PVH Corp. expects to significantly improve its tariff mitigation performance in 2026 as it prepares for continued pressure from U.S. trade policy and higher duty costs.
During its fourth-quarter 2025 earnings call, the company said it had offset 30% of the gross margin impact from tariffs in 2025 and now expects to double that figure to 60% in 2026. Interim CFO and executive vice president of global financial planning and analysis Melissa Stone said the group also expects to enter 2027 with tariff mitigation reaching 75% on an annualised basis.
Stone said mitigation actions are already in motion and are expected to build quarter by quarter through 2026 as the company works towards fully offsetting the tariff burden over time.
PVH, the parent company of Calvin Klein and Tommy Hilfiger, projects gross tariff costs of $195 million this year. That forecast is based on an assumed baseline duty rate of 15%, matching the high end of levels floated by the Trump administration.
At present, most goods entering the U.S. face a 10% baseline tariff imposed in February after the Supreme Court invalidated earlier levies. Although President Donald Trump has indicated he would raise the rate to 15%, that increase has not yet been implemented.
Stone also said PVH is not building any possible tariff refunds into its full-year forecast, taking a conservative planning approach.
The company is not alone. Williams-Sonoma has taken a similar line, excluding possible refunds from its 2026 guidance and instead assuming that existing tariff conditions will either remain in place or be replaced by similar measures.
Across the retail sector, mitigation strategies are converging. Companies are relying on supplier negotiations, re-sourcing, price adjustments, supply chain efficiencies and cost-reduction measures. Gap, Newell Brands and American Eagle have all expressed confidence in their own tariff playbooks.
PVH has said previously that it is working with vendors and its wider supply base to blunt the impact of tariffs. Former CFO Zac Coughlin spoke about those efforts at Goldman Sachs’ Global Retailing Conference in September, although the company has not disclosed the precise mitigation measures it is currently using.
