our retail stores were temporarily closed for varying periods
of time throughout the first quarter and into the second quarter of 2020 as a
result of the pandemic. The majority of our retail stores had reopened by
mid-June 2020 but have been operating on reduced hours and at reduced occupancy
levels. Our brick and mortar wholesale customers and licensing partners also
have experienced significant business disruptions as a result of the pandemic,
with several of our North America wholesale customers filing for bankruptcy.
Most of our wholesale customers' stores had reopened the majority of their
locations across all regions by mid-June. However, due to the significant levels
of inventory that remain in their stores, as well as lower traffic and consumer
demand, there has been a sharp reduction in shipments to these customers and we
expect this trend to continue for the balance of the year. Our digital channels,
which have historically represented a less significant portion of our overall
business, have experienced strong demand during the first half of the year
across our traditional and pure play wholesale customers, as well as our own
directly operated digital commerce businesses across all brand businesses and
regions, and these favorable trends have continued into the third quarter.

The COVID-19 pandemic also has impacted some of our suppliers, including third-party manufacturers, logistics providers and other vendors. With some of our partners operating at reduced capacity, we continue to monitor for any potential delays or disruptions in our supply chain and will implement mitigation plans if needed.

Throughout the pandemic, our top priority has been to ensure the health and safety of our associates, consumers and business partners around the world. Accordingly, we have implemented health and safety measures to support high standards in our retail stores, office and distribution centers, including temporary closures, reduced occupancy levels, and social distancing and

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sanitization measures, as well as changes to fitting room use in our stores. We
have incurred additional costs in the second quarter of 2020 associated with
these measures and expect such costs to increase in the second half of 2020.

We took the following actions, some of which are ongoing, to reduce our
operating expenses in response to the pandemic: (i) reducing payroll costs,
including temporary furloughs, salary and incentive compensation reductions,
decreased working hours, and hiring freezes, as well as taking advantage of
COVID-related government payroll subsidy programs primarily in international
jurisdictions, (ii) eliminating or reducing discretionary and variable operating
expenses, including marketing, travel, consulting services, and creative and
design costs, and (iii) reducing rent expense through rent abatements negotiated
with landlords for certain stores affected by temporary closures. In addition,
we announced in July 2020 plans to streamline our North American operations to
better align our business with the evolving retail landscape, including (i) a
reduction in our North America office workforce by approximately 450 positions,
or 12%, across all three brand businesses and corporate functions, which is
expected to result in annual cost savings of approximately $80 million, and (ii)
the exit from our Heritage Brands Retail business by mid-2021.

We have also taken actions to preserve liquidity and strengthen our financial
flexibility. Please see the section entitled "Liquidity and Capital Resources"
below for further discussion.

The impacts of COVID-19 resulted in an unprecedented decline in our revenue and
earnings during the first half of 2020, including $962 million of pre-tax
noncash impairment charges, primarily related to goodwill, as well as increases
in our inventory and inventory-related reserves and our accounts receivable
reserves of $61 million and $56 million, respectively.

While there is significant uncertainty as to the duration and extent of the
impact of the COVID-19 pandemic, we expect the pandemic will continue to have a
significant negative impact on our revenue and net income for the remainder of
2020. The ongoing economic impacts and health concerns associated with the
pandemic are expected to continue to affect consumer behavior, spending levels,
shopping preferences and tourism, and most likely will result in reduced traffic
and consumer spending trends that adversely impact our financial position and
results of operations.

Operations Overview

We generate net sales from (i) the wholesale distribution to retailers,
franchisees, licensees and distributors of dress shirts, neckwear, sportswear
(casual apparel), jeanswear, performance apparel, intimate apparel, underwear,
swimwear, handbags, accessories, footwear and other related products under owned
and licensed trademarks, including through digital commerce sites operated by
our wholesale partners and pure play digital commerce retailers, and (ii) the
sale of certain of these products through (a) approximately 1,810
Company-operated free-standing retail store locations worldwide under our TOMMY
HILFIGER, CALVIN KLEIN and certain of our heritage brands 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 in over 30 countries under our TOMMY HILFIGER and CALVIN KLEIN trademarks
and in the United States through our directly operated digital commerce sites
for True&Co., Van Heusen, IZOD and, until April 6, 2020, Speedo. We announced in
July 2020 a plan to exit our Heritage Brands Retail business, which will result
in the closing of approximately 160 Company-operated retail stores by mid-2021.
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 six reportable segments: (i) Tommy
Hilfiger North America; (ii) Tommy Hilfiger International; (iii) Calvin Klein
North America; (iv) Calvin Klein International; (v) Heritage Brands Wholesale;
and (vi) Heritage Brands Retail.

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We have entered into the following transactions, which impact our results of
operations and comparability among the periods, including our full year 2020
expectations as compared to full year 2019, as discussed in the section entitled
"Results of Operations" below:

•We announced on July 14, 2020 plans to streamline our North American operations
to better align our business with the evolving retail landscape including (i) a
reduction in our office workforce by approximately 450 positions, or 12%, across
all three brand businesses and corporate functions (the "North America workforce
reduction"), which is expected to result in annual cost savings of approximately
$80 million, and (ii) the exit from our Heritage Brands Retail business by
mid-2021. We recorded pre-tax costs of $51 million in the second quarter of
2020, including (i) $38 million related to the North America workforce
reduction, primarily consisting of severance, and (ii) $12 million in connection
with the planned exit from the Heritage Brands Retail business, consisting of $7
million of noncash asset impairments and $5 million of severance and other
costs. We expect to incur additional pre-tax costs of approximately $40 million
in connection with these actions, including (i) $2 million related to the North
America workforce reduction, which is expected to be incurred during the
remainder of 2020, and (ii) $38 million in connection with the planned exit from
our Heritage Brands Retail business, primarily consisting of severance,
accelerated amortization of lease assets and inventory markdowns, of which $21
million is expected to be incurred during the remainder of 2020 and $17 million
is expected to be incurred in 2021. Please see Note 16, "Exit Activity Costs,"
in the Notes to Consolidated Financial Statements included in Part I, Item 1 of
this report for further discussion.

•We entered into a definitive agreement on January 9, 2020 to sell our Speedo
North America business to Pentland Group PLC ("Pentland"), the parent company of
the Speedo brand, and completed the sale of the business on April 6, 2020 for
net proceeds of $169 million (the "Speedo transaction"). Upon the closing of the
transaction, we deconsolidated the net assets of the Speedo North America
business. We recorded a pre-tax noncash loss of $142 million in the fourth
quarter of 2019 in connection with the then-pending Speedo transaction
consisting of (i) a noncash impairment of our perpetual license right for the
Speedo trademark and (ii) a noncash loss to reduce the carrying value of the
business to its estimated fair value, less costs to sell. We recorded an
additional pre-tax noncash loss of $3 million in the first quarter of 2020 upon
the closing of the transaction, consisting of (i) a $6 million noncash loss
resulting from the remeasurement of the loss recorded in the fourth quarter of
2019, primarily due to changes to the net assets of the Speedo North America
business subsequent to February 2, 2020, partially offset by (ii) a $3 million
gain on our retirement plans. The net proceeds from the sale are subject to a
final working capital adjustment based on the terms of the agreement and as
such, the pre-tax noncash loss recorded in connection with the transaction may
be subject to remeasurement in a future period. Please see Note 4, "Acquisitions
and Divestitures," in the Notes to Consolidated Financial Statements included in
Part I, Item 1 of this report for further discussion.

•We entered into agreements on July 3, 2019 to terminate early the licenses for
the global Calvin Klein and Tommy Hilfiger North America socks and hosiery
businesses (the "Socks and Hosiery transaction") in order to consolidate the
socks and hosiery business for all of our brands in the United States and Canada
in a newly formed joint venture, PVH Legwear LLC ("PVH Legwear"), in which we
own a 49% economic interest, and to bring in-house the international Calvin
Klein socks and hosiery wholesale businesses. PVH Legwear was formed with a
wholly owned subsidiary of our former Heritage Brands socks and hosiery
licensee, and has licensed from us since December 2019 the rights to distribute
and sell TOMMY HILFIGER, CALVIN KLEIN, IZOD, Van Heusen and Warner's socks and
hosiery in the United States and Canada. We recorded a pre-tax charge of $60
million in the second quarter of 2019 in connection with these agreements.

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•We completed two acquisitions in the second quarter of 2019. The first
acquisition, which closed on May 31, 2019, was to acquire the approximately 78%
interest in Gazal Corporation Limited ("Gazal") that we did not already own (the
"Australia acquisition"). Prior to the closing, we, along with Gazal, jointly
owned and managed a joint venture, PVH Brands Australia Pty. Limited ("PVH
Australia"), which licensed and operated businesses under the TOMMY HILFIGER,
CALVIN KLEIN and Van Heusen brands, along with other licensed and owned brands.
PVH Australia came under our full control as a result of the acquisition and we
now operate directly those businesses. The aggregate net purchase price for the
shares acquired was $59 million, net of cash acquired and after taking into
account the proceeds from the divestiture to a third party of an office building
and warehouse owned by Gazal in June 2019. The second was our acquisition on
July 1, 2019 of the Tommy Hilfiger retail business in Central and Southeast Asia
from our previous licensee in that market (the "TH CSAP acquisition") for $74
million, as a result of which we now operate directly the Tommy Hilfiger retail
business in the Central and Southeast Asia market. Please see Note 4,
"Acquisitions and Divestitures," in the Notes to Consolidated Financial
Statements included in Part I, Item 1 of this report for further discussion.

In connection with the Australia and TH CSAP acquisitions, we recorded an
aggregate net pre-tax gain of $83 million during 2019, including (i) a noncash
gain of $113 million to write up our existing equity investments in Gazal and
PVH Australia to fair value, partially offset by (ii) $21 million of costs,
primarily consisting of noncash valuation adjustments and one-time expenses
recorded on our equity investments in Gazal and PVH Australia prior to the
Australia acquisition closing, and (iii) a $9 million expense recorded in
interest expense resulting from the remeasurement of our mandatorily redeemable
non-controlling interest that was recognized in connection with the Australia
acquisition. Of the $83 million aggregate net pre-tax gain that was recorded
during 2019, $106 million was recorded during the twenty-six weeks ended August
4, 2019. We recorded a pre-tax expense of $1 million in the twenty-six weeks
ended August 2, 2020 in interest expense resulting from the remeasurement of the
mandatorily redeemable non-controlling interest that was recognized in
connection with the Australia acquisition.

•We entered into a licensing agreement on May 30, 2019 with G-III Apparel Group,
Ltd. ("G-III") for the design, production and wholesale distribution of CALVIN
KLEIN JEANS women's jeanswear collections in the United States and Canada (the
"G-III license"), which resulted in the discontinuation of our directly operated
Calvin Klein North America women's jeanswear wholesale business in 2019.

•We closed our TOMMY HILFIGER flagship and anchor stores in the United States
(the "TH U.S. store closures") in the first quarter of 2019 and recorded pre-tax
costs of $55 million, primarily consisting of noncash lease asset impairments.
Please see Note 12, "Fair Value Measurements," in the Notes to Consolidated
Financial Statements included in Part I, Item 1 of this report for further
discussion of the noncash lease asset impairments.

•We announced on January 10, 2019 a restructuring in connection with strategic
changes for our Calvin Klein business (the "Calvin Klein restructuring"). The
strategic changes included (i) the closure of the CALVIN KLEIN 205 W39 NYC brand
(formerly Calvin Klein Collection), (ii) the closure of the flagship store on
Madison Avenue in New York, New York, (iii) the restructuring of the Calvin
Klein creative and design teams globally, and (iv) the consolidation of
operations for the men's Calvin Klein Sportswear and Calvin Klein Jeans
businesses. All costs related to this restructuring were incurred by the end of
2019. We recorded pre-tax costs of $103 million during 2019 in connection with
the Calvin Klein restructuring, consisting of a $30 million noncash lease asset
impairment resulting from the closure of the flagship store on Madison Avenue in
New York, New York, $26 million of contract termination and other costs, $26
million of severance, $13 million of inventory markdowns and $9 million of other
noncash asset impairments, of which $99 million was incurred during the
twenty-six weeks ended August 4, 2019.

Our Tommy Hilfiger and Calvin Klein businesses each have substantial
international components that expose us to significant foreign exchange
risk. Our Heritage Brands business also has international components but those
components are not significant to the business. Our results of operations in
local foreign currencies are translated into United States dollars using an
average exchange rate over the representative period. Accordingly, our revenue
is unfavorably impacted during times of a strengthening United States dollar
against the foreign currencies in which we generate significant revenue and
favorably impacted during times of a weakening United States dollar against
those currencies. Our earnings are similarly affected by foreign currency
translation in periods that we generate income. However, in periods that we
generate losses, as is currently expected for the full year 2020, the opposite
is true and our results will be favorably impacted by a strengthening United
States dollar against the foreign currencies in which we generate losses and
unfavorably impacted by a weakening United States dollar against those
currencies. Over 50% of our 2019 revenue was subject to foreign currency
translation. We currently expect foreign currency translation to have an
immaterial impact on our revenue in 2020 as compared to 2019.

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There is also a transactional impact on our financial results because inventory
typically is purchased in United States dollars by our foreign subsidiaries. Our
results of operations will be unfavorably impacted during times of a
strengthening United States dollar, as the increased local currency value of
inventory results in a higher cost of goods in local currency when the goods are
sold, and favorably impacted during times of a weakening United States dollar,
as the decreased local currency value of inventory results in a lower cost of
goods in local currency when the goods are sold. We use foreign currency forward
exchange contracts to hedge against a portion of the exposure related to this
transactional impact. The contracts cover at least 70% of the projected
inventory purchases in United States dollars by our foreign subsidiaries. These
contracts are generally entered into 12 months in advance of the related
inventory purchases. Therefore, the impact of fluctuations of the United States
dollar on the cost of inventory purchases covered by these contracts may be
realized in our results of operations in the year following their inception, as
the underlying inventory hedged by the contracts is sold. The strengthening of
the United States dollar against most major currencies in the latter part of
2018 and in 2019, particularly the euro, is expected to negatively impact our
gross margin during 2020. Additionally, there is a transactional impact related
to changes in selling, general and administrative ("SG&A") expenses as a result
of fluctuations in foreign currency exchange rates. We currently expect a
negative transactional impact on our net income in 2020 as compared to 2019.

Further, we have exposure to changes in foreign currency exchange rates related
to our €1.125 billion aggregate principal amount of senior notes that are held
in the United States. The strengthening of the United States dollar against the
euro would require us to use a lower amount of our cash flows from operations to
pay interest and make long-term debt repayments, whereas the weakening of the
United States dollar against the euro would require us to use a greater amount
of our cash flows from operations to pay interest and make long-term debt
repayments. We designated the carrying amount of these senior notes issued by
PVH Corp., a U.S.-based entity, as net investment hedges of our investments in
certain of our foreign subsidiaries that use the euro as their functional
currency. As a result, the remeasurement of these foreign currency borrowings at
the end of each period is recorded in equity.

Retail comparable store sales refer to sales from Company-operated retail stores
that have been open and operated by us for at least 12 months, as well as sales
from Company-operated digital commerce sites for those businesses and regions
that have operated the related digital commerce site for at least 12 months.
Sales from retail stores and Company-operated digital commerce sites that are
shut down during the year are excluded from the calculation of retail comparable
store sales. Sales for retail stores that are relocated, materially altered in
size or closed for a prolonged period of time and sales from Company-operated
digital commerce sites that are materially altered are also excluded from the
calculation of retail comparable store sales until such stores or sites have
been in their new location or in their newly renovated state, as applicable, for
at least 12 months. Retail comparable store sales are based on local currencies
and comparable weeks. Due to the extensive temporary store closures resulting
from the COVID-19 pandemic, retail comparable store sales are not reported for
the thirteen and twenty-six weeks ended August 2, 2020, as we do not believe
this metric is currently meaningful.

SEASONALITY

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. The COVID-19 pandemic has disrupted these patterns, however. We
otherwise expect this seasonal pattern will generally continue. Working capital
requirements vary throughout the year to support these seasonal patterns and
business trends.

Due to the above seasonal factors, as well as the COVID-19 pandemic, our results
of operations for the twenty-six weeks ended August 2, 2020 are not necessarily
indicative of those for a full fiscal year.

Thirteen Weeks Ended August 2, 2020 Compared With Thirteen Weeks Ended August 4, 2019

Total Revenue

Total revenue in the second quarter of 2020 was $1.581 billion as compared to
$2.364 billion in the second quarter of the prior year. The decrease in revenue
of $784 million, or 33%, was due to the impacts of the COVID-19 pandemic on our
business and included the aggregate effect of the following items:

•The reduction of an aggregate $306 million of revenue, or a 28% decrease over the prior year period, attributable to our Tommy Hilfiger International and Tommy Hilfiger North America segments. Tommy Hilfiger International segment revenue decreased 14%, with China showing positive results year over year. Revenue in our Tommy Hilfiger North America segment decreased 51%.

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•The reduction of an aggregate $283 million of revenue, or a 32% decrease over
the prior year period, attributable to our Calvin Klein International and Calvin
Klein North America segments. Calvin Klein International segment revenue
decreased 16%, with China showing positive results year over year. Revenue in
our Calvin Klein North America segment decreased 51%.

•The reduction of an aggregate $194 million of revenue, or a 51% decrease
compared to the prior year period, attributable to our Heritage Brands Retail
and Heritage Brands Wholesale segments, which included a 16% decline resulting
from the April 2020 sale of the Speedo North America business.

Our revenue in the second quarter of 2020 reflected a 40% decline in revenue
through our wholesale distribution channel and a 24% decline in revenue through
our retail distribution channel, which included an 87% increase in sales through
our directly operated digital commerce businesses driven by strong growth across
all brand businesses and regions.

Gross Profit

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 exchange contracts as the underlying inventory
hedged by such forward exchange contracts is sold. Warehousing and distribution
expenses are included in SG&A expenses. All of our royalty, advertising and
other revenue 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.

Gross profit in the second quarter of 2020 was $883 million, or 55.9% of total
revenue, as compared to $1.288 billion, or 54.5% of total revenue, in the second
quarter of the prior year. The 140 basis point gross margin increase was
primarily driven by (i) the absence in 2020 of inventory markdowns that were
recorded in the second quarter of 2019 in connection with the Calvin Klein
restructuring and (ii) the impact of a favorable change in revenue mix of our
International and North America segments, as our International segments revenue
is a larger proportion and generally carry higher gross margins, partially
offset by (iii) the unfavorable impact of the stronger United States dollar on
our international businesses that purchase inventory in United States dollars,
particularly our European businesses, as the increased local currency value of
inventory resulted in higher cost of goods in local currency when the goods were
sold.

SG&A Expenses

SG&A expenses in the second quarter of 2020 were $882 million, or 55.8% of total
revenue, as compared to $1.155 billion, or 48.8% of total revenue, in the second
quarter of the prior year. The significant increase in SG&A expenses as a
percentage of total revenue was principally attributable to (i) the deleveraging
of expenses driven by the significant decline in revenue resulting from the
COVID-19 pandemic, (ii) costs incurred in connection with the planned exit from
our Heritage Brands Retail business and the North America workforce reduction,
(iii) additional accounts receivable reserves recorded as a result of the
pandemic, and (iv) the impact of the change in revenue mix of our International
and North America segments, as our International segments revenue is a larger
proportion and these segments generally carry higher SG&A expenses as
percentages of total revenue. These increases were partially offset by (i) a
reduction in expenses as a result of the cost savings initiatives we implemented
in April 2020, including temporary furloughs, salary and incentive compensation
reductions, and lower discretionary spending, (ii) pandemic-related government
payroll subsidy programs in international jurisdictions, as well as rent
abatements negotiated with certain of our landlords, and (iii) the absence in
2020 of costs that were incurred in the second quarter of 2019 in connection
with the Calvin Klein restructuring and the Socks and Hosiery transaction.

Non-Service Related Pension and Postretirement Income

Non-service related pension and postretirement income in the second quarter of
2020 was $1 million as compared to $2 million in the second quarter of the prior
year. Please see Note 8, "Retirement and Benefit Plans," in the Notes to
Consolidated Financial Statements included in Part I, Item 1 of this report for
further discussion.

Other Noncash (Gain) Loss

We recorded a noncash gain of $113 million in the second quarter of 2019 in
connection with the Australia acquisition. Please see Note 4, "Acquisitions and
Divestitures," in the Notes to Consolidated Financial Statements included in
Part I, Item 1 of this report for further discussion.
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Equity in Net (Loss) Income of Unconsolidated Affiliates

The equity in net (loss) income of unconsolidated affiliates was a $(4) million
loss in the second quarter of 2020 as compared to $1 million of income in the
second quarter of the prior year. These amounts relate to our share of (loss)
income from (i) our joint venture for the TOMMY HILFIGER, CALVIN KLEIN,
Warner's, Olga and Speedo brands in Mexico, (ii) our joint ventures for the
TOMMY HILFIGER brand in India and Brazil, (iii) our joint venture for the CALVIN
KLEIN brand in India, (iv) our PVH Legwear joint venture for the TOMMY HILFIGER,
CALVIN KLEIN, IZOD, Van Heusen and Warner's brands and other owned and licensed
trademarks in the United States and Canada that began operations in December
2019, (v) PVH Australia (prior to acquiring it on May 31, 2019 through the
Australia acquisition) and (iv) our investment in Gazal (prior to acquiring it
on May 31, 2019 through the Australia acquisition). Also included in the prior
year period was our share of the loss from our investment in Karl Lagerfeld
Holding B.V. ("Karl Lagerfeld"). Please see Note 6, "Investments in
Unconsolidated Affiliates," in the Notes to Consolidated Financial Statements
included in Part I, Item 1 of this report for further discussion of our
investment in Karl Lagerfeld.

The equity in net (loss) income for the second quarter of 2020 decreased as
compared to the prior year period primarily due to (i) a reduction in income on
our investments due to the negative impacts of the COVID-19 pandemic on our
unconsolidated affiliates' businesses, partially offset by (ii) the absence in
2020 of one-time expenses of $2 million recorded on our investments in Gazal and
PVH Australia in the second quarter of 2019 prior to the closing of the
Australia acquisition. Our investments in the continuing joint ventures are
being accounted for under the equity method of accounting. Subsequent to the
closing of the Australia acquisition, we began to consolidate the operations of
Gazal and PVH Australia into our financial statements. Please see the section
entitled "Investments in Unconsolidated Affiliates" within "Liquidity and
Capital Resources" below for further discussion.

Interest Expense, Net

Interest expense, net increased to $32 million in the second quarter of 2020
from $27 million in the second quarter of the prior year. Included in interest
expense, net in the second quarter of 2020 is an expense of $5 million resulting
from the remeasurement of our mandatorily redeemable non-controlling interest
that was recognized in connection with the Australia acquisition.

Income Taxes

The effective income tax rate for the second quarter of 2020 was (53.0)%
compared to 13.3% in the second quarter of the prior year. The effective income
tax rate for the second quarter of 2020 reflected an $18 million income tax
expense recorded on $(34) million of pre-tax losses. The effective income tax
rate for the second quarter of 2019 reflected a $30 million income tax expense
recorded on $223 million of pre-tax income.

Our effective income tax rate for the second quarter of 2020 was lower than the
United States statutory income tax rate primarily due to (i) the impact of the
$879 million of pre-tax goodwill impairment charges recorded during the first
quarter of 2020, which were mostly non-deductible for tax purposes and factored
into our annualized effective income tax rate, and resulted in an 14.6% decrease
to our effective income tax rate, (ii) the tax on foreign earnings in excess of
a deemed return on tangible assets of foreign corporations (known as "GILTI")
and (iii) the mix of foreign and domestic pre-tax results, as well as the
distortive impact of these items on our effective income tax rate for the second
quarter of 2020 as a result of the small pre-tax loss during the period.

Our effective income tax rate for the second quarter of 2019 was lower than the
United States statutory income tax rate primarily due to (i) the favorable
impact of a tax exemption on the noncash gain recorded to write up our existing
equity investments in Gazal and PVH Australia to fair value in connection with
the Australia acquisition, which resulted in a benefit to our effective tax rate
of 13.7%, partially offset by (ii) tax effects of GILTI, which more than offset
the benefit of overall lower tax rates in certain international jurisdictions
where we file tax returns.

Redeemable Non-Controlling Interest

We have a joint venture in Ethiopia with Arvind Limited named PVH Manufacturing
Private Limited Company ("PVH Ethiopia") in which we own a 75% interest. We
consolidate the results of PVH Ethiopia in our consolidated financial
statements. PVH Ethiopia was formed to operate a manufacturing facility that
produces finished products for us for distribution primarily in the United
States.

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The net loss attributable to the redeemable non-controlling interest ("RNCI") in
PVH Ethiopia was immaterial in the second quarters of 2020 and 2019. Please see
Note 5, "Redeemable Non-Controlling Interest," in the Notes to Consolidated
Financial Statements included in Part I, Item 1 of this report for further
discussion.

Twenty-Six Weeks Ended August 2, 2020 Compared With Twenty-Six Weeks Ended August 4, 2019

Total Revenue

Total revenue in the twenty-six weeks ended August 2, 2020 was $2.925 billion as
compared to $4.721 billion in the twenty-six week period of the prior year. The
decrease in revenue of $1.796 billion, or 38%, was due to the impacts of the
COVID-19 pandemic on our business and included the aggregate effect of the
following items:

•The reduction of an aggregate $712 million of revenue, or a 33% decrease over the prior year period, attributable to our Tommy Hilfiger International and Tommy Hilfiger North America segments. Tommy Hilfiger International segment revenue decreased 23%. Revenue in our Tommy Hilfiger North America segment decreased 51%.

•The reduction of an aggregate $696 million of revenue, or 39% decrease over the
prior year period, attributable to our Calvin Klein International and Calvin
Klein North America segments. Calvin Klein International segment revenue
decreased 28%. Revenue in our Calvin Klein North America segment decreased 52%.

•The reduction of an aggregate $388 million of revenue, or a 49% decrease
compared to the prior year period, attributable to our Heritage Brands Retail
and Heritage Brands Wholesale segments, which included a 13% decline resulting
from the April 2020 sale of the Speedo North America business.

Our revenue in the twenty-six-weeks ended August 2, 2020 reflected a 40% decline
in revenue through our wholesale distribution channel and a 35% decline in
revenue through our retail distribution channel, which included a 70% increase
in sales through our directly operated digital commerce businesses driven by
strong growth across all brand businesses and regions.

There is significant uncertainty with respect to the impacts for 2020 of the
COVID-19 pandemic on our business and the businesses of our licensees and other
business partners. We currently expect that revenue for the full year 2020 will
decrease significantly as compared to 2019, including the 38% decline in revenue
in the first half of 2020 and an expected decline in revenue of approximately
25% in the second half of 2020, primarily due to the negative impacts to our
businesses caused by the pandemic. This revenue decline for the full year 2020
also includes an expected decrease of approximately $200 million due to the
aggregate net effect of (i) reductions resulting from the Speedo transaction,
which closed on April 6, 2020, and the G-III license, which commenced in 2019,
partially offset by (ii) an addition of revenue resulting from the Australia and
TH CSAP acquisitions, which closed in the second quarter of 2019.

Gross Profit

Gross profit in the twenty-six weeks ended August 2, 2020 was $1.549 billion, or
53.0% of total revenue, as compared to $2.584 billion, or 54.7% of total
revenue, in the twenty-six week period of the prior year. The 170 basis point
gross margin decrease was primarily driven by (i) additional inventory reserves
recorded in the first quarter of 2020 as a result of the COVID-19 pandemic and
(ii) the unfavorable impact of the stronger United States dollar on our
international businesses that purchase inventory in United States dollars,
particularly our European businesses, as the increased local currency value of
inventory resulted in higher cost of goods in local currency when the goods were
sold, partially offset by (iii) the impact of a favorable change in revenue mix
of our International and North America segments, as our International segments
revenue is a larger proportion and generally carry higher gross margins.

There is significant uncertainty with respect to the impacts for 2020 of the
COVID-19 pandemic on our business and the businesses of our licensees and other
business partners. We currently expect that gross margin for the full year 2020
will decrease as compared to 2019, with gross margin in the second half of 2020
expected to be relatively flat compared to gross margin of 53.0% in the first
half of 2020. The expected decline in full year 2020 gross margin is primarily
due to (i) the need for increased promotional selling and inventory liquidation
as a result of the impact of the pandemic and (ii) the unfavorable impact of the
stronger United States dollar on our international businesses that purchase
inventory in United States dollars, particularly our European businesses, as the
increased local currency value of inventory results in higher cost of goods in
local currency when the goods are sold.

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SG&A Expenses

SG&A expenses in the twenty-six weeks ended August 2, 2020 were $1.822 billion,
or 62.3% of total revenue, as compared to $2.316 billion, or 49.1% of total
revenue, in the twenty-six week period of the prior year. The significant
increase in SG&A expenses as a percentage of total revenue was principally
attributable to (i) the deleveraging of expenses driven by the significant
decline in revenue resulting from the COVID-19 pandemic, (ii) the pre-tax
noncash impairments of our store assets resulting from the impacts of the
pandemic on our business, (iii) costs incurred in connection with the planned
exit from our Heritage Brands Retail business and the North America workforce
reduction, (iv) additional accounts receivable reserves recorded as a result of
the pandemic and (v) the impact of the change in revenue mix of our
International and North America segments, as our International segments revenue
is a larger proportion and generally carry higher SG&A expenses as percentages
of total revenue. These increases were partially offset by (i) a reduction in
expenses as a result of the cost savings initiatives we implemented in April
2020, including temporary furloughs, salary and incentive compensation
reductions, and lower discretionary spending, (ii) pandemic-related government
payroll subsidy programs primarily in international jurisdictions, as well as
rent abatements negotiated with certain of our landlords, and (iii) the absence
in 2020 of costs that were incurred in the twenty-six weeks ended August 4, 2019
in connection with the Calvin Klein restructuring, the Socks and Hosiery
transaction and the TH U.S store closures.

There is significant uncertainty with respect to the impacts of the COVID-19
pandemic on our business and our SG&A expenses may be subject to significant
material change. We currently expect our SG&A expenses for the full year 2020
will be significantly lower as compared to 2019 as a result of the cost savings
initiatives we implemented in April 2020, as well as pandemic-related government
payroll subsidy programs primarily in international jurisdictions and rent
abatements, although the impact to the second half of 2020 will be less
pronounced as certain initiatives, including furloughs, COVID-related government
payroll subsidy programs and rent abatements, were substantially completed in
the second quarter of 2020. Also contributing to the reduction in our SG&A
expenses for the full year 2020 is (i) the absence in 2020 of costs related to
the Calvin Klein restructuring, the Socks and Hosiery transaction and the TH
U.S. store closures, partially offset by (ii) the pre-tax noncash impairments of
our store assets resulting from the impacts of the pandemic on our business,
(iii) costs incurred in connection with the planned exit from our Heritage
Brands Retail business and (iv) the additional accounts receivable reserves
recorded as a result of the pandemic. However, we expect our SG&A expenses as a
percentage of total revenue for the full year 2020 will increase significantly
as compared to 2019 primarily due to a deleveraging of expenses driven by the
expected decline in revenue resulting from the COVID-19 pandemic.

Goodwill and Other Intangible Asset Impairments

We recorded noncash impairment charges of $933 million during the twenty-six
weeks ended August 2, 2020 resulting from the impacts of the COVID-19 pandemic
on our business, including $879 million related to goodwill and $54 million
related to other intangible assets, primarily our ARROW and Geoffrey Beene
tradenames. The impairments resulted from interim impairment assessments of our
goodwill and other intangible assets, which we were required to perform in the
first quarter of 2020 due to the adverse impacts of the pandemic on our current
and estimated future business results and cash flows, as well as the significant
decrease in our market capitalization as a result of a sustained decline in our
common stock price. Please see Note 7, "Goodwill and Other Intangible Assets,"
in the Notes to Consolidated Financial Statements included in Part I, Item 1 of
this report for further discussion.

Non-Service Related Pension and Postretirement Income

Non-service related pension and postretirement income was $4 million in each of the twenty-six weeks ended August 2, 2020 and August 4, 2019.

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 2020 will be approximately $11 million. However, our expectation of 2020
non-service related pension and post-retirement income does not include the
impact of an actuarial gain or loss. If recent market volatility due, in part,
to the impact of the COVID-19 pandemic continues, we may incur a significant
actuarial loss in 2020 as a result of the difference between actual and expected
returns on plan assets or if there is a decline in discount rates. Our actual
2020 non-service related pension and postretirement income (cost) may be
significantly different than our projections. Non-service related pension and
postretirement (cost) was $(90) million in 2019, and included a $98 million
actuarial loss on our retirement plans recorded in the fourth quarter.

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Debt Modification and Extinguishment Costs

We incurred costs totaling $5 million during the twenty-six weeks ended August 4, 2019 in connection with the refinancing of our senior credit facilities. Please see the section entitled "Liquidity and Capital Resources" below for further discussion.

Other Noncash (Gain) Loss

We recorded a noncash loss of $3 million during the twenty-six weeks ended August 2, 2020 in connection with the Speedo transaction. Please see Note 4, "Acquisitions and Divestitures," in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

We recorded a noncash gain of $113 million in the twenty-six weeks ended August 4, 2019 to write up our equity investments in Gazal and PVH Australia to fair value in connection with the Australia acquisition. Please see Note 4, "Acquisitions and Divestitures," in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Equity in Net (Loss) Income of Unconsolidated Affiliates

The equity in net (loss) income of unconsolidated affiliates was a $(15) million
loss in the twenty-six weeks ended August 2, 2020 as compared to $5 million of
income in the twenty-six-week period of the prior year. These amounts relate to
our share of (loss) income from (i) our joint venture for the TOMMY HILFIGER,
CALVIN KLEIN, Warner's, Olga and Speedo brands in Mexico, (ii) our joint
ventures for the TOMMY HILFIGER brand in India and Brazil, (iii) our joint
venture for the CALVIN KLEIN brand in India, (iv) our PVH Legwear joint venture
for the TOMMY HILFIGER, CALVIN KLEIN, IZOD, Van Heusen and Warner's brands and
other owned and licensed trademarks in the United States and Canada that began
operations in December 2019, (v) PVH Australia (prior to acquiring it on May 31,
2019 through the Australia acquisition) and (vi) our investments in Gazal (prior
to acquiring it on May 31, 2019 through the Australia acquisition) and Karl
Lagerfeld (prior to its impairment in the first quarter of 2020). Please see
Note 6, "Investments in Unconsolidated Affiliates," in the Notes to Consolidated
Financial Statements included in Part I, Item 1 of this report for further
discussion of our investment in Karl Lagerfeld. The equity in net (loss) income
for the twenty-six weeks ended 2020 decreased as compared to the prior year
period primarily due to (i) a $12 million pre-tax noncash impairment of our
investment in Karl Lagerfeld recorded in the first quarter of 2020 resulting
from the impacts of the COVID-19 pandemic on its business, and (ii) a reduction
in income on our investments due to the negative impacts of the COVID-19
pandemic on our unconsolidated affiliates' businesses. Our investments in the
continuing joint ventures are being accounted for under the equity method of
accounting. Subsequent to the closing of the Australia acquisition, we began to
consolidate the operations of Gazal and PVH Australia into our financial
statements. Please see the section entitled "Investments in Unconsolidated
Affiliates" within "Liquidity and Capital Resources" below for further
discussion.

We currently expect that our equity in net income of unconsolidated affiliates
for the full year 2020 will decrease as compared to 2019 primarily due to (i)
the impairment of our investment in Karl Lagerfeld recorded in the first quarter
of 2020, (ii) a reduction in income on our investments due to the negative
impacts of the COVID-19 pandemic on our unconsolidated affiliates' businesses in
2020, partially offset by (iii) an increase in income on our investment in PVH
Legwear as compared to 2019, due to the recognition of a full year of income in
2020, and (iv) the absence in 2020 of one-time expenses of $2 million recorded
on our investments in Gazal and PVH Australia prior to the closing of the
Australia acquisition.

Interest Expense, Net

Interest expense, net decreased to $53 million in the twenty-six weeks ended
August 2, 2020 from $57 million in the twenty-six week period of the prior year
primarily due to lower interest rates on our senior unsecured credit facilities
as compared to the prior year period.

We currently expect that interest expense, net for the full year 2020 will be
relatively flat as compared to 2019 primarily due to (i) the issuance in April
2020 of an additional €175 million principal amount of 3 5/8% senior notes due
2024 and in July 2020 of $500 million principal amount of 4 5/8% senior notes
due 2025, partially offset by (ii) an expected decrease in the expense recorded
on remeasurement of our mandatorily redeemable non-controlling interest that was
recognized in connection with the Australia acquisition.

Income Taxes

The effective income tax rate for the twenty-six weeks ended August 2, 2020 was 9.8% compared to 16.3% in the twenty-six week period of the prior year. The effective income tax rate for the twenty-six weeks ended August 2, 2020 reflected a $(125)

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million income tax benefit recorded on $(1.273) billion of pre-tax losses. The
effective income tax rate for the twenty-six weeks ended August 4, 2019
reflected a $53 million income tax expense recorded on $328 million of pre-tax
income.

Our effective income tax rate for the twenty-six weeks ended August 2, 2020 was
lower than the United States statutory income tax rate primarily due to (i) the
impact of the $879 million of pre-tax goodwill impairment charges, which were
mostly non-deductible for tax purposes and resulted in a 9.8% decrease in our
effective income tax rate, (ii) the tax effects of GILTI and (iii) the mix of
foreign and domestic pre-tax results. The pre-tax goodwill impairment charges
were factored into our annualized effective income tax rate and, as such, will
have a corresponding impact on our quarterly effective income tax rates for the
remainder of 2020.

Our effective income tax rate for the twenty-six weeks ended August 4, 2019 was
lower than the United States statutory income tax rate primarily due to (i) the
favorable impact of a tax exemption on the noncash gain recorded to write up our
existing equity investments in Gazal and PVH Australia to fair value in
connection with the Australia acquisition, which resulted in a benefit to our
effective tax rate of 8.5%, partially offset by (ii) the tax effects of GILTI,
which more than offset the benefit of overall lower tax rates in certain
international jurisdictions where we file tax returns.

In response to the COVID-19 pandemic, local governments enacted measures to
provide aid and economic stimulus to companies. On March 27, 2020, the United
States government enacted the Coronavirus Aid, Relief, and Economic Security Act
(the "CARES Act"), which includes various income tax provisions aimed at
providing economic relief. We currently expect a slight favorable cash flow
impact in 2020 as a result of the deferral of income tax payments under the
CARES Act and other local government relief initiatives. We also considered the
significant adverse impact of the pandemic on our business in assessing the
realizability of our deferred tax assets. Based on this assessment, we
determined that no additional valuation allowances were needed against our
deferred tax assets. However, we will continue to monitor the impacts on our
ability to realize our deferred tax assets.

We file income tax returns in more than 40 international jurisdictions each
year. A substantial amount of our earnings are in international jurisdictions,
particularly the Netherlands and Hong Kong, where income tax rates, coupled with
special rates levied on income from certain of our jurisdictional activities,
are lower than the United States statutory income tax rate.

Given the significant uncertainty with respect to the impacts of the COVID-19 pandemic on our business and results of operations, we have not provided an estimate of our effective income tax rate for the full year 2020.

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.

RNCI

The net loss attributable to the RNCI was immaterial in the twenty-six weeks
ended August 2, 2020 and August 4, 2019. We currently expect that the net loss
attributable to the RNCI for the full year 2020 will be immaterial. Please see
Note 5, "Redeemable Non-Controlling Interest," in the Notes to Consolidated
Financial Statements included in Part 1, Item 1 of this report for further
discussion.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Update

The COVID-19 pandemic has had, and is expected to continue to have, a
significant adverse impact on our business, results of operations, financial
condition and cash flows in 2020. While there is significant uncertainty about
the duration and extent of the impacts of the pandemic, we expect there will be
a significant negative impact to our cash flows from operations in 2020,
resulting from a loss of revenue and earnings. Given the unprecedented impacts
of the pandemic on our business, we have taken the following actions to
strengthen our financial position:

•Issued $500 million principal amount of 4 5/8% senior notes due 2025 in July
2020.
•Obtained a waiver in June 2020 of the leverage and interest coverage ratios
under our senior unsecured credit facilities (referred to as the "June 2020
Amendment").
•Issued an additional €175 million principal amount of 3 5/8% senior notes due
2024 in April 2020.
•Entered into a $275 million 364-day revolving credit facility in April 2020.
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•Suspended our cash dividend beginning with the second quarter.
•Suspended share repurchases under the stock repurchase program in mid-March,
following $111 million in repurchases completed in the first quarter.
•Focused management of our working capital, with particular focus on
inventories, including reducing and cancelling inventory commitments,
redeploying basic inventory items to subsequent seasons and consolidating future
seasonal collections, as well as negotiating extended payment terms with our
suppliers.
•Reduced expected capital expenditures for the full year 2020 to approximately
$190 million from $345 million in 2019.

We ended the second quarter of 2020 with $1.4 billion of cash on hand and
approximately $1.4 billion of borrowing capacity available under our various
debt facilities. We believe that we have taken appropriate actions to manage
through the uncertainty related to the COVID-19 pandemic and are continuously
reevaluating all aspects of our spending and cash flow generation as the
situation evolves.

Cash Flow Summary

Cash and cash equivalents at August 2, 2020 was $1.394 billion, an increase of
$891 million from the amount at February 2, 2020 of $503 million. The change in
cash and cash equivalents included the impact of (i) $111 million of common
stock repurchases under the stock repurchase program (with no further
repurchases for the remainder of 2020), (ii) $169 million of net proceeds in
connection with the Speedo transaction, (iii) $186 million of net proceeds from
the issuance of an additional €175 million principal amount of 3 5/8% senior
notes due 2024 and (iv) $495 million of net proceeds from the issuance of $500
million principal amount of 4 5/8% senior notes due 2025.

Cash flow for the full year 2020 will be impacted by various factors in addition
to those noted above and below in this "Liquidity and Capital Resources"
section. Given the dynamic nature of the COVID-19 pandemic, our estimates of
cash flows in 2020 may be subject to material significant change, including as a
result of the impacts of the pandemic on our 2020 earnings, additional
borrowings under existing or new financing arrangements, excess inventories,
delays in collection of, or inability to collect on, certain trade receivables,
and other working capital changes that we may experience as a result of the
pandemic.

As of August 2, 2020, approximately $723 million of cash and cash equivalents
was held by international subsidiaries. Our intent is to reinvest indefinitely
substantially all of our earnings in foreign subsidiaries outside of the United
States. However, if management decides at a later date to repatriate these
earnings to the United States, we may be required to accrue and pay additional
taxes, including any applicable foreign withholding tax and United States state
income taxes. 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.

Operations

Cash provided by operating activities was $248 million in the twenty-six weeks
ended August 2, 2020 compared to $318 million in the twenty-six weeks ended
August 4, 2019. The decrease in cash provided by operating activities as
compared to the prior year period was primarily driven by a significant decrease
in net (loss) income as adjusted for noncash charges, partially offset by a
favorable change in our working capital, including favorable changes in (i)
trade receivables, primarily driven by a decline in our wholesale revenue, as
well as an increase in our reserves due to the impact on us of the COVID-19
pandemic, (ii) inventories, primarily due to focused management of our
inventory, including reducing and cancelling inventory commitments, and (iii)
accounts payable, primarily due to extended vendor payment terms. Our cash flows
from operations in the twenty-six weeks ended August 2, 2020 was significantly
impacted by widespread temporary store closures and other significant adverse
impacts of the COVID-19 pandemic. In an effort to mitigate the impacts of the
pandemic and preserve liquidity, we have been and continue to be focused on
working capital management, in particular tightly managing inventories,
including reducing and cancelling inventory commitments, redeploying basic
inventory items to subsequent seasons and consolidating future seasonal
collections, as well as negotiating extended payment terms with our suppliers.

Capital Expenditures

Our capital expenditures in the twenty-six weeks ended August 2, 2020 were $108
million compared to $151 million in the twenty-six weeks ended August 4, 2019.
We currently expect capital expenditures for the full year 2020 will decrease to
approximately $190 million from $345 million in 2019, as we tightly manage
spending to preserve liquidity in response to the impacts of the COVID-19
pandemic on our business, and will include only certain minimum required
expenditures in our retail
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stores and expenditures for projects currently in progress, primarily related to
(i) investments to support the multi-year upgrade of our platforms and systems
worldwide and (ii) enhancements to our warehouse and distribution network.

Investments in Unconsolidated Affiliates

We made a payment of $2 million in the third quarter of 2020 to our PVH Legwear
joint venture to contribute our share of the joint venture funding. We currently
do not expect to make any further payments to contribute our share of our joint
ventures funding during the remainder of 2020.

We received dividends of $10 million from our investments in unconsolidated
affiliates during the twenty-six weeks ended August 4, 2019. These dividends are
included in our net cash provided by operating activities in our Consolidated
Statements of Cash Flows for the period.

Speedo Transaction

We completed the sale of our Speedo North America business to Pentland on April
6, 2020 for net proceeds of $169 million. The net proceeds from the sale are
subject to a final working capital adjustment based on the terms of the
agreement and as such, are subject to change in a future period. Please see Note
4, "Acquisitions and Divestitures," in the Notes to Consolidated Financial
Statements included in Part I, Item 1 of this report for further discussion.

TH CSAP Acquisition

We completed the acquisition of the Tommy Hilfiger retail business in Central and Southeast Asia on July 1, 2019 for $74 million. Please see Note 4, "Acquisitions and Divestitures," in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this report for further discussion.

Australia Acquisition

We completed the Australia acquisition on May 31, 2019. This transaction
resulted in a net cash payment of $59 million, including (i) a payment of $118
million, net of cash acquired of $7 million, as cash consideration for the
acquisition and (ii) proceeds of $59 million related to the sale of an office
building and warehouse owned by Gazal. Please see Note 4, "Acquisitions and
Divestitures," in the Notes to Consolidated Financial Statements included in
Part I, Item 1 of this report for further discussion.

Mandatorily Redeemable Non-Controlling Interest

The Australia acquisition agreement provided for key executives of Gazal and PVH
Australia to exchange a portion of their interests in Gazal for approximately 6%
of the outstanding shares of our previously wholly owned subsidiary that
acquired 100% of the ownership interests in the Australia business. We are
obligated to purchase this 6% interest within two years of the acquisition
closing in two tranches as follows: tranche 1 - 50% of the shares one year after
the closing, but the holders had the option to defer half of this tranche to
tranche 2; and tranche 2 - all remaining shares two years after the closing.
With respect to tranche 1, the holders elected not to defer their shares and, as
a result, we purchased all of the tranche 1 shares in June 2020 for $17 million
(based on exchange rates in effect on the payment date). The purchase price for
the tranche 1 and tranche 2 shares is based on a multiple of the subsidiary's
adjusted earnings before interest, taxes, depreciation and amortization
("EBITDA") less net debt as of the end of the measurement year, and the multiple
varies depending on the level of EBITDA compared to a target. The $17 million
payment for the tranche 1 shares was presented in the Consolidated Statement of
Cash Flows as follows: (i) $13 million as a financing cash flow, which
represents the initial fair value of the liability recognized for the tranche 1
shares on the acquisition date, and (ii) $5 million, attributable to interest,
as an operating cash flow.

The liability for the mandatorily redeemable non-controlling interest was $19
million as of August 2, 2020 based on exchange rates in effect on that date,
which related to tranche 2 shares and was included in accrued expenses in our
Consolidated Balance Sheet. Please see Note 4, "Acquisitions and Divestitures,"
in the Notes to Consolidated Financial Statements included in Part I, Item 1 of
this report for further discussion.

Dividends

Dividends on common stock totaled $3 million in the twenty-six weeks ended August 2, 2020 as compared to $9 million in the twenty-six weeks ended August 4, 2019.

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Following the payment of a $0.0375 per common share dividend on March 31, 2020,
we suspended our dividends in order to increase our cash position and preserve
financial flexibility in response to the impacts of the COVID-19 pandemic on our
business. In addition, under the terms of the June 2020 Amendment, dividend
payments are not permitted during the relief period (as defined below). Please
see the section entitled "2019 Senior Unsecured Credit Facilities" below for
further discussion.

Acquisition of Treasury Shares

Our Board of Directors has authorized over time since 2015 an aggregate $2 billion stock repurchase program through June 3, 2023. 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.

We suspended share repurchases under the stock repurchase program beginning in
mid-March 2020, following the purchase of 1 million shares in open market
transactions for $111 million completed in the first quarter, in order to
increase our cash position and preserve financial flexibility in response to the
impacts of the COVID-19 pandemic on our business. In addition, under the terms
of the June 2020 Amendment, share repurchases are not permitted during the
relief period (as defined below). Please see the section entitled "2019 Senior
Unsecured Credit Facilities" below for further discussion. The existing stock
repurchase program remains authorized by the Board of Directors and we may
resume share repurchases after the restrictions under the June 2020 Amendment
lapse.

Repurchases under the program, when it is being used, 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.

During the twenty-six weeks ended August 4, 2019, the Company purchased 1
million shares of its common stock under the program in open market transactions
for $127 million. Purchases of $2 million were accrued for in the Consolidated
Balance Sheet as of August 4, 2019. Purchases of $500,000 that were accrued for
in the Consolidated Balance Sheet as of February 2, 2020 were paid in the first
quarter of 2020. As of August 2, 2020, the repurchased shares were held as
treasury stock and $573 million of the authorization remained available for
future share repurchases.

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.

Financing Arrangements

Our capital structure was as follows:
(In millions)                        8/2/20       2/2/20       8/4/19
Short-term borrowings               $    71      $    50      $  183

Current portion of long-term debt        15           14          41
Finance lease obligations                14           15          15
Long-term debt                        3,498        2,694       2,743
Stockholders' equity                  4,583        5,811       5,872



Short-Term Borrowings

We have the ability to draw revolving borrowings under the senior unsecured
credit facilities discussed below in the section entitled "2019 Senior Unsecured
Credit Facilities." We had no borrowings outstanding under these facilities as
of August 2, 2020. The maximum amount of revolving borrowings temporarily
outstanding under these facilities during the twenty-six weeks ended August 2,
2020 was $746 million.

We also have the ability to draw revolving borrowings under our 364-day unsecured revolving credit facility discussed below in the section entitled "2020 Unsecured Revolving Credit Facility." We had no borrowings outstanding under this facility as of or during the twenty-six weeks ended August 2, 2020.

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
$236 million based on
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exchange rates in effect on August 2, 2020 and are utilized primarily to fund
working capital needs. We had $71 million outstanding under these facilities as
of August 2, 2020. The weighted average interest rate on funds borrowed as of
August 2, 2020 was 2.02%. The maximum amount of borrowings outstanding under
these facilities during the twenty-six weeks ended August 2, 2020 was $97
million.

Commercial Paper

We have the ability to issue, from time to time, 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 August 2, 2020. The
maximum amount of borrowings temporarily outstanding under the program during
the twenty-six weeks ended August 2, 2020 was $165 million.

The commercial paper program allows for borrowings of up to $675 million to the
extent that we have borrowing capacity under the United States
dollar-denominated revolving credit facility included in the 2019 facilities (as
defined below). Accordingly, the combined aggregate amount of (i) borrowings
outstanding under the commercial paper note program and (ii) the revolving
borrowings outstanding under the United States dollar-denominated revolving
credit facility at any one time cannot exceed $675 million. The maximum
aggregate amount of borrowings outstanding under the commercial paper program
and the United States dollar-denominated portion of the revolving credit
facility during the twenty-six weeks ended August 2, 2020 was $660 million.

2020 Unsecured Revolving Credit Facility

On April 8, 2020, we entered into a 364-day $275 million United States
dollar-denominated unsecured revolving credit facility (the "2020 facility"). We
may increase the commitment under the 2020 facility by an aggregate amount not
to exceed $100 million, subject to certain customary conditions. The 2020
facility will mature on April 7, 2021. We paid $2 million of debt issuance costs
in connection with the 2020 facility.

Currently, our obligations under the 2020 facility are unsecured and are not
guaranteed by any of our subsidiaries. However, within 120 days after the
occurrence of a specified credit ratings decrease (as set forth in the 2020
facility), (i) we must cause each of our wholly owned United States subsidiaries
(subject to certain customary exceptions) to become a guarantor under the 2020
facility and (ii) we and each subsidiary guarantor will be required to grant
liens in favor of the collateral agent on substantially all of our respective
assets (subject to customary exceptions).

The outstanding borrowings under the 2020 facility are prepayable at any time
without penalty (other than customary breakage costs). The borrowings under the
2020 facility bear interest at a rate equal to an applicable margin plus, as
determined at our option, either (a) a base rate determined by reference to the
greater of (i) the prime rate, (ii) the United States federal funds effective
rate plus 1/2 of 1.00% and (iii) a one-month reserve adjusted Eurocurrency rate
plus 1.00% or (b) an adjusted Eurocurrency rate, calculated in a manner set
forth in the 2020 facility.

The current applicable margin with respect to the borrowings as of August 2,
2020 was 2.250% for adjusted Eurocurrency rate loans and 1.250% for base rate
loans. The applicable margin for borrowings is subject to adjustment based upon
our public debt rating after the date of delivery of notice of a change in our
public debt rating by Standard & Poor's and Moody's.

We had no borrowings outstanding under the 2020 facility during the twenty-six weeks ended August 2, 2020.

The 2020 facility requires us to comply with affirmative, negative and financial
covenants, including a minimum interest coverage ratio and maximum net leverage
ratio, which are subject to change in the event that, and in the same manner as,
the minimum interest coverage ratio and maximum net leverage ratio covenants
under the 2019 facilities are amended. We amended the 2019 facilities in June
2020 (referred to as the "June 2020 Amendment"). Refer to the section entitled
"2019 Senior Unsecured Credit Facilities" below for further discussion.

Finance Lease Liabilities

Our cash payments for finance lease liabilities totaled $3 million in each of the twenty-six weeks ended August 2, 2020 and August 4, 2019.

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2016 Senior Secured Credit Facilities

On May 19, 2016, we entered into an amendment to our senior secured credit
facilities (as amended, the "2016 facilities"). We replaced the 2016 facilities
with new senior unsecured credit facilities on April 29, 2019 as discussed in
the section entitled "2019 Senior Unsecured Credit Facilities" below. The 2016
facilities, as of the date they were replaced, consisted of a $2.347 billion
United States dollar-denominated Term Loan A facility and senior secured
revolving credit facilities consisting of (i) a $475 million United States
dollar-denominated revolving credit facility, (ii) a $25 million United States
dollar-denominated revolving credit facility available in United States dollars
and Canadian dollars and (iii) a €186 million euro-denominated revolving credit
facility available in euro, British pound sterling, Japanese yen and Swiss
francs.

2019 Senior Unsecured Credit Facilities

We refinanced the 2016 facilities on April 29, 2019 (the "Closing Date") by
entering into senior unsecured credit facilities (the "2019 facilities"), the
proceeds of which, along with cash on hand, were used to repay all of the
outstanding borrowings under the 2016 facilities, as well as the related debt
issuance costs.

The 2019 facilities consist of a $1.093 billion United States dollar-denominated
Term Loan A facility (the "USD TLA facility"), a €500 million euro-denominated
Term Loan A facility (the "Euro TLA facility" and together with the USD TLA
facility, the "TLA facilities") and senior unsecured revolving credit facilities
consisting of (i) a $675 million United States dollar-denominated revolving
credit facility, (ii) a CAD $70 million Canadian dollar-denominated revolving
credit facility available in United States dollars or Canadian dollars, (iii) a
€200 million euro-denominated revolving credit facility available in euro,
British pound sterling, Japanese yen, Swiss francs, Australian dollars and other
agreed foreign currencies and (iv) a $50 million United States
dollar-denominated revolving credit facility available in United States dollars
or Hong Kong dollars. The 2019 facilities are due on April 29, 2024. In
connection with the refinancing of our senior credit facilities, we paid debt
issuance costs of $10 million (of which $3 million was expensed as debt
modification costs and $7 million is being amortized over the term of the debt
agreement) and recorded debt extinguishment costs of $2 million to write off
previously capitalized debt issuance costs.

Each of the senior unsecured revolving credit facilities, except for the $50
million United States dollar-denominated revolving credit facility available in
United States dollars or Hong Kong dollars, also include amounts available for
letters of credit and have a portion available for the making of swingline
loans. The issuance of such letters of credit and the making of any swingline
loan reduces the amount available under the applicable revolving credit
facility. So long as certain conditions are satisfied, we may add one or more
senior unsecured term loan facilities or increase the commitments under the
senior unsecured revolving credit facilities by an aggregate amount not to
exceed $1.5 billion. The lenders under the 2019 facilities are not required to
provide commitments with respect to such additional facilities or increased
commitments.

We had loans outstanding of $1.601 billion, net of debt issuance costs and based
on applicable exchange rates, under the TLA facilities, no borrowings
outstanding under the senior unsecured revolving credit facilities and $24
million of outstanding letters of credit under the senior unsecured revolving
credit facilities as of August 2, 2020.

The terms of the TLA facilities require us to make quarterly repayments of
amounts outstanding under the 2019 facilities, which commenced with the calendar
quarter ended September 30, 2019. Such required repayment amounts equal 2.50%
per annum of the principal amount outstanding on the Closing Date for the first
eight calendar quarters following the Closing Date, 5.00% per annum of the
principal amount outstanding on the Closing Date for the four calendar quarters
thereafter and 7.50% per annum of the principal amount outstanding on the
Closing Date for the remaining calendar quarters, in each case paid in equal
installments and in each case subject to certain customary adjustments, with the
balance due on the maturity date of the TLA facilities. The outstanding
borrowings under the 2019 facilities are prepayable at any time without penalty
(other than customary breakage costs). Any voluntary repayments we make would
reduce the future required repayment amounts.

We made payments of $7 million on our term loans under the 2019 facilities
during the twenty-six weeks ended August 2, 2020, and we expect to make
mandatory long-term debt repayments of approximately $14 million during the full
year 2020. We made no payments on our term loans under the 2019 facilities and
2016 facilities during the twenty-six weeks ended August 4, 2019 other than the
repayment of the 2016 facilities in connection with the refinancing of the 2016
senior credit facilities.

The United States dollar-denominated borrowings under the 2019 facilities bear
interest at a rate equal to an applicable margin plus, as determined at our
option, either (a) a base rate determined by reference to the greater of (i) the
prime rate, (ii) the United States federal funds effective rate plus 1/2 of
1.00% and (iii) a one-month reserve adjusted Eurocurrency rate plus 1.00% or (b)
an adjusted Eurocurrency rate, calculated in a manner set forth in the 2019
facilities.

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The Canadian dollar-denominated borrowings under the 2019 facilities bear
interest at a rate equal to an applicable margin plus, as determined at our
option, either (a) a Canadian prime rate determined by reference to the greater
of (i) the rate of interest per annum that Royal Bank of Canada establishes as
the reference rate of interest in order to determine interest rates for loans in
Canadian dollars to its Canadian borrowers and (ii) the average of the rates per
annum for Canadian dollar bankers' acceptances having a term of one month or (b)
an adjusted Eurocurrency rate, calculated in a manner set forth in the 2019
facilities.

Borrowings available in Hong Kong dollars under the 2019 facilities bear interest at a rate equal to an applicable margin plus an adjusted Eurocurrency rate, calculated in a manner set forth in the 2019 facilities.

The borrowings under the 2019 facilities in currencies other than United States
dollars, Canadian dollars or Hong Kong dollars bear interest at a rate equal to
an applicable margin plus an adjusted Eurocurrency rate, calculated in a manner
set forth in the 2019 facilities.

The current applicable margin with respect to the TLA facilities and each
revolving credit facility as of August 2, 2020 was 1.625% for adjusted
Eurocurrency rate loans and 0.625% for base rate or Canadian prime rate loans,
which reflects an increase of 0.25% as set forth in the June 2020 Amendment (as
defined below). The applicable margin for borrowings under the TLA facilities
and the revolving credit facilities is subject to adjustment (i) after the date
of delivery of the compliance certificate and financial statements, with respect
to each of our fiscal quarters, based upon our net leverage ratio or (ii) after
the date of delivery of notice of a change in our public debt rating by Standard
& Poor's or Moody's.

We entered into interest rate swap agreements designed with the intended effect
of converting notional amounts of our variable rate debt obligation to fixed
rate debt. Under the terms of the agreements, for the outstanding notional
amount, our exposure to fluctuations in the one-month LIBOR is eliminated and we
pay a fixed rate plus the current applicable margin. The following interest rate
swap agreements were entered into or in effect during the twenty-six weeks ended
August 2, 2020 and/or August 4, 2019:

(In millions)

                                                                                        Notional Amount
                                                               Initial 

Notional Outstanding as of

   Designation Date               Commencement Date                 Amount              August 2, 2020             Fixed Rate              Expiration Date
      March 2020                    February 2021              $           50          $            -                0.562%                 February 2023
     February 2020                  February 2021                          50                       -               1.1625%                 February 2023
     February 2020                  February 2020                          50                      50               1.2575%                 February 2023
      August 2019                   February 2020                          50                      50               1.1975%                 February 2022
       June 2019                    February 2020                          50                      50                1.409%                 February 2022
       June 2019                      June 2019                            50                      50                1.719%                   July 2021
     January 2019                   February 2020                          50                      50               2.4187%                 February 2021
     November 2018                  February 2019                         139                     127               2.8645%                 February 2021
     October 2018                   February 2019                         116                     160               2.9975%                 February 2021
       June 2018                     August 2018                           50                      50               2.6825%                 February 2021
       June 2017                    February 2018                         306                       -                1.566%                 February 2020



The notional amounts of the outstanding interest rate swaps that commenced in
February 2019 are adjusted according to pre-set schedules during the terms of
the swap agreements such that, based on our projections for future debt
repayments, our outstanding debt under the USD TLA facility is expected to
always equal or exceed the combined notional amount of the then-outstanding
interest rate swaps.

Our 2019 facilities require us to comply with customary affirmative, negative
and financial covenants including a minimum interest coverage ratio and a
maximum net leverage ratio. Given the disruption to our business caused by the
COVID-19 pandemic and to ensure financial flexibility, we amended these
facilities in June 2020 to provide temporary relief of certain financial
covenants until the date on which a compliance certificate is delivered for the
second quarter of 2021 (the "relief period") unless we elect earlier to
terminate the relief period and satisfy the conditions for doing so (the "June
2020 Amendment"). The June 2020 Amendment provides for the following during the
relief period, among other things, the (i) suspension of compliance with the
maximum net leverage ratio through and including the first quarter of 2021, (ii)
suspension of the minimum interest coverage ratio through and including the
first quarter of 2021, (iii) addition of a minimum liquidity
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covenant of $400 million, (iv) addition of a restricted payment covenant and (v)
imposition of stricter limitations on the incurrence of indebtedness and liens.
The limitation on restricted payments requires that we suspend payments of
dividends on our common stock and purchases of shares under our stock repurchase
program during the relief period. The June 2020 Amendment also provides that
during the relief period the applicable margin will be increased 0.25%. In
addition, under the June 2020 Amendment, in the event there is a specified
credit ratings downgrade by Standard & Poor's and Moody's during the relief
period (as set forth in the June 2020 Amendment), within 120 days thereafter (i)
we must cause each of our wholly owned United States subsidiaries (subject to
certain customary exceptions) to become a guarantor under the 2019 facilities
and (ii) we and each subsidiary guarantor will be required to grant liens in
favor of the collateral agent on substantially all of our respective assets
(subject to customary exceptions). As of August 2, 2020, we were in compliance
with all applicable financial and non-financial covenants (as amended) under
these facilities.

We expect to maintain compliance with the financial covenants (as amended) under
the 2019 facilities for at least the next 12 months based on our current
forecasts. If the adverse impacts of the COVID-19 pandemic on our business
worsen and our earnings and operating cash flows do not recover as currently
estimated by us, there can be no assurance that we will be able to maintain
compliance with our financial covenants (as amended) in the future. There can be
no assurance that we would be able to obtain future waivers in a timely manner,
on terms acceptable to us, or at all. If we were not able to maintain compliance
or obtain a future covenant waiver under our credit facilities, there can be no
assurance that we would be able to raise sufficient debt or equity capital, or
divest assets, to refinance or repay such facilities.

7 3/4% Debentures Due 2023

We have outstanding $100 million of debentures due November 15, 2023 that accrue
interest at the rate of 7 3/4%. The debentures are not redeemable at our option
prior to maturity.

3 5/8% Euro Senior Notes Due 2024

We have outstanding €525 million principal amount of 3 5/8% senior notes due
July 15, 2024, of which €175 million principal amount was issued on April 24,
2020. Interest on the notes is payable in euros. We paid €3 million ($3 million
based on exchange rates in effect on the payment date) of fees in connection
with the issuance of the additional €175 million notes. We may redeem some or
all of these notes at any time prior to April 15, 2024 by paying a "make whole"
premium plus any accrued and unpaid interest. In addition, we may redeem some or
all of these notes on or after April 15, 2024 at their principal amount plus any
accrued and unpaid interest.

4 5/8% Senior Notes Due 2025

We issued on July 10, 2020 $500 million principal amount of 4 5/8% senior notes
due July 10, 2025. The interest rate payable on the notes is subject to
adjustment if either Standard & Poor's or Moody's, or any substitute rating
agency, as defined in the indenture governing the notes, downgrades the credit
rating assigned to the notes. We incurred $6 million of fees, of which $5
million were paid during the second quarter of 2020 in connection with the
issuance of the notes. We may redeem some or all of these notes at any time
prior to June 10, 2025 by paying a "make whole" premium plus any accrued and
unpaid interest. In addition, we may redeem some or all of these notes on or
after June 10, 2025 at their principal amount plus any accrued and unpaid
interest.

Our ability to create liens on our assets or engage in sale/leaseback transactions is restricted as defined in the indenture governing the notes.

3 1/8% Euro Senior Notes Due 2027

We have outstanding €600 million principal amount of 3 1/8% senior notes due
December 15, 2027. Interest on the notes is payable in euros. We may redeem some
or all of these notes at any time prior to September 15, 2027 by paying a "make
whole" premium plus any accrued and unpaid interest. In addition, we may redeem
some or all of these notes on or after September 15, 2027 at their principal
amount plus any accrued and unpaid interest.

Our financing arrangements contain financial and non-financial covenants and
customary events of default. As of August 2, 2020, we were in compliance with
all applicable financial and non-financial covenants under our financing
arrangements.

As of August 2, 2020, our issuer credit was rated BBB- by Standard & Poor's with
a negative outlook and our corporate credit was rated Baa3 by Moody's with a
stable outlook, and our commercial paper was rated A-3 by Standard & Poor's and
P-3 by Moody's. In assessing our credit strength, we believe that both Standard
& Poor's and Moody's considered, among other
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things, our capital structure and financial policies, our consolidated balance
sheet, our historical acquisition activity and other financial information, as
well as industry and other qualitative factors.

Please see Note 9, "Debt," in the Notes to Consolidated Financial Statements
included in Part I, Item 1 of this report for a schedule of mandatory long-term
debt repayments for the remainder of 2020 through 2025.

Please see Note 9, "Debt," 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, 2020 for further discussion of our debt.

CRITICAL ACCOUNTING POLICIES

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, 2020.

Goodwill and Indefinite-lived Intangible Assets Impairment Testing

We assess the recoverability of goodwill and other indefinite-lived intangible
assets annually, at the beginning of the third quarter of each fiscal year, and
between annual tests if an event occurs or circumstances change that would
indicate that it is more likely than not that the carrying amount may be
impaired. Impairment testing for goodwill is done at the reporting unit level.
Impairment testing for other indefinite-lived intangible assets is done at the
individual asset level. Intangible assets with finite lives are amortized over
their estimated useful life and are tested for impairment, along with other
long-lived assets, when events and circumstances indicate that the assets might
be impaired. Indefinite-lived intangible assets and intangible assets with
finite lives are tested for impairment prior to assessing the recoverability of
goodwill.

Goodwill

We determined in the first quarter of 2020 that the significant adverse impact
of the COVID-19 pandemic on our business, including an unprecedented decline in
revenue and earnings and an extended decline in our stock price and associated
market capitalization, was a triggering event that required us to perform a
quantitative interim goodwill impairment test.

As a result of the interim test performed, we recorded $879 million of noncash
impairment charges in the first quarter of 2020, which was included in goodwill
and other intangible asset impairments in our Consolidated Statement of
Operations. The impairment charges, which related to the Heritage Brands
Wholesale, Calvin Klein Retail North America, Calvin Klein Wholesale North
America, Calvin Klein Licensing and Advertising International, and Calvin Klein
International reporting units, were recorded to our segments as follows: $198
million in the Heritage Brands Wholesale segment, $287 million in the Calvin
Klein North America segment, and $394 million in the Calvin Klein International
segment. Our impairment assessment was performed in accordance with the
accounting guidance adopted in the first quarter of 2020 that simplifies the
testing for goodwill impairment, as discussed in Note 21, "Recent Accounting
Guidance."

Of these reporting units, Calvin Klein Wholesale North America, Calvin Klein
Licensing and Advertising International, and Calvin Klein International were
determined to be partially impaired. The remaining carrying amount of goodwill
allocated to these reporting units as of the date of our interim test was $162
million, $143 million and $347 million, respectively. Holding all other
assumptions used in the interim test constant, a 100 basis point change in the
annual revenue growth rate assumptions for these businesses would result in a
change to the estimated fair value of the reporting units of approximately $80
million, $20 million and $140 million, respectively. Likewise, a 100 basis point
change in the weighted average cost of capital would result in a change to the
estimated fair value of the reporting units of approximately $60 million, $15
million and $125 million, respectively. While these reporting units were not
determined to be fully impaired in the first quarter of 2020, they may be at
risk of further impairment in the future in the event the related businesses do
not perform as projected, including if they fail to recover as planned following
the COVID-19 pandemic, or if market factors utilized in the impairment analysis
deteriorate, including an unfavorable change in long-term growth rates or the
weighted average cost of capital.

With respect to our other reporting units that were not determined to be
impaired, the Tommy Hilfiger International reporting unit had an estimated fair
value that exceeded its carrying amount as of the date of our interim test of
$2,949 million by 5%. The carrying amount of goodwill allocated to this
reporting unit was $1,558 million. Holding all other assumptions used in the
interim test constant, a 100 basis point change in the annual revenue growth
rate of the Tommy Hilfiger International business would result in a change to
the estimated fair value of the reporting unit of approximately $355 million.
Likewise, a 100 basis point change in the weighted average cost of capital would
result in a change to the estimated fair value of the reporting unit of
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approximately $320 million. While the Tommy Hilfiger International reporting
unit was not determined to be impaired in the first quarter of 2020, it may be
at risk of future impairment in the event the related business does not perform
as projected, including if it fails to recover as planned following the COVID-19
pandemic, or if market factors utilized in the impairment analysis deteriorate,
including an unfavorable change in the long-term growth rate or the weighted
average cost of capital.

The fair value of the reporting units for goodwill impairment testing was
determined using an income approach and validated using a market approach. The
income approach was based on discounted projected future (debt-free) cash flows
for each reporting unit. The discount rates applied to these cash flows were
based on the weighted average cost of capital for each reporting unit, which
takes market participant assumptions into consideration. Estimated future
operating cash flows included in the interim test in the first quarter of 2020
were discounted at rates of 10%, 10.5% or 11%, depending on the reporting unit,
to account for the relative risks of the estimated future cash flows. For the
market approach, used to validate the results of the income approach method, we
used both the guideline company and similar transaction methods. The guideline
company method analyzes market multiples of revenue and EBITDA for a group of
comparable public companies. The market multiples used in the valuation are
based on the relative strengths and weaknesses of the reporting unit compared to
the selected guideline companies. Under the similar transactions method,
valuation multiples are calculated utilizing actual transaction prices and
revenue and EBITDA data from target companies deemed similar to the reporting
unit. We classified the fair values of our reporting units as Level 3 fair value
measurements due to the use of significant unobservable inputs.

There have been no events or change in circumstances during the second quarter
of 2020 that would indicate the remaining carrying amount of our goodwill may be
impaired as of August 2, 2020. There is still significant uncertainty about the
duration and extent of the impacts of the COVID-19 pandemic. If economic
conditions caused by the pandemic do not recover as currently estimated by
management or market factors utilized in the impairment analysis deteriorate, we
could incur additional goodwill impairment charges in the future.

Indefinite-Lived Intangible Assets

We also determined in the first quarter of 2020 that the impact of the COVID-19
pandemic on our business was a triggering event that prompted the need to
perform interim impairment testing of our indefinite-lived intangible assets.
For the TOMMY HILFIGER, CALVIN KLEIN, Van Heusen, Warner's and Olga tradenames
and the reacquired perpetual license rights for TOMMY HILFIGER in India, we
elected to first assess qualitative factors to determine whether it was more
likely than not that the fair value of any asset was less than its carrying
amount. For these assets, no impairment was identified as a result of our annual
indefinite-lived intangible asset impairment test for 2019 and the fair values
of these indefinite-lived intangible assets substantially exceeded their
carrying amounts. The asset with the least excess fair value had an estimated
fair value that exceeded its carrying amount by approximately 85% as of the date
of our 2019 annual test. Considering this and other factors, we determined
qualitatively that it was not more likely than not that the fair values of these
indefinite-lived intangible assets were less than their carrying amounts and
concluded that the quantitative impairment test in the first quarter of 2020 was
not required.

For the ARROW and Geoffrey Beene tradenames and the reacquired perpetual license
rights recorded in connection with the Australia acquisition, we elected to
bypass the qualitative assessment and proceeded directly to the quantitative
impairment test. As a result of this quantitative interim impairment testing, we
recorded $47 million of noncash impairment charges in the first quarter of 2020
to write down the two tradenames. This included $36 million to write down the
ARROW tradename, which had a carrying amount as of the date of our interim test
of $79 million, to a fair value of $43 million, and $12 million to write down
the Geoffrey Beene tradename, which had a carrying amount of $17 million, to a
fair value of $5 million. The $47 million of impairment charges recorded in the
first quarter of 2020 was included in goodwill and other intangible asset
impairments in our Consolidated Statement of Operations and allocated to our
Heritage Brands Wholesale segment. Holding all other assumptions used in the
interim test constant, a 100 basis point change in the annual revenue growth
rate of the Arrow business would result in a change to the estimated fair value
of the tradename of approximately $5 million. Likewise, a 100 basis point change
in the weighted average cost of capital would result in a change to the
estimated fair value of the tradename of approximately $5 million. Holding all
other assumptions used in the interim test constant, a 100 basis point change to
the annual revenue growth rate or weighted average cost of capital in the
Geoffrey Beene business would result in an immaterial change to the estimated
fair value of the tradename.

With regard to the reacquired perpetual license rights recorded in connection
with the Australia acquisition, we determined in the first quarter of 2020 that
its fair value substantially exceeded its carrying amount and, therefore, the
asset was not impaired.

The fair value of the ARROW and Geoffrey Beene tradenames was determined using
an income-based relief-from-royalty method. Under this method, the value of an
asset is estimated based on the hypothetical cost savings that accrue as a
result of not having to license the tradename from another party. These cash
flows are discounted to present value using a discount rate
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that factors in the relative risk of the intangible asset. We discounted the
cash flows used to value the ARROW and Geoffrey Beene tradenames at a rate of
10%. The fair value of our reacquired perpetual license rights recorded in
connection with the Australia acquisition was determined using an income
approach, which estimates the net cash flows directly attributable to the
subject intangible asset. These cash flows are discounted to present value using
a discount rate that factors in the relative risk of the intangible asset. We
discounted the cash flows used to value the reacquired perpetual license rights
recorded in connection with the Australia acquisition at a rate of 10%. We
classified the fair values of these indefinite-lived intangible assets as Level
3 fair value measurements due to the use of significant unobservable inputs.

There have been no events or change in circumstances during the second quarter
of 2020 that would indicate the remaining carrying amount of our
indefinite-lived intangible assets may be impaired as of August 2, 2020. There
is still significant uncertainty about the duration and extent of the impacts of
the COVID-19 pandemic. If economic conditions caused by the pandemic do not
recover as currently estimated by management or market factors utilized in the
impairment analysis deteriorate, we could incur additional indefinite-lived
intangible asset impairment charges in the future.

Recently Adopted Accounting Guidance

We adopted, effective the first quarter of 2020, accounting guidance related to
credit losses, that introduces a new impairment model used to measure credit
losses for certain financial assets measured at amortized cost, including trade
and other receivables. This guidance requires entities to record an allowance
for credit losses using a forward-looking expected loss impairment model that
considers historical experience, current conditions, and reasonable and
supportable forecasts that affect collectibility, rather than the incurred loss
model required under existing guidance. We also adopted, effective the first
quarter of 2020, accounting guidance related to goodwill impairment, which
eliminates the requirement to calculate the implied fair value of goodwill to
measure the amount of the goodwill impairment charge, if any, under the second
step of the goodwill impairment test. Please see Note 21, "Recent Accounting
Guidance," in the Notes to Consolidated Financial Statements included in Part I,
Item 1 of this report for further discussion.

During the twenty-six weeks ended August 2, 2020, 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, 2020, except for the items
mentioned above.


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