At PVH, owner of the Tommy Hilfiger and Calvin Klein brands, the company’s inventory tells the story of its sector as counterveiling supply chain trends play out.

The apparel company’s inventory levels were 34% at the end of Q4. Part of that rise is the comparison to the late 2021 period, when PVH and peers were struggling to get inventory into ports and warehouses amid widespread freight snarls and other supply constraints.

In that respect, the inventory bounce is a positive. “We have seen steady progress over the course of 2022 towards pre-pandemic production capacity and significantly improved delivery times,” PVH CFO Zac Coughlin told analysts last week. “And in the fourth quarter this year, we experienced much earlier receipts of inventory as these supply chain and logistics disruptions had eased.”

Coughlin went on to note that the increased product flowing through a much-loosened supply chain created sales opportunities for PVH through its wholesale channel to retailers.

But, at the same time, earlier receipts did lead to an excess in the company’s view. PVH simultaneously felt “the full impact” of higher product costs, though PVH expects those costs to ease over the course of 2023, Coughlin said.

The story is similar to what others in the apparel industry have reported since Q4 ended. At Under Armour, for example, inventory was up 50%, in part because capacity and speed returned to supply chains in the latter part of the year.

The flip side to that story is the reason why supply chains have slackened — i.e., the downshift in consumer demand and company purchasing in nearly every discretionary sector. Along with faster receipts, apparel brands and retailers are still having trouble selling product to inflation-wary consumers, even after multiple quarters of discounting.

PVH’s gross margin fell by about two and a half percentage points in Q4 due to both ocean freight rates — which executives expect to come rapidly this year — and increased discounting. CEO Stefan Larsson described a “very promotional holiday period, given elevated inventory levels across the market.”

Despite the drop, PVH’s margins came in ahead of analyst expectations as did its operating expenses, making for what Telsey Advisory Group analysts called a “strong operational beat” of forecasts.

So far for 2023, Coughlin said the company’s inventory levels have normalized outside of the early timing of receipts. More than 90% of PVH’s spring season shipments in North America were delivered on time, compared to 32% at the start of 2021, which Larsson attributed to “our improved supply chain leadership.”