Breaking News

PVH Corp (PVH) Moves Up The Charts: Will Growth Continue?

By Zacks Investment ResearchStock MarketsApr 01, 2019 09:13PM ET
PVH Corp (PVH) Moves Up The Charts: Will Growth Continue?
By Zacks Investment Research   |  Apr 01, 2019 09:13PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

PVH Corp. (NYSE:PVH) has been benefiting from its diversified brand portfolio, particularly the Tommy Hilfiger brand. Also, the company has been experiencing robust momentum in the international business, mainly backed by solid growth in Europe and Asia. Improved trends in the company’s North American business, especially the wholesale unit, are also contributing to the company’s results.

In fourth-quarter fiscal 2018, PVH Corp delivered impressive results, wherein earnings and revenues surpassing the Zacks Consensus Estimate. In fact, this marks the company’s 19th straight quarter of bottom-line beat. Earnings also improved on a year-over-year basis. Further, management issued an encouraging view for first-quarter and fiscal 2019. Markedly, the stock has gained approximately 13% since the announcement of its quarterly results on Mar 27. (Read: PVH Corp Q4 Earnings Beat Estimates, Revenues Down Y/Y)

Moreover, the Zacks Consensus Estimate has been witnessing an uptrend. We note that the consensus mark for first-quarter and fiscal 2019 have moved north by 5 cents and 9 cents to $2.44 and $10.32, respectively, over the past seven days.

In the past three months, shares of this Zacks Rank #3 (Hold) company have surged roughly 38%, outperforming the industry’s 25.8% growth.

Factors Behind PVH Corp’s Solid Performance

PVH Corp’s diversified brand portfolio allows it to stay ahead of its peers, generate above-average industry growth and sustain its position in the current challenging environment. Moreover, the company’s approach to brand management facilitates each of its brands to develop further through effective marketing strategies, financial control and operating leverage. Based on the strength of many of its brands, particularly Tommy Hilfiger, coupled with opportunities with regard to distribution, we believe that the company is poised for long-term growth.

Recently, the company agreed to reacquire the Tommy Hilfiger brand’s license in Central and South East Asia from Dickson Concepts (International) Limited. Notably, the transaction is in sync with the company’s strategy of having direct control over its brands, which also covers licensed businesses. Through the latest agreement, PVH Corp will be able to leverage growth opportunities in the Central and South East Asian region. Further, the company expects its Asia Pacific platform to aid expansion of the Tommy Hilfiger brand in Greater China. The enhancement of this brand will be backed by further investments for introducing other product lines and expanding brand presence.

Upbeat View

After a solid end to fiscal 2018, PVH Corp is optimistic about the prospects in fiscal 2019. The company expects fiscal 2019 revenues to benefit from the completion of pending acquisitions of 78% interest in Gazal Corporation Limited and the Tommy Hilfiger retail business in Hong Kong, and certain other countries in Central and Southeast Asia from Dickson Concepts (International) Limited during second-quarter fiscal 2019. These transactions are likely to augment revenues by $150 million in fiscal 2019. As a result, the company expects 4% revenue growth (up 5% in constant currency) in the fiscal year.

Brand-wise, sales are anticipated to increase roughly 6%, 2% and 3% for the Tommy Hilfiger, Calvin Klein and Heritage Brands businesses, respectively. Moreover, sales at Tommy Hilfiger and Calvin Klein are likely to grow 8% and 3% each, on a constant-currency basis. Further, it envisions adjusted earnings per share of $10.30-$10.40 for fiscal 2019, with GAAP earnings of $8.90-$9.00.

Possible Deterrents

PVH Corp is grappling with softness in its Calvin Klein business over the past few quarters. This, in turn, has been weighing on the company’s consolidated sales, which dipped nearly 1% in fourth-quarter fiscal 2018. PVH Corp’s Calvin Klein business reported a 2% sales decline in the fourth quarter due to the inclusion of an additional week in fiscal 2017 and soft results in North America.

Nevertheless, Calvin Klein is poised to witness growth of about $12 billion in global retail sales in the next few years. Calvin Klein’s strategy unfolds three key initiatives that include the redesigning of the CALVIN KLEIN 205W39NYC business, adopting the digital-first model and streamlining its North America business.

We expect all afore-mentioned factors to continue bolstering the company’s performance and help it sustain momentum.

Key Picks

G-III Apparel Group, Ltd. (NASDAQ:GIII) outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Columbia Sportswear Company (NASDAQ:COLM) has a long-term earnings growth rate of 10.9% and a Zacks Rank #1.

Ralph Lauren Corporation (NYSE:RL) has a long-term earnings growth rate of 10.3% and a Zacks Rank #2 (Buy).

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>

G-III Apparel Group, LTD. (GIII): Free Stock Analysis Report

Columbia Sportswear Company (COLM): Free Stock Analysis Report

PVH Corp. (PVH): Free Stock Analysis Report

Ralph Lauren Corporation (RL): Free Stock Analysis Report

Original post

Zacks Investment Research
PVH Corp (PVH) Moves Up The Charts: Will Growth Continue?

Related Articles

PVH Corp (PVH) Moves Up The Charts: Will Growth Continue?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email