PVH Corp (PVH)

Cash conversion cycle

		Feb 28, 2025	Feb 29, 2024	Feb 4, 2024	Feb 28, 2023	Jan 29, 2023
Days of inventory on hand (DOH)	days	156.87	134.44	134.44	168.65	168.65
Days of sales outstanding (DSO)	days	—	—	31.41	—	37.36
Number of days of payables	days	—	—	101.65	—	124.19
Cash conversion cycle	days	156.87	134.44	64.21	168.65	81.82

February 28, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 156.87 + — – —
= 156.87

The cash conversion cycle of PVH Corp has shown fluctuations over the period under review. At the start of the analysis in January 2023, the company had a relatively efficient cash conversion cycle of 81.82 days, indicating that it takes approximately 81.82 days for PVH to convert its investments in inventory back into cash.

However, by February 2023, the cash conversion cycle had increased significantly to 168.65 days, suggesting that PVH was taking longer to convert its inventory into sales and then subsequently into cash during that period. This prolonged cycle may have resulted in increased working capital needs and potential liquidity challenges for the company.

By February 2024, there was a notable improvement in the cash conversion cycle, which decreased to 64.21 days. This reduction indicates that PVH was able to optimize its inventory management and collection processes, leading to a quicker conversion of inventory investments into cash receipts.

Nevertheless, by the end of February 2024 and into February 2025, the cash conversion cycle started to lengthen again to 134.44 days and 156.87 days, respectively. These longer cycles suggest a potential slowdown in sales or difficulties in managing operational processes efficiently, which could impact the company's liquidity position and working capital management.

Overall, PVH Corp should focus on streamlining its inventory, sales, and collection processes to reduce the cash conversion cycle and improve its cash flow efficiency in the long run.